All termsMETRICS & KPIS

ARPU

Average Revenue Per User

Also known as: Average Revenue Per User · ARPA

DEFINITION

The average monthly revenue a SaaS earns per active customer.

In depth

ARPU tells you how much value each customer represents on average. It's most useful when segmented — blended ARPU across self-serve and enterprise hides the reality.

Rising ARPU usually means you're either moving upmarket, adding usage-based components, or expanding successfully. Flat ARPU with growing customer count is healthy self-serve growth; falling ARPU might signal a pricing mistake or discount creep.

Formula & example

ARPU = MRR ÷ active customers
EXAMPLE$50,000 MRR ÷ 400 customers = $125 ARPU.

Rules of thumb

  • Segment ARPU by plan tier, segment, and acquisition channel.
  • Self-serve SaaS ARPU: $20–$200/mo. Mid-market: $500–$2,000. Enterprise: $5,000+.
  • Rising ARPU + flat CAC = compounding unit economics.

Put it into practice

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Related terms

MRR
The predictable revenue a SaaS earns every month from active subscriptions, normalised to a monthly figure.
LTV
The total revenue a single customer generates across their entire relationship with your SaaS.
Expansion Revenue
Additional revenue from existing customers through upgrades, add-ons, seat growth, or usage.

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Last reviewed 14 April 2026 by Abhi Verma.