Average revenue per user meaning

average revenue per user (ARPU) is a commercial metric used in legal practice to describe the mean revenue generated from each active customer or subscriber over a stated period, usually per month but also per year. It is not defined in UK or Irish legislation or case law and is a descriptive term used across contracts, M&A and regulatory contexts. ARPU is typically calculated as total recognised revenue for the period divided by the number of active users or subscribers. For drafting and due diligence, define: the period (monthly or annual); revenue included (subscription fees, usage, advertising) and excluded (VAT/sales taxes, refunds, one‑off or inter‑company items); the user base (paying users only, treatment of free tiers, multi‑seat accounts or churn); the accounting basis, data source, currency and any FX rates. Parties sometimes use “average revenue per account (ARPA)” where measured per account rather than per end user. ARPU is commonly used as a KPI in telecoms, media, technology and other subscription businesses; in share purchase agreements (valuation, warranties and earn‑out targets); and in competition or regulatory analysis by sector regulators such as Ofcom or ComReg. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland.