Formula
ARPPU = revenue in the period ÷ number of paying users in the period
Use the same period on both sides (usually a month) and decide upfront whether revenue is gross or net of store fees — and stick to it.
Example
In October a language app has 40,000 monthly active users. 800 of them paid — subscriptions and one-off purchases — for a total of $12,000.
- ARPPU = $12,000 ÷ 800 = $15.00
- ARPU = $12,000 ÷ 40,000 = $0.30
- Paying share = 800 ÷ 40,000 = 2%
ARPU = ARPPU × paying share. That relation shows the two levers for revenue: get more users to pay, or get paying users to pay more.
ARPU vs ARPPU
| ARPU | ARPPU | |
|---|---|---|
| Divides by | All active users | Paying users only |
| Shows | Revenue per user overall | Value of a paying customer |
| Moves when | More users pay or pay more | Prices, upsells, plan mix change |
How to raise ARPPU
- Offer an annual plan or a higher tier with clear extra value.
- Use well-timed upsells to users who already pay.
- Test prices per country.
- Reduce involuntary churn (failed payments) among subscribers — see churn rate.
Watch reviews when you change prices: users say very quickly whether they see the new price as fair. Track ARPPU by cohort to see whether newer customers pay more or less than earlier ones, and feed it into lifetime value. The free LTV calculator does the maths.