Average revenue per user, or ARPU, is the revenue a business earned over a stated period divided by the average number of users or subscribers it served over that same period. It is an operating metric each company defines for itself rather than an accounting figure any standard sets, so the period and the definition of a user both have to travel with the number.
The Average Revenue Per User Formula
Both inputs cover the same window.
ARPU = revenue for a period / average number of users in that periodThe numerator is the revenue recognized in that period, so the gross against net question sits upstream of the metric, in gross revenue, and the separate question of revenue against income is settled in income vs revenue.
The denominator is a count of users, and it has to cover the same window as the numerator. Dividing a full period’s revenue by a headcount read on one date misstates any business whose user base moved while that revenue was earned, so the count that matches the window is the average of the count at the start of the period and the count at the end.
No Standard Sets It, the Company Does
The SEC lists average revenue per user among the metrics its guidance on metrics disclosed in management’s discussion and analysis is intended to apply to, alongside same store sales, total customers and subscribers, and daily or monthly active users (SEC, Commission Guidance on Management’s Discussion and Analysis of Financial Condition and Results of Operations, Release No. 33-10751, n.11). It appears, where it appears at all, in that section of a filing (17 CFR 229.303), because no line of the financial statements carries it.
The non-GAAP rules do not reach it either. Revenue over a user count is a measure calculated under generally accepted accounting principles (GAAP) divided by an operating one, which puts it outside the definition of a non-GAAP financial measure (SEC Regulation G, section 244.101(a)(2), 17 CFR 229.10(e)(4)), so none of the reconciliation owed by a measure like EBITDA is owed here. Days sales outstanding lands outside the same definition on the other combination, a ratio built only out of GAAP figures.
Who Counts as a User Is the Company’s Call
Because nothing external fixes the denominator, two businesses can publish the same metric and be counting different populations. Meta reports average revenue per person rather than average revenue per user, defined as Family of Apps revenue for a given quarter divided by the average of the number of daily active people at the beginning and end of that quarter, where a daily active person is a registered and logged-in user of Facebook, Instagram, Messenger and/or WhatsApp who visited at least one of those products on a given day (Meta Platforms, Inc., Form 10-K for fiscal 2025).
Meta updated that definition in the first quarter of 2024 and recast the earlier periods to keep them comparable (Meta’s fiscal 2025 Form 10-K). Without the recast, the trend line would have moved on a definition change rather than on anything a customer did.
A Worked Example
Say a subscription business reports the figures below for one quarter.
Revenue for the quarter $2,400,000
Users at the start of the quarter 190,000
Users at the end of the quarter 210,000
Average of the two counts 200,000
ARPU on the average count $12.00
ARPU on the ending count $11.43The two counts do not give the same answer, so the figure is only readable next to a statement of which one produced it. Where a user base shrank rather than grew, the two answers would swap places.
Where It Touches a Firm’s Work
For a firm whose client reports the metric, the engagement sits on the numerator. Revenue recognition follows Topic 606, Revenue from Contracts with Customers (FASB Accounting Standards Update No. 2014-09), so a change in the client’s recognition policy, or in the timing that policy produces, moves the metric with nothing having changed in what any customer did.
What ARPU Is Not
ARPPU, average revenue per paying user, keeps the same numerator and narrows the denominator to the users who actually paid, so wherever a free tier exists, ARPPU is the larger of the two. ARPA, average revenue per account, and its per-customer variant count contracts rather than people, so an account carrying several seats pulls ARPA above ARPU on identical revenue.
Common Questions
Meta, which owns Facebook, publishes no figure under that name. Its annual worldwide average revenue per person for 2025, the sum of the four quarterly figures, was $57.03, an increase of 15% from 2024 (Meta Platforms, Inc., Form 10-K for fiscal 2025).
ARPU measures one closed period. Lifetime value, or LTV, projects the whole customer relationship, so it rests on how long a customer is expected to stay and what they spend over that time. One counts a window that has ended and the other estimates one that has not, so they are not interchangeable.
Revenue per employee divides revenue by headcount rather than by users, so ARPU says nothing about it and no single threshold settles it. Inside a US CPA firm the comparable per-head measure is net client fees per full-time professional, whose fiscal 2024 median sits in the firm KPI benchmarks.
