Average Revenue Per User (ARPU) measures the average revenue generated per user or account over a specific period. It provides insight into the revenue contribution of each user, helping businesses understand the value of their customer base and make informed decisions about pricing, marketing, and product development.

ARPU is calculated by dividing the total revenue for a period by the number of active users during that period.

1. Basic Example: A company generates $100,000 in revenue in a month with 1,000 active users. The ARPU is:

\begin{align}ARPU &= \frac{100,000}{1,000} \cr&= 100 \text{ USD}\end{align}

2. Tiered Pricing Example: A company generates $200,000 in revenue with 2,500 active users in a quarter. The ARPU is:

\begin{align}ARPU &= \frac{200,000}{2,500} \cr&= 80 \text{ USD}\end{align}