What Are ARPU and ARPPU?
ARPU (Average Revenue Per User) measures the average revenue generated per user across your entire user base, including non-payers. ARPPU (Average Revenue Per Paying User) measures the average revenue only among users who have made at least one purchase.
ARPU = Total Revenue / Total Active Users
ARPPU = Total Revenue / Total Paying Users
The gap between these two numbers reveals your monetization efficiency. If ARPU is $0.50 and ARPPU is $25, your conversion rate to paying is roughly 2%.
Why Both Metrics Matter
ARPU answers: "How well does the entire product monetize?" It is the metric you compare against CAC to determine unit economics.
ARPPU answers: "How much do paying users actually spend?" It tells you whether your pricing is working.
Tracking both reveals different optimization paths:
- Low ARPU, high ARPPU = Conversion problem. Focus on paywall optimization
- High ARPU, low ARPPU = Good conversion but low spend. Consider upselling or higher tiers
- Low ARPU, low ARPPU = Both conversion and pricing need work
ARPU Benchmarks by Category (2026)
| App Category | Monthly ARPU | Monthly ARPPU |
|---|---|---|
| Casual gaming | $0.15-0.50 | $15-40 |
| Social media | $2-6 (ad-based) | N/A |
| Streaming | $4-10 | $8-15 |
| Health/Fitness | $1-4 | $12-25 |
| Productivity | $2-8 | $8-20 |
| Dating | $2-6 | $20-40 |
| Fintech | $3-10 | $15-35 |
| E-commerce | $1-5 | $5-15 |
These ranges vary significantly by market. US ARPU tends to be 3-5x higher than Southeast Asian markets.
ARPU by Monetization Model
Subscription Apps
Highest and most predictable ARPU. Monthly ARPU approximates the price multiplied by conversion rate. A $9.99/month app with 8% conversion has ARPU of roughly $0.80.
IAP Apps
Low ARPU but very high ARPPU. The "whale" dynamic is real: 1-2% of users generate 50-80% of revenue.
Ad-Supported Apps
Depends on impressions, fill rate, and eCPM. Typically $0.01-0.05 per DAU per day.
Hybrid Models
Combining subscriptions with ads or IAP often produces the highest overall ARPU. Many successful apps in 2026 use this approach.
Calculating ARPU Correctly
Time Period Consistency
Monthly ARPU is most common for subscription apps. Daily ARPU (ARPDAU) is common in gaming.
New vs Existing Users
New users almost always have lower ARPU. Mixing them with established paying users dilutes the metric.
Geographic Segmentation
ARPU varies dramatically by country. Report by market or at least by tier.
Increasing ARPU
Convert More Free Users
- Optimize paywall placement and messaging
- Offer limited-time trials that demonstrate premium value
- Use behavioral triggers to show the paywall at the right moment
Increase ARPPU
- Introduce higher-priced tiers with added value
- Offer annual plans at a discount
- Add consumable purchases alongside subscriptions
Reduce Churn Among Payers
Every paying user who churns directly reduces ARPU. Keeping subscribers is often more impactful than converting new ones.
ARPU in Unit Economics
LTV = ARPU x Average Lifespan
If monthly ARPU is $2 and average lifespan is 8 months, LTV is $16. If CAC is $10, the business works. If CAC is $20, you need to increase ARPU or reduce CAC.