Formulas

ARPU  = Revenue / All active users (MAU)
ARPPU = Revenue / Paying users

Example: revenue for the month $50,000, MAU = 50,000, paying users = 2,500.
– ARPU = 50,000 / 50,000 = $1.00
– ARPPU = 50,000 / 2,500 = $20.00

Using ARPU to assess personalization

ARPU is convenient for comparing cohorts: users who received a personalized experience versus a control group.

ARPU (with personalization) = $1.45
ARPU (without personalization) = $1.10
Uplift = +32%

Because ARPU already combines conversion and order value in a single number, it does not hide the trade-off that a conversion-only comparison can mask — a variation that converts more users at a lower basket size shows up as flat ARPU rather than a win.

ARPU by segment

Breaking ARPU down by audience segment exposes where the growth sits:

Segment Typical ARPU Growth potential
New users Low Onboarding and the first purchase
Repeat (2–5 orders) Medium Increasing frequency
Loyal (6+ orders) High AOV, upsell
Dormant Low or zero Reactivation

Personalization works differently in each segment: for new users it lowers the barrier to the first purchase, for loyal ones it raises AOV.