Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) is a financial metric used to measure the revenue generated per user or unit over a specific time period, often monthly or annually. It is commonly used by companies in the telecommunications, software, and subscription-based industries to assess the effectiveness of their revenue-generating strategies.

ARPU is calculated by dividing the total revenue by the number of users. The formula is as follows:

ARPU = Total Revenue / Total Users

For example, if a subscription-based streaming service earns $1,000,000 in a month and has 100,000 active subscribers, the ARPU would be:

ARPU = $1,000,000 / 100,000 = $10

This means the service earns an average of $10 per subscriber each month.

In a case where a mobile network operator generates $50,000,000 in revenue from 5,000,000 subscribers, the ARPU calculation would be:

ARPU = $50,000,000 / 5,000,000 = $10

In this scenario, the operator also earns an average of $10 per user, indicating a consistent revenue generation strategy.