ARPU (Average Revenue Per User)

Definition

The average revenue generated per user, typically calculated monthly or annually. The easiest way to understand if your pricing actually matters.

Example Usage

Our ARPU is $150/month, which gives us flexibility to spend up to $600 on CAC and still maintain a healthy LTV:CAC ratio.

Origin

Standard business metrics terminology, popularized in telecom and SaaS

Fun Fact

ARPU growth is often more important than user growth—you want to make more money per person, not just get more people.

Source: Revenue metrics and SaaS terminology

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