What is ARPU?

The short definition and formula

ARPU = MRR / paying customers

$4,800 MRR from 160 paying customers is an ARPU of $30. Stripe's Billing analytics defines it the same way: total MRR divided by active subscribers, counting a customer with several subscriptions once.

Whether "users" means everyone or only payers depends on who you ask. Consumer apps often divide by all users, including free ones. For a subscription product, divide by paying customers, and say so.

ARPU, ARPA and ARPPU

• ARPU: per user. In SaaS usually per paying customer.
• ARPA: per account. Used when one account has many seats, so a team of ten counts once.
• ARPPU: per paying user, the explicit version for apps with many free users.

They are the same idea with a different denominator. Pick the one that matches how you charge.

Why it matters

ARPU is the lever most makers underuse. Growing from 100 to 200 customers takes a lot of marketing. Growing ARPU from $15 to $30 with a better plan structure, yearly plans or a higher tier can take an afternoon and some nerve.

It also feeds the other numbers. LTV is ARPU times margin divided by churn, so a higher ARPU raises lifetime value directly. The MRR calculator shows revenue per customer for your mix of plans.

Watch the trend

A falling ARPU while customer count grows usually means discounts, a cheap plan taking over, or bigger customers leaving. A rising one usually means upgrades or a price change sticking. Look at it monthly next to MRR and churn. SaaS metrics for indie hackers puts them all together.