Average Revenue Per User (ARPU): Meaning, How It's Used, Example

What Is Average Revenue Per User?

By Jeremy Bowman – Updated Sep 9, 2025 at 12:22 PM

Key Points

ARPU measures average revenue generated per user, aiding investors in evaluating company efficiency.
Higher ARPU often indicates a stronger position for a company compared to industry peers.
ARPU analysis helps gauge user value and strategic growth, especially in tech and media sectors.

Most businesses seek to maximize revenue or profits, but one of the most important key performance indicators (KPIs) is average revenue per user (ARPU), a key driver of both revenue and profits. Arguably, ARPU is even more important than total revenue because it shows that the company isn't adding revenue by simply bringing in new customers, possibly at a discounted price.

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Laptop opening to reveal streaming screens. — Image source: Getty Images.

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ARPU fell 1% in the quarter as its subscriber mix shifted to countries with lower subscription prices. The company breaks down ARPU on a regional basis, showing that the figure rose in Latin America and Europe but fell in its two other regions.

Investors will want to see those ARPU figures increase over the coming quarters, which should help drive Netflix's stock price higher. The company has recently seen a boom in subscriber growth thanks to its crackdown on password sharing. However, subscriber growth will eventually decelerate, and the company will want to increase ARPU.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has positions in Meta Platforms, Netflix, and Pinterest. The Motley Fool has positions in and recommends Meta Platforms, Netflix, and Pinterest. The Motley Fool has a disclosure policy.