ARPA (Average Revenue per Account)
ARPA definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.
ARPA is the average monthly recurring revenue per paying account. It is a quick way to see whether you sell to small or large customers and whether pricing changes stick.
Formula
ARPA = MRR ÷ number of paying customers
In practice
ARPA hides distribution: a few large customers can lift it while most pay little.
Related terms
Related
- ARRAnnualized recurring revenue: MRR multiplied by twelve.
- CACSales and marketing spend per new customer.
- ChurnCustomers or recurring revenue lost in a period.
- COGSThe direct cost of delivering your product to existing customers.
- Contribution marginRevenue minus all variable costs, including variable sales costs.
- Expansion MRRMRR added by existing customers through upgrades or more seats.
See your real margin in five minutes.
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