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ARPA or ARPU: Average Revenue Per Account or Unit

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ARPA or ARPU: Average Revenue Per Account or Unit

Average Revenue per Account (sometimes known as Average Revenue per User or per Unit), usually abbreviated to ARPA, is a measure of the average revenue generated per account, typically per year or month. You could also say that it represents the Average Revenue per Customer, but remeber that a customer may have more than one account depending on your product/services characteristics.

Average revenue per account allows for the analysis of a company's revenue generation and growth at the per-unit level, which can help investors to identify which products are high or low revenue-generators.

How to calculate ARPA?

To calculate the ARPA, a standard time period must be defined. Most subscription business operate monthly but you can always calculate it yearly or quarterly according to your plans and billing options. The total revenue generated by all customers (paying subscribers) during that period should be divided by the number total number of customers.

ARPA = MRR / Total # of Customers

 

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