What is ARPU and why does it matter for SaaS?

ARPU (Average Revenue Per User) measures the average revenue generated per customer over a specific period. For SaaS businesses, ARPU is critical because it directly impacts your LTV, determines pricing power, and indicates whether you're moving upmarket or downmarket. A rising ARPU typically signals healthy expansion revenue and successful upselling.

How do you calculate ARPU?

The ARPU formula is: ARPU = Total Revenue ÷ Total Number of Users. For monthly ARPU, divide your MRR by active paying customers. For annual ARPU, divide ARR by total customers. Pro tip: Calculate ARPU separately for different segments (new customers, existing customers, enterprise vs SMB) to uncover actionable insights.

What's a good ARPU for SaaS companies?

Good ARPU varies dramatically by market segment. SMB-focused SaaS typically sees $50-200/month ARPU, mid-market ranges $500-2,000/month, and enterprise SaaS often exceeds $5,000/month. More important than absolute ARPU is your ARPU trend - healthy SaaS companies grow ARPU 10-20% annually through pricing optimization and expansion revenue.

What's the difference between ARPU and ARPPU?

ARPU includes all users (including free users) in the denominator, while ARPPU (Average Revenue Per Paying User) only counts paying customers. For freemium businesses, both metrics matter: ARPU shows overall monetization efficiency, while ARPPU indicates the value extracted from converted users.

How can I increase my ARPU?

The most effective ARPU growth strategies include: 1) Implementing value-based pricing tiers, 2) Adding usage-based pricing components, 3) Launching premium add-ons and features, 4) Focusing on expansion revenue from existing customers, 5) Moving upmarket to higher-value customer segments, and 6) Reducing discounting. Our AI analyst can provide personalized recommendations based on your specific metrics.

Should I calculate ARPU monthly or annually?

Calculate both. Monthly ARPU (using MRR) helps track short-term trends and the impact of recent changes. Annual ARPU (using ARR) smooths out seasonality and is better for strategic planning and investor reporting. Most SaaS companies report both metrics.

ARPU Calculator

Calculate your Average Revenue Per User instantly. Compare against industry benchmarks by stage and segment. Get AI-powered tips to increase ARPU.

Enter Your Values

Total Revenue*

Enter your MRR for monthly ARPU or ARR for annual ARPU

Total Paying Customers*

customers

Number of active paying customers in the same period

Previous Period ARPU

Enter last period's ARPU to see growth rate

Formula

ARPU = Total Revenue / Total Paying Customers

ARPU represents the average revenue contribution per customer. Higher ARPU indicates stronger pricing power and customer value delivery. Track ARPU over time to measure the effectiveness of pricing changes, upselling efforts, and market positioning.

Average Revenue Per User (ARPU)$100

$100 ARPU — SMB pricing, focus on volume or expansion revenue.

Total Revenue$50,000

Total Customers500

ARPU Growth Rate+11.1%

Annualized ARPU$1,200

Implied LTV (24mo)$2,400

Revenue at Risk (-10%)$5,000

Gap to Mid-Market ($500)+$400 needed

ARPU Benchmarks by Market Segment

Enterprise$5,000+/month — Enterprise-grade pricing

> $5,000

Mid-Market$500-5,000/month — Mid-market positioning

$500 – $5,000

SMB Growth$100-500/month — Healthy SMB ARPU

$100 – $500

SMB Seed$25-100/month — Early-stage SMB pricing

$25 – $100

PLG/FreemiumUnder $25/month — Volume-dependent model

$0 – $25

Source: OpenView SaaS Benchmarks 2024

How to Calculate ARPU

Enter your total revenue (MRR for monthly ARPU or ARR for annual ARPU)
Enter your total number of paying customers
Optionally add your previous period ARPU to see growth rate
View your ARPU, annualized revenue per user, and implied LTV
Compare against industry benchmarks by market segment
Chat with our AI SaaS Analyst for personalized ARPU optimization strategies

ARPU Benchmarks by Segment

$25-75/month

SMB SaaS (Seed Stage)

$75-200/month

SMB SaaS (Growth Stage)

$500-2,000/month

Mid-Market SaaS

$5,000-25,000/month

Enterprise SaaS

$50-150/month

PLG Companies (Blended)

$200-1,000/month

Vertical SaaS

10-20%

Healthy YoY ARPU Growth

25%+

Top Quartile ARPU Growth