Average revenue per account (ARPA)
Also known as: ARPA
In short
Average revenue per account (ARPA) is total recurring revenue divided by the number of active customer accounts in the same period. It shows how much a typical account pays you.
ARPA is usually measured monthly or annually. It is an average, so a few very large accounts can pull it well above what most customers pay.
How to calculate ARPA
Divide recurring revenue for the period by the number of paying accounts.
- Formula: ARPA = recurring revenue / active accounts
- Example: Say a company has 200 active accounts and 100,000 in monthly recurring revenue. ARPA is 500 per month.
ARPA vs. ARPU
ARPU divides revenue by individual users. ARPA divides by accounts, where an account is a paying customer entity that may have many users. In B2B, where a company buys seats for a team, ARPA usually fits better. See average revenue per user for the user-level view.
How GTM teams use ARPA
Check whether the ICP is paying off
Compare ARPA across segments, industries, or sources. If one segment pays far more, it may deserve more prospecting effort.
Set a sustainable acquisition budget
ARPA times gross margin, spread over expected lifetime, helps estimate how much you can spend to win an account.
Track expansion
A rising ARPA with a stable account count suggests accounts are growing through upsell or cross-sell.
Common mistakes
- Trusting the average: A skewed customer base hides the real picture. Also look at the median and at ARPA by segment.
- Mixing revenue types: Include only recurring revenue. One-time setup or services fees inflate ARPA.
- Ignoring new vs. existing accounts: A falling ARPA can mean you are landing smaller customers, not that existing ones are shrinking. Split the two.
Average revenue per account (ARPA) FAQs
What is average revenue per account (ARPA)?
ARPA is the average recurring revenue generated by each active customer account over a period. You find it by dividing total recurring revenue by the number of paying accounts, usually per month or per year.
How do you calculate ARPA?
Divide recurring revenue for a period by the number of active accounts in that period. For example, 100,000 in monthly recurring revenue across 200 accounts gives an ARPA of 500 per month. Use the same period for both numbers.
What is the difference between ARPA and ARPU?
ARPA measures revenue per customer account, while ARPU measures revenue per individual user. In B2B software, where one company account has many users, ARPA is usually the more useful number for pricing and segment comparisons.
Is a higher ARPA always better?
Not always. A higher ARPA can come from upselling healthy accounts, but it can also mean you lost small customers and the average rose. Check it alongside churn, account count, and segment-level breakdowns before drawing conclusions.
