ARPU (Average Revenue Per User)
ARPU (Average Revenue Per User), sometimes ARPA (per account), is the average recurring revenue generated by each active customer in a period, calculated as total recurring revenue divided by the number of active customers.
ARPU — Average Revenue Per User — is a quick read on how much each customer is worth per period. It’s the bridge between your subscriber count and your recurring revenue, and a lever you can pull without acquiring anyone new.
The ARPU formula
ARPU averages your recurring revenue across active customers:
- ARPU = Total recurring revenue in a period ÷ Number of active customers
- Monthly example: $30,000 MRR ÷ 1,000 subscribers = $30 ARPU per month.
ARPU vs. LTV
ARPU is a per-period figure (usually monthly); LTV is the total across a customer’s whole lifetime. They’re linked: roughly, LTV = ARPU ÷ churn rate. Raising ARPU raises LTV directly, which is why expansion revenue is so valuable.
How to increase ARPU on Shopify
ARPU rises when customers spend more per cycle:
- Upsells and cross-sells in the cart and customer portal.
- Bundles and Build-a-Box to raise order value.
- Tiered pricing and premium plans.
- Add-ons and higher-frequency subscriptions.
Frequently asked questions
What is ARPU?
ARPU (Average Revenue Per User) is the average recurring revenue each active customer generates in a period. It equals total recurring revenue divided by the number of active customers — for example, $30,000 MRR across 1,000 subscribers is a $30 monthly ARPU.
How do you calculate ARPU?
Divide total recurring revenue for a period (e.g. MRR) by the number of active customers in that period. Use the same time window for both numbers.
What is the difference between ARPU and LTV?
ARPU measures revenue per customer per period (usually a month); LTV measures total revenue per customer across their entire lifetime. Approximately, LTV = ARPU ÷ churn rate.
Launch Shopify subscriptions without RecurX transaction fees
Start free on Shopify, or book a migration audit before changing subscription apps.