Average Revenue Per User (ARPU)

ARPPU, or Average Revenue Per Paying User, measures the average revenue generated by users who actually make payments within your app. Unlike ARPU which includes all users, ARPPU focuses exclusively on paying customers – providing a clearer picture of how much value your monetizing users deliver. This metric is essential for subscription apps, freemium games, and any business where only a portion of users convert to paying customers.

ARPDAU, or Average Revenue Per Daily Active User, measures the average revenue generated by each active user on a daily basis. This granular monetization metric is particularly valuable for apps expecting frequent user engagement, such as mobile games, social apps, and subscription-based services. Unlike broader metrics like ARPU, ARPDAU provides immediate visibility into how app changes, promotional events, or monetization adjustments impact daily revenue generation. ARPDAU stands for Average Revenue Per Daily Active User. It is a key performance indicator (KPI) that calculates the average amount of revenue an app generates from each user who actively engages with the app on a given day. This metric captures revenue from all monetization sources, including in-app purchases (IAP), subscriptions, and in-app advertising (IAA).

LTV meaning, Lifetime Value (LTV), is a performance indicator used to evaluate the total earnings generated by a customer throughout their entire tenure of using a mobile application. Historical data on user retention rates is often used to estimate the expected duration of user engagement. Having knowledge of what is LTV and the average LTV of your customers is crucial for executing successful marketing strategies. LTV in marketing for mobile apps is normally used to optimize revenue streams such as subscriptions, in-app advertising, and in-app purchases by determining the amount of money that can be spent on user acquisition while still being profitable.

Monthly Recurring Revenue (MRR) is the predictable, normalized monthly revenue generated from all active subscriptions. MRR is calculated by summing the monthly-equivalent value of every active subscription — annual plans are divided by 12, weekly plans are multiplied by approximately 4.33, and monthly plans are counted at face value. MRR is the foundational financial metric for subscription app businesses because it provides a consistent, comparable measure of revenue trajectory regardless of billing cadence mix. MRR is typically broken down into component parts: New MRR (revenue from first-time subscribers), Expansion MRR (revenue from upgrades, upsells, or cross-sells), Contraction MRR (revenue lost from downgrades), Churned MRR (revenue lost from cancellations), and Reactivation MRR (revenue from previously churned subscribers who re-subscribe). Tracking these components separately reveals the underlying dynamics driving overall revenue growth or decline. A company with strong headline MRR growth but high churned MRR may be masking a retention problem with aggressive acquisition spending — an unsustainable pattern that component-level analysis makes visible.

Active users is a fundamental metric that counts the number of unique individuals who engage with your mobile app within a specific time period. This metric serves as a key indicator of app health, user engagement, and growth potential. By tracking active users across different time frames—daily (DAU), weekly (WAU), and monthly (MAU)—app developers and marketers can measure product stickiness, evaluate marketing effectiveness, and make data-driven decisions to optimize user acquisition and retention strategies.