Average revenue per user (ARPU) is the average revenue generated per active customer over a defined period, calculated as total recurring revenue divided by the number of active customers. ARPU is used in subscription, SaaS, telecommunications, and consumer service businesses to track unit economics and pricing power.
In Australian SaaS M&A, the trend in ARPU over time (rising, flat, declining) is scrutinised as a signal of pricing power and product-market fit. Rising ARPU with stable or improving retention is the most valuable combination.