How to calculate average revenue per user (ARPU) in Excel and Google Sheets

Step by step

1. 1In column A, list each month (rows 2–6). In column B, enter total MRR for that month. In column C, enter total active users at month end.
2. 2Calculate ARPU for each month in column D: =B2/C2. Copy down through D6.
3. 3To get a period-average ARPU, sum total MRR across months in B7 with =SUM(B2:B6), and sum total users in C7 with =SUM(C2:C6).
4. 4Compute average ARPU for the period in D7 with =B7/C7.
5. 5Alternatively, use =AVERAGE(D2:D6) for a simple average of monthly ARPU values — the two approaches give slightly different results when user counts vary significantly.

Tips

• Define 'user' precisely before calculating: does it mean seats, unique logins, or accounts? The definition must remain consistent over time or ARPU becomes incomparable.
• ARPU is most useful when segmented — ARPU for free users vs paid users, or ARPU by plan tier. A blended ARPU that mixes free and paid tiers usually obscures more than it reveals.
• Rising ARPU alongside stable or growing user count is a strong signal of healthy monetization. Falling ARPU despite user growth may indicate excessive discounting or a shift toward lower-tier plans.

Frequently asked