ARPU and ARPPU

ARPU is average revenue per user across everyone, while ARPPU is average revenue per paying user across only the people who actually spend, and the gap between the two shows you how monetization really works in your app.

You look at how much money your app makes and you want a per-person number, something cleaner than a lump sum. So you take your revenue for a period and divide it by your total users. That is ARPU, average revenue per user, and it counts everybody, the free riders included. It tells you what an average member of your whole base is worth to you, which is useful when you are weighing what you can afford to spend to acquire one.

Then you run a second number. You take the same revenue and divide it only by the people who paid you anything at all. That is ARPPU, average revenue per paying user, and it ignores everyone who never opened their wallet. It tells you what a customer is worth once they have crossed the line from user to buyer. On most apps ARPPU sits far above ARPU, because paying users are a slice of the whole, and the size of that gap is the tell. A wide gap means a small paying minority carries the app; a narrow gap means paying is closer to normal behavior.

A few heavy spenders can lie to you. A handful of big payers, the kind free-to-play teams call whales, can pull ARPU up and hide the fact that almost nobody pays at all. The average looks healthy while the model underneath rests on a tiny group you cannot count on. So watch your payer conversion rate, the share of users who ever spend, right alongside these averages.

Averages tell you how much; conversion tells you how many, and you need both before you trust either.