ARPPU

Definition

ARPPU is calculated as revenue from the chosen period divided by the number of distinct paying users in that same period. The second “P” matters: free users, trial participants who have not been charged, and other zero-revenue accounts are excluded from the denominator. Teams use the metric to understand the average monetary contribution of customers who converted, without letting a large free audience obscure pricing and purchase behavior.

For example, an app earns $24,000 in net subscription and in-app purchase revenue during June from 1,200 unique payers. Its June ARPPU is $20. If the app had 10,000 total active users, its ARPU would instead be $2.40 because ARPU includes everyone. Neither result is inherently better; they answer different questions. ARPPU describes payer value, while ARPU combines payer value with the proportion of users who pay.

How to measure it well

The numerator and denominator need matching boundaries. Decide whether revenue is gross store proceeds, developer proceeds after store fees and taxes, recognized subscription revenue, or cash collected. Use one currency conversion policy and one timezone. Count a customer once even if that person bought several products, and define identity consistently across devices and stores. Comparing a monthly numerator with daily payers, or counting transactions instead of people, produces a misleading figure.

ARPPU can rise because customers chose higher tiers, bought add-ons, renewed longer plans, or because low-spending payers churned. That last case illustrates why the metric should be read beside conversion rate, payer count, churn, refunds, and lifetime value. Segmenting by platform, acquisition cohort, country, product, and subscription tenure often explains movement more clearly than a single blended average. A trial conversion experiment may lower ARPPU while increasing total revenue if it attracts many new entry-level subscribers.