---
title: What is ARPU?
url: https://markin.ai/glossary/arpu
category: Revenue and ARPU metrics
aliases: Average revenue per user
---

# ARPU

> ARPU, average revenue per user, is total revenue in a period divided by the average number of active users in that period. It normalises revenue for base size, which makes it the cleanest way to see whether a business is monetising its customers better or simply acquiring more of them.

## How it is calculated

```
ARPU = Total revenue in period / Average active users in period
```

Use the same period for both terms, and define active once. Mixing monthly revenue with end-of-period users overstates ARPU.

## Why it matters for ARPU

ARPU is the outcome Markin optimises. Every opportunity, hypothesis and experiment is ultimately judged by whether it moved incremental revenue per user.

## Related terms

- [ARPPU](https://markin.ai/glossary/arppu), ARPPU, average revenue per paying user, divides revenue only by users who paid in the period.
- [ARPA](https://markin.ai/glossary/arpa), ARPA, average revenue per account, is revenue divided by the number of accounts rather than individual users.
- [Lifetime value](https://markin.ai/glossary/lifetime-value), Lifetime value is the discounted margin a business expects from a customer over the whole relationship.
- [Monetization rate](https://markin.ai/glossary/monetization-rate), Monetization rate is the share of active customers who pay anything in a period.

## Go deeper

- [ARPU calculation: formula and method](https://markin.ai/blog/what-is-arpu-definition-formula), Step-by-step ARPU calculation, with worked examples by business model.
- [How to increase ARPU](https://markin.ai/blog/how-to-increase-arpu), The levers, ranked.

Source: https://markin.ai/glossary/arpu