ARPU & ARPPU
Average revenue per user — across everyone, and across the ones who actually pay.
Your numbers
Results
How it works
ARPU = monthly revenue ÷ all active users. ARPPU = monthly revenue ÷ paying users.
ARPU tells you what an average user is worth, free riders included — it's the number that feeds LTV and tells you what you can afford to spend acquiring a user. ARPPU tells you what a customer is worth, which is the number that should anchor pricing decisions.
The classic mistake in freemium is mixing them up: computing "LTV" from ARPPU while your CAC buys mostly free users. If 20% of users pay, a $100 ARPPU is only a $20 ARPU — and $20, not $100, is what each acquired user is actually worth on average.
Worked example
You make $50,000/month from 2,500 active users, 500 of whom pay. ARPU = $50,000 ÷ 2,500 = $20; ARPPU = $50,000 ÷ 500 = $100; paying share = 20%. Budget acquisition against the $20, price the product against the $100.