Skip to content
IndieMakerList

Founder glossary · Pricing & unit economics

What is ARPU? Average revenue per user explained

ARPU is average recurring revenue per paying customer per month: MRR divided by the number of paying customers.

By · Updated

Definition · also called ARPA, ARPC, average revenue per account, average revenue per user

ARPU (average revenue per user) is your MRR divided by the number of paying customers. In B2B SaaS it is often called ARPA (per account), because one account can have many users.

ARPU is one of the two levers on MRR (MRR = customers × ARPU), and one of the strongest predictors of retention: higher-priced products tend to have lower churn and more room for expansion.

ARPU formula

ARPU = MRR ÷ number of paying customers

  • Exclude free users, or report them separately (ARPU across all users is a different, much smaller number).
  • Use monthly values: an annual plan counts at price ÷ 12.

Worked example

$9,000 MRR from 300 paying customers: ARPU = $30.

To reach $10,000 MRR you can add 34 customers at $30, or raise ARPU to $33.34 with the same 300. Raising price is usually the faster of the two, as long as churn doesn't rise with it.

ARPU benchmarks

Price point and retention move together in ChartMogul's data:

BenchmarkValueSource
Top-quartile NRR, ARPA under $10/month65.1%ChartMogul SaaS Retention Report (2023)
Top-quartile NRR, ARPA over $500/month109.3%ChartMogul SaaS Retention Report (2023)
Top-quartile gross retention, ARPA under $50/month60–70%ChartMogul SaaS Retention Report (2023)

ARPU in practice: how indie makers use it

Indie makers who grew by moving ARPU rather than customer count:

  • Brett Williams

    Kept Designjoy a one-person business by raising the monthly fee from a few hundred dollars at launch to $5,000, instead of hiring to serve more clients. (source: highspirit.substack.com)

  • Dominic Monn

    A pricing change lifted MentorCruise from about $600 to $4,200 MRR within months in 2020. (source: starterstory.com)

  • Louis Pereira

    Moved AudioPen from a $19 lifetime deal to $150 lifetime plus a $75 annual plan as demand grew. (source: solveo.co)

  • Jen Yip

    Reached 1,000 paying users and $80K ARR with Lunch Money as a company of one, about $6.70 per user per month: proof a consumer-priced tool can sustain a solo founder, with enough volume. (source: indiehackers.com)

Free calculators

Frequently asked questions

How do you calculate ARPU?

Divide monthly recurring revenue by the number of paying customers. $9,000 MRR from 300 customers is an ARPU of $30.

What is the difference between ARPU and ARPA?

ARPU is per user and ARPA is per account. In B2B SaaS one account may have many users, so ARPA is usually the more meaningful number.

Should free users count in ARPU?

For SaaS metrics, no: calculate ARPU over paying customers. ARPU across all users, free included, is a separate metric common in consumer apps and games.

Keep reading

Maker examples are paraphrased from the cited sources and from each maker's IndieMakerList profile; revenue is self-reported unless marked verified. Spotted an error? Tell us.