ARPU Meaning: Formula, ARPU vs ARPPU and a Dating Example

The ARPU meaning is simple: average revenue per user, or how much revenue the average user brings in over a given period. For dating apps and sites, it is a core monetization metric and one of the most often miscalculated, because reports rarely state which users and which revenue they mean. This guide is for dating brands, advertisers and media buyers. You will learn how ARPU differs from ARPPU, the ARPU formula, how both metrics connect through the payer rate, and how to turn cohort ARPU into a maximum CPL per registration with a worked dating example.

ARPU meaning: what average revenue per user tells you

ARPU stands for average revenue per user. It spreads the revenue of a period across all users, including those who pay nothing. Because only part of a dating product's users pay, ARPU is always lower than revenue per paying user.

Revenue per payer is measured by ARPPU (average revenue per paying user). The two metrics answer different questions:

• ARPU: How well does the product monetize its entire user base?
• ARPPU: How much do the users who decided to buy actually spend?

In dating, revenue mainly means subscriptions and credit packs, plus one-off purchases such as profile boosts, depending on the model. Without a stated period, user base and revenue definition, two ARPU figures cannot be compared.

The ARPU formula: how to calculate ARPU

ARPU = revenue in the period ÷ users in the period

With hypothetical numbers: $190,000 in net revenue in March across 100,000 active users gives an ARPU of $1.90 per user per month.

Three choices decide the result.

Which users? There are three common bases:

• Registered users: every account, including inactive ones. ARPU comes out low and falls with every account that goes dormant.
• Active users: monthly active users (MAU) for monthly ARPU, or daily active users (DAU) for a daily figure, often called ARPDAU. For ongoing steering, this is usually the most meaningful base. Define what counts as active, for example a login during the period.
• A cohort: all users acquired in the same period from the same source. Cohort ARPU is the basis for acquisition decisions.

Which revenue? Gross, net of refunds and chargebacks, or also net of app store fees. Net revenue works better for comparisons and buying decisions. Which deductions you make is a matter of definition, as long as it stays the same in every report.

Which period? Revenue and users must cover the same period. For active users, that is usually a month; for cohorts, it is a window from registration, such as 30, 90 or 180 days.

ARPU vs ARPPU: formula, payer rate and where LTV fits

ARPPU divides the same revenue by paying users only:

ARPPU = revenue in the period ÷ paying users in the period

The payer rate links the two:

ARPU = ARPPU × payer rate

The payer rate is paying users ÷ users, measured on the same user base as ARPU. The equation shows where a change in ARPU comes from: either more users pay, or payers spend more.

For LTV formulas that work per payer, ARPPU is the right input. The subscription formula from our customer lifetime value formula guide is:

LTV per payer = ARPPU × gross margin ÷ churn rate

Churn rate here refers to payers; our churn rate formula guide shows how to measure it. Plug in ARPU instead and you understate a payer's value by the payer rate: at a 5% payer rate, by a factor of 20.

Worked example: ARPU and ARPPU for a dating app

A dating app has 500,000 registered accounts, 100,000 of them active in March. 3,600 users pay for a subscription, 1,900 buy credit packs, and 500 do both, so there are 3,600 + 1,900 − 500 = 5,000 paying users. March revenue (all numbers hypothetical):

• Subscriptions: $140,000 gross
• Credit packs: $60,000 gross
• Refunds and chargebacks: $10,000
• App store fees on the share of payments that runs through the stores: $30,000

That makes $200,000 in gross revenue, $190,000 net of refunds and $160,000 after app store fees. Depending on the definition:

The payer rate is 5,000 ÷ 100,000 = 5% of active users, and the formula checks out: $38.00 × 5% = $1.90. Measured against all registered accounts, only 1% pay, and $38.00 × 1% = $0.38.

The same month produces an ARPU anywhere from $0.38 to $2.00, depending on which users and which revenue you mean. None of these figures is wrong, but only figures with the same definition can be compared. Count the 500 users who bought both products twice, and ARPPU drops to $190,000 ÷ 5,500 ≈ $34.55 instead of $38.00.

From ARPU to maximum CPL: what a registration is worth

Monthly ARPU of $1.90 describes the active base, not the value of a new user. It mixes long-standing subscribers with people who signed up yesterday. For buying decisions, you need cohort ARPU:

Cohort ARPU (day X) = cumulative net revenue of the cohort up to day X ÷ users in the cohort

Accumulated over a window, it equals revenue-based LTV per registration. An example with the same hypothetical numbers as our LTV guide: one source delivers 2,000 DOI in March. By day 180, 100 of them have paid, and net revenue after refunds is $10,800.

• Cohort ARPU: $10,800 ÷ 2,000 = $5.40 per DOI
• Cohort ARPPU: $10,800 ÷ 100 = $108 per payer
• Check: $108 × 5% = $5.40

This sets the ceiling for your purchase price:

Maximum CPL per registration = cohort ARPU (net) × gross margin × (1 − target margin)

At a 70% gross margin and an LTV:CAC target of 3:1, you keep two thirds and can spend one third: $5.40 × 0.70 ÷ 3 = $1.26 per DOI. Per payer, that is $108 × 0.70 ÷ 3 = $25.20, the same ceilings as in our cost per acquisition guide. Subtract tracking, fraud screening and intermediary costs before you set a target CPL.

Counting SOI instead of DOI changes the denominator and with it cohort ARPU; see SOI vs DOI leads. Divide cohort ARPU by the CPL you actually paid and you get cohort ROAS, as explained in our ROAS formula guide. Publishers and media buyers paid on RevShare effectively earn a share of their source's cohort ARPU: at 30% RevShare, $5.40 × 0.30 = $1.62 per DOI.

ARPU by traffic source: why a blended average misleads

A blended ARPU is a weighted average and says little about which source is worth its price. Suppose a second source delivers another 2,000 DOI in the same month at the same price (all numbers hypothetical):

ARPPU is identical in both sources; the gap comes entirely from the payer rate. Judge both sources on the blended figure and your ceiling is $0.88. You then overpay source B by up to $0.38 per DOI and leave $0.38 of headroom unused at source A.

Build cohorts by source, sub-ID, GEO and device. Registration month matters too: price changes, seasonality and new packs shift the ARPU of later cohorts, and app store fees can change net ARPU on mobile. All of this requires payments and refunds to be reported back per click ID, for example via S2S postback.

How to increase ARPU in dating

Since ARPU = ARPPU × payer rate, there are two directions: get more users to their first purchase, or raise revenue per payer.

• Raise the payer rate. Keep the path to the first purchase short and clear, for example with an affordable entry offer or a small first credit pack. Traffic quality matters as well: prelanders that qualify users honestly bring fewer but more purchase-ready registrations; see our guide to dating prelanders.
• Design prices and plans. Plan lengths such as 1, 3 or 12 months, price anchors and pricing by GEO all affect ARPPU. Test changes per cohort, not across the whole base.
• Tier your credit packs. Several pack sizes, top-up offers and credits as an add-on to subscriptions raise revenue per payer when the value is clear.
• Reduce refunds. Clear pricing and renewal notices and realistic promises in your ads cut refunds and chargebacks and lift net ARPU.

Track payer rate and churn alongside every change. Higher prices can lift ARPPU while causing fewer first purchases or faster cancellations. What counts is cohort ARPU over a fixed window, not first-month revenue.

Common ARPU calculation mistakes

1. Mixing gross and net revenue. One month gross, the next net of refunds, and you see a decline that does not exist.
2. Mixing periods. Quarterly revenue divided by monthly users, or monthly revenue divided by every account ever registered, produces a meaningless number.
3. Switching the user base. In the example, ARPU is $1.90 per active user and $0.38 per registered account. Compare the two and you see a collapse that exists only in the definition.
4. Confusing ARPU and ARPPU. In payer-based LTV formulas, this understates value by the payer rate.
5. Counting payers twice. A user who buys a subscription and credits is one payer, not two.
6. Using monthly ARPU as the value of a registration. Bids and payouts depend on the cohort ARPU of new users.
7. Averaging across sources. A healthy blended ARPU can hide weak sources and undervalue strong ones.

FAQ

What does ARPU mean?

ARPU stands for average revenue per user: the average revenue each user brings in over a period. It divides revenue by all users, including those who pay nothing, so it shows how well a product monetizes its entire user base.

What is the ARPU formula?

ARPU = revenue in the period ÷ users in the period. For example, $190,000 in net revenue across 100,000 monthly active users is $1.90 per user per month. Decide upfront which users count and whether you use gross or net revenue.

What is the difference between ARPU and ARPPU?

ARPU divides revenue by all users, ARPPU by paying users only. The payer rate connects them: ARPU = ARPPU × payer rate. For payer-based LTV formulas, ARPPU is the right input.

Conclusion

ARPU is only as meaningful as its definition: which users, which revenue, which period. ARPU = ARPPU × payer rate tells you whether more users are paying or payers are spending more. For buying traffic, what counts is cohort ARPU per source, which sets your maximum CPL per registration. If you want to buy dating traffic on transparent terms and judge your sources on real revenue per user, talk to Leadpartner.