How to calculate ARPA (average revenue per account)
ARPA (average revenue per account) measures the average recurring revenue each account contributes. In B2B, where one contract covers many users, ARPA reflects the real unit of sale better than per-user metrics.
A rising ARPA usually signals larger customers or successful expansion; a falling ARPA can mean discounting or a shift toward smaller accounts. Segmenting ARPA reveals which is happening.
- Revenue / accounts The formula
- B2B unit of sale Why ARPA over ARPU
- Mix + pricing What ARPA reveals
Short answer
Average revenue per account is total recurring revenue divided by the number of accounts in a period. If you earn 500,000 dollars of MRR from 250 accounts, ARPA is 2,000 dollars per month. ARPA reveals pricing power and customer mix, and it is often more meaningful than ARPU in B2B because you sell to accounts, not individuals.
Step by step
Pick a period and revenue base
Choose monthly or annual and use recurring revenue (MRR or ARR). Keep the window consistent for a comparable trend.
Count active accounts
Count the number of paying accounts, the companies you sell to, in the period.
Divide revenue by accounts
ARPA equals recurring revenue divided by the number of accounts. The result is average revenue per account.
Segment to find the story
Break ARPA out by plan, cohort, and segment. Blended ARPA can hide that enterprise ARPA is rising while SMB ARPA falls.
Worked example
Your MRR is 600,000 dollars across 400 accounts, so ARPA is 1,500 dollars per month. A year later MRR is 1,000,000 dollars across 500 accounts, giving an ARPA of 2,000 dollars.
The 33 percent ARPA increase means each account is worth more, likely from upsell or a richer plan mix, not just more logos. That is a healthier growth signal than adding accounts at a flat or falling ARPA.
How Ardovo handles it
Ardovo computes ARPA by plan, cohort, and segment automatically, so you see whether growth comes from more accounts or richer ones. Rook flags when blended ARPA hides a declining segment underneath the average.
Frequently asked questions
What is the ARPA formula?
Total recurring revenue in a period divided by the number of active accounts in that period. Use a consistent monthly or annual window and recurring revenue only, so the trend is comparable over time.
What is the difference between ARPA and ARPU?
ARPA is revenue per account or company; ARPU is revenue per individual user. In B2B, ARPA is usually more meaningful because you sell to accounts that contain many users, making the account the real unit of sale.
How do I increase ARPA?
Raise prices, improve packaging and tiering, upsell and cross-sell existing accounts, or shift acquisition toward larger customers. Expansion within accounts is often the most durable lever because it compounds through retention.