Average Revenue Per Paying User (ARPPU)

When it comes to generating revenue from mobile apps, tracking how much revenue your paying users contribute to your business is critical to ensuring the growth and survival of your application in the marketplace. To achieve this understanding, many app developers, marketers and other performance teams use a metric called Average Revenue Per Paying User (ARPPU).

ARPPU helps app developers, marketers, and performance teams focus on the users who actually drive revenue, offering clearer insight into spending behavior, monetization efficiency, and overall business health.

Apptrove helps app teams track and analyze ARPPU alongside other essential metrics, enabling smarter decisions around user acquisition, retention, pricing strategies, and revenue optimization.

What is Average Revenue Per Paying User (ARPPU)?

ARPPU, or Average Revenue Per Paying User, measures the average revenue generated from users who make at least one purchase during a specific time period. Unlike ARPU, which includes all users, ARPPU focuses exclusively on paying users, making it especially valuable for apps with freemium, in-app purchase, or subscription-based monetization models.

The formula for ARPPU is simple:

ARPPU = Total Revenue​/ Number of Paying Users

ARPPU provides a snapshot of how well your app converts users into revenue, independent of acquisition costs. It helps businesses understand how much value each user brings to the table.

Why Average Revenue Per Paying User (ARPPU) Matters

Tracking ARPPU is not just about numbers. It’s about understanding the depth of monetization, and making informed strategic decisions. Here’s why ARPPU is important:

1. Measure Monetization Depth
   ARPPU helps assess whether paying users are spending more over time. An increase in ARPPU usually signals stronger pricing, better in-app offerings, or successful upsell strategies.
2. Optimize Revenue from Existing Users
   Acquiring new users is expensive. Improving ARPPU allows teams to grow revenue without increasing acquisition spend, which directly improves profitability.
3. Evaluate Pricing and Offers
   ARPPU reveals whether your pricing tiers, bundles, and subscriptions are aligned with user willingness to pay.
4. Forecast Revenue Growth
   As ARPPU focuses only on revenue-generating users, it offers more stable insights for revenue forecasting compared to ARPU, which can fluctuate with non-paying user growth.

How to Calculate ARPPU

ARPPU can be calculated at different levels, depending on your business model and reporting needs:

1. Monthly ARPPU (MARPPU)

This is especially useful for subscription apps and games with seasonal monetization spikes. Used to analyze spending patterns of paying users over a month, the formula is:
$$$$Monthly ARPPU (MARPPU) = Monthly Revenue / Paying Users in that Month

2. Daily ARPPU (DARPPU)

Daily ARPPU helps optimize limited-time offers, live events, and in-game promotions. Ideal for high-transaction apps like mobile games, the formula to calculate is:

Daily ARPPU = Daily Active Users / Daily Revenue​

3. ARPPU by Segment

Segmenting ARPPU by geography, device, cohort, or user behavior highlights where your highest-value users come from.

For example:

• Paying users in the US may have a monthly ARPPU of $45
• Paying users in India may have a monthly ARPPU of $18

These insights help tailor monetization strategies and localized pricing.

ARPPU vs ARPU: What’s the Difference?

ARPU includes all users, whether they pay or not, whereas ARPPU includes only users who generate revenue. While ARPU is useful for understanding overall monetization efficiency, ARPPU is critical for understanding how well your app monetizes its paying audience. Most mature app businesses track both, using ARPU for acquisition decisions and ARPPU for revenue optimization.

How ARPPU Helps App Monetization

ARPPU is a powerful lever for increasing revenue without scaling user acquisition. Here’s how app marketers can use ARPPU effectively:

1. Refine Pricing and Bundles
   Tracking ARPPU across pricing tiers helps identify which plans or bundles deliver the highest revenue per paying user.
2. Improve Upsell and Cross-sell
   Higher ARPPU often comes from successful upsells, premium features, and add-ons that enhance user experience.
3. Identify Whale and Mid-Spender Behavior
   ARPPU analysis highlights whether revenue is driven by a small group of high spenders or a broader base of moderate spenders.
4. Optimize In-App Campaigns
   Promotions, discounts, and time-bound offers can be evaluated based on their impact on ARPPU, not just conversion rates.

Summing Up

Average Revenue Per Paying User (ARPPU) offers a focused lens into how effectively your app monetizes users who are already willing to pay. It highlights pricing strength, upsell success, and revenue potential without being distorted by non-paying users.

For app marketers and owners, tracking and optimizing ARPPU is essential to improving profitability, refining monetization strategies, and building sustainable growth. When combined with ARPU, LTV, and retention metrics, ARPPU becomes a powerful indicator of long-term app success.

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