ARPU / ARPA

The average recurring revenue you earn from each user — or, in B2B, from each account. A simple gauge of how much every customer is worth on average.

In plain English

ARPU and ARPA answer one question: on average, how much does a single customer pay you? Take all your recurring revenue and split it evenly across everyone paying. ARPU divides by users — individual people or seats — while ARPA divides by accounts, meaning whole companies. In consumer apps the two are often the same; in B2B SaaS, where one account can hold dozens of seats, ARPA is usually the figure people mean. On its own a single number tells you little, but watched over time it reveals whether you're moving upmarket, your pricing is sticking, and your existing customers are growing.

The formula

ARPU = total recurring revenue ÷ number of users
ARPA = total recurring revenue ÷ number of accounts

Use the same period for both halves — monthly revenue against the active customer count for that month — so the average reflects a like-for-like slice of the business.

A worked example

Suppose your monthly recurring revenue is €48,000, spread across 400 accounts.

ARPA = €48,000 ÷ 400 accounts = €120 per account / month

If a pricing change and a round of upsells lift MRR to €60,000 across the same 400 accounts next quarter, ARPA climbs to €150 — a 25% gain in average value without winning a single new logo.

What's a good ARPU?

There's no universal target — a self-serve tool at €20/month and an enterprise platform at €5,000/month can both be excellent businesses. Judge ARPU by its direction, not its level:

ARPU trend	Verdict	What it signals
Rising quarter on quarter	Healthy	Upsell, pricing power, upmarket mix
Flat	Watch	Growth is coming only from new logos
Falling	Warning sign	Discounting or downmarket drift

A rising ARPU is the goal: it means each customer is worth more over time, which lifts lifetime value and gives you more room to spend on acquisition.

Frequently asked questions

What is the difference between ARPU and ARPA?

ARPU divides recurring revenue by the number of users (individual people or seats), while ARPA divides it by the number of accounts (companies or organisations). In B2B SaaS where one account has many seats, ARPA is usually the more meaningful number; consumer apps tend to track ARPU.

What is a good ARPU?

There is no universal target — ARPU varies enormously by market and price point. What matters is the trend: a rising ARPU means you are landing better-fit customers, raising prices, or expanding existing accounts, all of which improve unit economics. A flat or falling ARPU is the signal to investigate.

How do you increase ARPU?

Raise prices, move customers to higher tiers, add usage-based or seat-based expansion, cross-sell additional products, and acquire higher-value customers in the first place. Targeting acquisition spend at high-value segments lifts ARPU before any upsell happens.

MRR · Expansion revenue · ACV · Customer lifetime value (LTV)

Learn more

The complete guide to value-based bidding · Value-based bidding without a data team