Definition
What is ARPU (Average Revenue Per User)?
Average revenue generated per user or account in a period, usually monthly.
ARPU is total recurring revenue divided by active users or accounts. It is the pricing-side lever of SaaS growth: MRR grows by adding users, raising ARPU, or reducing churn. ARPU expansion through upsells and plan upgrades is usually cheaper than equivalent new-customer acquisition, which is why net revenue retention has become the headline efficiency metric.
Formula
ARPU = Total Revenue in Period ÷ Active Users in PeriodExample
$48,000 MRR across 600 active accounts = $80 ARPU. Moving 10% of accounts to a $120 tier raises ARPU to $84 without new acquisition.