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Average Revenue per User

>>>>>>>>>>>>>>>>>>>>>>>>>>Companies must regularly review the profitability of their actions in order to be able to take countermeasures in good time if necessary. One important key figure for profitability is Average Revenue per User.

What does Average Revenue per User mean?

Average Revenue Per User, abbreviated to ARPU, is a business ratio that translates as“average revenue per user“. This ratio indicates the average value of a customer for a company. The ARPU metric is mostly used by companies in the mobile industry, pay-TV and streaming services. In order to obtain comparable values, the average revenue per user is determined for a defined period, e.g. one month or one year. The value is a measure of the profitability of a company.

Calculation of the ARPU

Before the ARPU can be calculated, the period for the calculation must first be defined. Usually, the calculation is done for a month or a quarter. The value is determined by dividing the total revenue of the company in the specified period by the total number of customers in this period.

The formula is:

Total revenue / Total number of customers = ARPU

The calculation usually only takes into account those customers who regularly use the company’s services or who make use of the services in the form of a subscription in the case of streaming services, for example.

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