How to calculate ARPU and ARPPU?

ARPU (Average Revenue Per User) and ARPPU (Average Revenue Per Paying User) are key metrics for evaluating product monetization.

• ARPU is calculated as the total revenue received from all users divided by the total number of users over a specific period:

  [ ARPU = \frac{Total\ Revenue}{Total\ Users} ]

• ARPPU is calculated as the total revenue received only from paying users divided by the number of paying users over the same period:

  [ ARPPU = \frac{Total\ Revenue\ from\ Paying\ Users}{Number\ of\ Paying\ Users} ]

For example, if in a month you have 1000 users, of whom 100 pay, and the total revenue is $5000, then:

• ARPU = 5000 / 1000 = $5
• ARPPU = 5000 / 100 = $50

These metrics help understand how effectively the product is monetized and what the average value per user and paying user is.