What is ARPU (Average Revenue Per User)?

ARPU meaning: the average revenue each active user generates over a given period (day, month, or year). If you’re asking what is ARPU in the app industry, it’s total revenue from IAPs, subscriptions, and ads divided by the number of active users for that same period.

And what does ARPU stand for? Average Revenue Per User — revenue divided by active users for the same window. Authoritative frameworks like Firebase and AppsFlyer use this exact definition, and Firebase explicitly folds ad revenue into ARPU and LTV so you see the whole picture, not just IAPs.

How it works

Great teams treat ARPU as a cohort story, not a vanity average. Slice by source (organic vs. paid), country, platform, and paywalls to see who’s actually generating value. In practice, monthly ARPU blends subscriptions, IAPs, and ad revenue; ARPPU (for payers only) separates willingness to pay from overall reach.

Pair ARPU with retention curves: the same $3 ARPU can mean very different businesses if one cohort decays in 14 days and another sticks for 6 months.

Most analytics stacks (Firebase/GA4, Play Console, revenue SDKs) let you attribute revenue to campaigns and listing variants so you can see which creatives, keywords, or markets expand ARPU instead of just installs.

Why it’s important

ARPU sits at the center of app economics because the pie keeps growing — global consumer spend in mobile apps hit ~$150B in 2024, up ~13% YoY, and time spent reached the trillions of hours mark. When the market is that large, a small ARPU lift compounds across millions of users. Industry guides also stress how ARPU works best paired with LTV and churn — optimize the trio and you unlock efficient growth instead of chasing installs.

Example

A language-learning app tracks two paid cohorts from Apple Search Ads: “grammar” and “pronunciation.” Both deliver similar CPIs, but their revenue journeys diverge. The team introduces an annual plan and aligns the first two screenshots to the cohort’s intent (“Master tricky grammar in 10 minutes a day”).

In the next 30 days, monthly ARPU nudges from $3.20 → $4.10 while retention for the “grammar” cohort improves 4 points.

In AppFollow, they confirm sentiment shifts (“clear value,” fewer “too pushy” tags), match the timeline to Rating Analysis, and export a before/after snapshot to finance to validate against billing.

The lesson: ARPU grows when fit improves, not just when spend increases.