ARPU

ARPU is the average revenue generated per user over a given period, typically monthly.

ARPU is a blended average, and blended averages hide distribution. A subscription app with a small cohort of power users spending heavily and a large cohort of free/low-spend users can show a healthy ARPU while most users generate almost nothing — the mean is doing a lot of covering up. ARPPU (average revenue per *paying* user) is the sharper cut when a large share of the user base doesn't pay at all.

ARPU is a core input to the standard LTV formula — a 10% ARPU increase compounds into a proportionally larger LTV increase, which is why pricing and monetization work often has better unit-economics leverage than acquisition-side optimization.