Formula
ARPU = revenue in the period ÷ active users in the period
Include all revenue sources you care about: in-app purchases, subscriptions and ads. Use the same user definition (e.g. MAU) consistently.
ARPU vs. ARPPU
- ARPU divides by all active users, including those who never pay.
- ARPPU (average revenue per paying user) divides only by paying users.
Freemium apps usually have a low ARPU and a much higher ARPPU.
Why it matters
ARPU tells you how well an app monetizes its audience. Combined with retention it estimates lifetime value (LTV), which in turn tells you how much you can spend per install — your maximum CPI.
Example
A puzzle game earns $90,000 in a month from ads and purchases and has 300,000 monthly active users: ARPU is $0.30. Only 2% pay, so ARPPU is $15.