ARPU: Average revenue per user.

ARPU answers a simple question: across everyone who used the app this month, paying or not, how much money did each person bring in on average? It is one of the first numbers investors, publishers and ad networks ask for.

The ARPU formula

ARPU = total revenue in a period ÷ active users in the same period

For a monthly figure, use monthly active users (MAU). Revenue usually means ads, in-app purchases and subscriptions together. Say whether you use gross revenue (what players paid) or net revenue (after the store's commission), because the difference can be large.

A worked example

In March, a free-to-play puzzle game has 40,000 monthly active users. It earns $3,000 from ads and $9,000 from in-app purchases, $12,000 in total.

ARPU = $12,000 ÷ 40,000 = $0.30 per user for the month

Only 600 of those players bought anything. Their average spend was $9,000 ÷ 600 = $15. That figure is ARPPU, and it tells a very different story from ARPU. The share of players who paid, 600 ÷ 40,000 = 1.5%, is the payer conversion rate.

The three numbers fit together:

IAP revenue per user = payer conversion × ARPPU = 1.5% × $15 = $0.225 Ad revenue per user = $3,000 ÷ 40,000 = $0.075 ARPU = $0.225 + $0.075 = $0.30

Splitting ARPU this way shows you which lever moved when it changes.

ARPU vs ARPDAU vs ARPPU

Metric	Formula	Best used for
ARPU	Revenue in a period ÷ active users in that period	Comparing months, reporting to partners
ARPDAU	Daily revenue ÷ daily active users	Daily monitoring, testing changes quickly
ARPPU	Revenue in a period ÷ paying users	Understanding how much payers spend
LTV	Revenue per user over their whole lifetime	Deciding how much to spend on acquisition

A common mistake is to multiply a monthly ARPU by an expected number of months and call it LTV. That only works if retention is flat, which it never is. Use cohort-based LTV for spending decisions.

Why the period matters

ARPU depends heavily on the window you choose. A user who plays once in a month counts the same as one who plays every day. If you compare ARPU across games or reports, check that they use the same period, the same user definition (active vs installed) and the same revenue basis (gross vs net).

Some teams also calculate ARPU per install cohort: total revenue from a group of players who installed in the same week, divided by the number of installs. That version is closer to LTV and is the one to compare against your cost per install (eCPI).

What moves ARPU

• Payer conversion. A better starter offer or first-purchase discount turns more players into payers.
• ARPPU. Better-priced bundles, a season pass or a VIP tier raise spend among payers.
• Ad revenue. More rewarded ad opportunities, smarter placements and higher eCPM through mediation.
• Audience mix. Players from high-income countries usually have higher ARPU. A campaign that brings many low-value users lowers ARPU without anything changing in the game.
• Retention. Players who stay longer have more chances to spend and to watch ads within the month.

Limits of ARPU

ARPU is an average, and in games averages hide a lot. A small number of heavy spenders can account for most purchase revenue, so a single large payer leaving can move ARPU noticeably. Always read ARPU next to payer conversion, ARPPU and the split between ad and purchase revenue, and break it down by country and platform.

See our ads and monetization service if you want help raising revenue per user.