ARPU vs ARPPU
Two revenue-per-user metrics that differ only in who you divide by, and that can move in opposite directions.
ARPU is revenue divided by all active users; ARPPU is revenue divided only by the users who paid. They are linked by one identity: ARPU equals ARPPU multiplied by the share of users who pay. So ARPU can rise because more users pay, because payers spend more, or both.
What is the difference between ARPU and ARPPU?
ARPU (average revenue per user) spreads revenue across every active user; ARPPU (average revenue per paying user) spreads it only across the users who paid. ARPU answers "what is an average user worth?", while ARPPU answers "what does a paying user spend?".
| ARPU | ARPPU | |
|---|---|---|
| Formula | Revenue ÷ Active users | Revenue ÷ Paying users |
| Divided by | Everyone active (often MAU) | Users with at least one payment |
| Ad revenue | Usually included | Usually left out |
| Moves when | Payer share or spend per payer changes | Spend per payer or plan mix changes |
| Used for | LTV, acquisition maths | Pricing and offer design |
Payer share: paying users divided by active users in the same period. It is the bridge between the two metrics.
How are ARPU and ARPPU connected?
ARPU = ARPPU × payer share. With an ARPPU of $40 and 5% of users paying, ARPU is $2. That identity lets you split any change in ARPU into two causes: more people paying (conversion) or payers paying more (price and plan mix).
The calculator shows both metrics from the same example inputs, plus what ARPU would be if payer share changed and ARPPU stayed the same.
Example inputs: change them to your own numbers. The examples only make the calculator show a worked answer; they are not benchmarks or targets. Runs in your browser; nothing you type is sent anywhere.
- ARPU
- $2
- ARPPU
- $40
- Payer share
- 5%
- ARPU at the what-if payer share (same ARPPU)
- $2.40
Why can they move in opposite directions?
- Price rise: ARPPU goes up, but if fewer users pay, payer share falls and ARPU can drop.
- Discount or cheap entry plan: more users pay, so payer share and ARPU rise, while ARPPU falls because the new payers spend less.
- Light spenders leave: ARPPU rises because the remaining payers spend more on average, even though revenue falls.
This is why neither number should be reported alone. Pair ARPPU with the payer count, and ARPU with the payer share.
Which one to use when
- Acquisition maths: ARPU, or its install-cohort cousin ARPI, because every install costs money whether or not it pays. It feeds directly into LTV and the CPI you can afford.
- Pricing and offers: ARPPU, by plan or offer, because it shows what payers actually spend.
- Freemium health: payer conversion, which explains most ARPU moves in freemium apps.
- Games with ads: ARPDAU, which captures ad revenue from players who never pay.
Common mistakes
- Mixing periods. A monthly ARPU next to a lifetime ARPPU is meaningless; keep revenue, users and period aligned.
- Ad revenue in ARPPU. Non-payers generate ad revenue, so including it in ARPPU overstates what payers spend.
- Gross vs net. Store commission and taxes change both metrics; use net revenue for profit maths. The App Attribution Guide's glossary defines the revenue terms used in attribution reports.
- Different "active" definitions. ARPU on MAU and ARPU on installs can differ by a wide margin. Say which.
For how revenue per user feeds lifetime value, see the glossary entry on lifetime value (LTV).
Measure these by channel
The metrics in this comparison
Questions
Is ARPU or ARPPU higher?
ARPPU is always at least as high as ARPU, because it divides the same revenue by fewer users. They are equal only when every active user pays.
How do you calculate ARPPU from ARPU?
Divide ARPU by the payer share. $2 ARPU with 5% of users paying gives an ARPPU of $40.
Should ARPU include ad revenue?
Yes, if the app earns from ads, because ads earn from all users. Report ad ARPU separately if it helps.
Which matters more for a subscription app?
Both, but most subscription apps watch conversion to paid first, since ARPPU is close to the plan price and changes slowly.
Which currency do the calculators use?
The calculators show US dollars, but every formula works in any currency: enter your own figures in the currency you report in and read the results in that currency.
What is the difference between a metric and a KPI?
A metric is any measured quantity; a KPI is a metric a team has chosen as a target for judging performance. Most metrics here become KPIs only for the teams whose work moves them.
More comparisons
- CPI vs CAC vs CPAThree cost metrics that are often mixed up. Each prices a different step of the funnel, from the install to the paying customer.
- LTV vs ROASLifetime value looks forward at what a user is worth; ROAS looks back at what a campaign has earned so far. Read together, they tell you when spend pays back.
- DAU/MAU vs retention rateTwo engagement measures that sound alike and answer different questions: how often active users come back, and how many new users stay at all.