What is the difference between ARPPU and ARPU?

ARPPU divides revenue by paying users only; ARPU divides it by all users including free ones. In freemium models ARPPU is the cleaner monetisation signal.

Why does ARPPU matter in freemium?

Because a growing free tier deflates ARPU without anything changing for customers. ARPPU removes that dilution and shows what real payers are worth.

How do you increase ARPPU?

Through upsell, higher-tier mix, add-ons, and pricing — while protecting the conversion-to-paid and retention that sustain the paying base.

Growth Marketing Glossary

ARPPU

ARPPUnoun

ARPU with the freeloaders removed — what your actual customers are worth.

Schematic — ARPPU

Full name: Average Revenue Per Paying User
Denominator: paying users only
Versus ARPU: excludes free users
Rises with: upsell, pricing, mix

Forms & parts of speech

ARPPU · noun

Revenue ÷ number of paying users.

"Free users dragged ARPU down, but ARPPU held — our payers still spend well."

What ARPPU isolates

ARPPU divides revenue by paying users only. ARPU divides the same revenue by all users, free included. In a freemium product the two can tell very different stories.

When a big free tier grows, ARPU falls even if nothing changed for customers. ARPPU strips out that dilution and shows what an actual paying customer is worth — the cleaner signal for pricing and monetisation.

What moves it

ARPPU rises with successful upsell, higher-tier mix, add-ons, and price increases. It falls when discounting deepens or the paying base shifts toward cheaper plans.

Because it ignores free users, ARPPU is a monetisation metric, not an acquisition one. Pair it with conversion-to-paid and retention to see the whole picture — a high ARPPU on a shrinking payer base is not a win.

Worked example. Suppose a product has 1,000,000 users, 50,000 of them paying, and $2,500,000 of monthly revenue. ARPU is 2,500,000 ÷ 1,000,000 = $2.50; ARPPU is 2,500,000 ÷ 50,000 = $50.

Launching a higher tier lifts ARPPU to $58 as power users upgrade — even though ARPU barely moves because the free base keeps growing. ARPPU caught the monetisation win that ARPU's denominator hid.

Failure modes to watch. Quoting ARPU and ARPPU interchangeably; celebrating a rising ARPPU that comes only from churning out cheaper customers; and optimising ARPPU at the expense of the free-to-paid conversion that feeds it.

Formula

ARPPU = Revenue ÷ Paying usersARPU uses all users; ARPPU uses payers only

Benchmarks

ARPPU levels are model- and price-specific, so cross-company comparison is weak. Track your own ARPPU trend alongside payer growth and retention.

Higher than ARPU

always, by definition

Rises with

upsell and tier mix

Pair with

conversion-to-paid

Ranges are illustrative; every published figure is cited from a named public source or labelled “RGM analysis.”

Synonyms & antonyms

Synonyms

average revenue per paying user

Antonyms

ARPU

Usage trends

Search interest for this term over the last five years:

View interest-over-time on Google Trends →

Common questions

What is the difference between ARPPU and ARPU?: ARPPU divides revenue by paying users only; ARPU divides it by all users including free ones. In freemium models ARPPU is the cleaner monetisation signal.
Why does ARPPU matter in freemium?: Because a growing free tier deflates ARPU without anything changing for customers. ARPPU removes that dilution and shows what real payers are worth.
How do you increase ARPPU?: Through upsell, higher-tier mix, add-ons, and pricing — while protecting the conversion-to-paid and retention that sustain the paying base.

Related tools & calculators

Resources & people to follow

referenceRevenueCat — subscription app benchmarks
referenceChartMogul — SaaS metrics resources

Curated, non-competitor resources verified per term.

Sources

trendsGoogle Trends — "arppu"