ARPPU(Average Revenue Per Paying User)
Total revenue for a period divided only by the users who made a payment in that period.
Definition
ARPPU (average revenue per paying user) measures how much the average paying customer spends over a period. Unlike ARPU, it ignores free users and divides revenue only by users who paid at least once in the period. Games and freemium apps use it to understand the spending of their payers, and subscription apps use it to see the effect of plan mix, such as monthly versus annual plans or upsells to higher tiers.
Why It Matters
ARPPU isolates the "how much" side of monetization from the "how many" side. If ARPU falls, ARPPU tells you whether payers are spending less or whether fewer users are paying. Games use it to understand whether a few big spenders drive revenue, and subscription apps use it to judge whether discounts and intro offers are lowering the value of each payer. On its own, though, ARPPU can mislead: raising prices may increase ARPPU while fewer people pay.
How It Works
Count users who made at least one payment in the period, then divide total revenue by that number. Use the same revenue definition (gross or net of store fees and refunds) as your ARPU. The relationship is ARPU = ARPPU multiplied by payer conversion rate. Segment ARPPU by product type, plan, country and cohort, because a handful of high spenders can swing the average; median spend per payer is a useful companion number.
Example
A meditation app compares two months:
- May: $120,000 revenue, 10,000 paying users, ARPPU $12.00
- June: $126,000 revenue, 12,000 paying users, ARPPU $10.50
Revenue grew, but ARPPU fell, because a discounted intro offer brought in many new monthly subscribers. The team tracks whether those subscribers renew at full price before judging the offer.
Best Practices
- 1Always report ARPPU together with payer conversion and ARPU
- 2Use the same revenue definition across all three metrics
- 3Look at the median spend per payer, not just the average
- 4Segment by plan type, since annual plans inflate ARPPU in the month they are bought
- 5Check ARPPU after discounts and intro offers end, not only during them
Moving ARPU: Conversion vs Spend
| Lever | Changes | Example |
|---|---|---|
| More users pay | Payer conversion | Better trial onboarding, paywall tests |
| Payers spend more | ARPPU | Annual plans, higher tiers, add-ons |
| Payers stay longer | Lifetime value | Billing recovery, cancellation saves |