ARPA shows how much a typical customer pays in a period, usually a month. It helps with pricing, forecasting and understanding whether growth comes from more customers or bigger ones.
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Calculating it
Divide monthly recurring revenue by the number of paying accounts at the same point. Keep the definitions of account and revenue consistent over time.
Watch the mix
A rising ARPA can mean successful upselling, or that small customers are leaving. Segment by plan or size to see the real change.
Common mistakes
Comparing across billing periods
Annual and monthly figures must be put on the same basis first.
Frequently Asked Questions
ARPU is per user, and ARPA is per account. For seat-based products they differ.
Keep reading
- Monthly Recurring Revenue: The predictable subscription revenue a SaaS company earns each month, normalized across plans. The main operating metric for self-serve and monthly businesses.
- Annual Recurring Revenue: The yearly value of a SaaS company's active subscription contracts, excluding one-off fees. The headline size metric for most subscription businesses.
- Average Contract Value: The average annual value of a customer contract, excluding one-off fees. It shapes which sales motion and acquisition channels a SaaS company can afford.
- Customer Lifetime Value: An estimate of the gross profit a customer will bring in over their whole relationship with a SaaS company. The ceiling on what you can afford to acquire them.
- Acquisition Channel: A route through which a company finds new customers, such as organic search, paid ads, referrals, partners or outbound sales. Each has its own costs and limits.
- Bottom-of-Funnel Content: Content for buyers who are choosing between products, such as comparisons, alternatives, pricing and integration pages, built to turn searches into customers.
- Buyer Persona: A research-based profile of a person involved in buying your product: their role, goals, problems and how they search for and evaluate solutions.
- Churn Rate: The rate at which a SaaS company loses customers or recurring revenue over a period. Logo churn counts accounts; revenue churn counts dollars.
