ARPU Calculator
Average Revenue Per User (ARPU) measures the average monthly revenue generated per customer. ARPU is a key indicator of monetization efficiency and pricing power. Tracking ARPU over time reveals whether you are successfully moving upmarket or experiencing pricing pressure.
How to Calculate
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ARPU = Total MRR / Number of Paying Customers
Variations:
ARPA (per account): For B2B with multiple users- New ARPU: Revenue from new customers only
- Expansion ARPU: Additional revenue from existing
Industry Benchmarks
| Segment | Typical ARPU | Notes |
|---|---|---|
| Consumer | $5-15 | High volume, low touch |
| SMB | $50-200 | Self-serve or low touch |
| Mid-Market | $500-2,000 | Inside sales |
| Enterprise | $5,000+ | Field sales, high touch |
Interpreting Your Results
Rising ARPU indicates successful upselling or moving upmarket. Falling ARPU may signal pricing pressure or shift to smaller customers. Segment ARPU by cohort and acquisition channel for insights.
Why This Metric Matters
Understanding ARPU helps you:
- Make data-driven business decisions with confidence
- Benchmark against industry standards and competitors
- Identify areas for improvement in your business model
- Communicate performance clearly to stakeholders and investors
- Set realistic goals and track progress over time
Best Practices for Accurate Measurement
1. Use consistent time periods: Compare month-over-month or quarter-over-quarter consistently 2. Include all relevant data: Ensure you capture all revenue sources and costs 3. Track cohorts separately: Analyze metrics by customer segment and acquisition date 4. Monitor trends: Single snapshots are less valuable than trends over time 5. Automate tracking: Use analytics tools to ensure consistent, accurate measurement
Every Metric From These Inputs
100 customers at $49 with 3% monthly churn and $200 CAC:
| Metric | Value | Formula |
|---|---|---|
| MRR | $4,900 | customers × ARPU |
| ARR | $58,800 | MRR × 12 |
| Annual churn | 30.6% | 1 − (1 − monthly)¹² |
| Average lifetime | 33.3 months | 1 ÷ monthly churn |
| LTV | $1,633 | ARPU ÷ monthly churn |
| LTV : CAC | 8.2:1 | LTV ÷ CAC |
| CAC payback | 4.1 months | CAC ÷ ARPU |
What Good Looks Like
| Metric | Healthy | Concerning |
|---|---|---|
| Monthly churn (SMB) | Under 3% | Above 5% |
| Monthly churn (enterprise) | Under 1% | Above 2% |
| LTV : CAC | 3:1 or better | Below 1:1 |
| CAC payback | Under 12 months | Above 18 |
| Net revenue retention | Above 100% | Below 90% |
The Metric This Set Omits
Net revenue retention — expansion revenue minus churn and contraction, from existing customers only. Above 100% means the business grows without acquiring anyone, which is the single strongest signal in SaaS and the one that most affects valuation. It cannot be derived from the inputs above because it needs upgrade and downgrade data.