Average revenue per user (ARPU) is the revenue your business earns per customer in a given period. You divide total revenue for that period by the number of active customers in it. ARPU is usually reported per month. It shows whether growth comes from more customers, higher prices, or both.
A generated business plan uses ARPU to build the revenue forecast: expected customers multiplied by ARPU gives the revenue line, which is easier to defend than one guessed total.
An example. In June your app earns €48,600 from 1,800 active customers, so ARPU is €27. In July revenue rises to €55,000 from 2,300 customers, so ARPU falls to €23.91. Revenue grew 13 percent, but each customer is worth 11 percent less. Usually that means the new customers chose a cheaper plan or arrived through a discount campaign.
ARPU belongs next to your acquisition cost. If you pay €90 to win a customer at €27 per month and the average customer stays 14 months, that customer brings €378 of revenue. Whether that works depends on your margin, not on the €378 alone.
Two mistakes. First, founders divide by total signups instead of paying, active customers. Thousands of dormant free accounts push ARPU toward zero and make the number useless. Decide what active means, write the definition down, and keep it stable.
Second, they read a rising ARPU as good news without checking why. ARPU also rises when cheap customers cancel and only expensive ones remain. Revenue can be flat or falling while ARPU improves. Read ARPU together with customer count and total revenue.
