Term · Business Model & Operating KPIs
ARPA
In briefARPA (Average Revenue per Account) indicates the average revenue per customer account. For B2B and SaaS small caps, the metric shows the quality of the customer base and the upselling potential.
Definition
ARPA stands for Average Revenue per Account and measures the average revenue per customer account or corporate customer.
How it is calculated
Formula. ARPA = recurring revenue / average number of active accounts.
Why it matters for small caps
For B2B and SaaS small caps, ARPA shows the quality of the customer base and upselling potential.
Common misreadings
- ARPA is often confused with ARPU, although accounts can encompass multiple users.
In the process
Frequently asked
What is ARPA?
It is the average revenue per customer account or corporate customer. It thus measures the value of a single account.
How is ARPA calculated?
You divide the recurring revenue by the average number of active accounts. That gives the revenue per account.
How does ARPA differ from ARPU?
An account can encompass multiple users, whereas a user stands for one person. Confusing the two distorts the interpretation.
Related terms
Sources
Primary
ESMA – Guidelines on Alternative Performance Measures
https://www.esma.europa.eu/document/esma-guidelines-alternative-performance-measures
https://www.esma.europa.eu/document/esma-guidelines-alternative-performance-measures
Methodology
U.S. SEC – Non-GAAP Financial Measures
https://www.sec.gov/rules-regulations/staff-guidance/corporation-finance-interpretations/non-gaap-financial-measures
https://www.sec.gov/rules-regulations/staff-guidance/corporation-finance-interpretations/non-gaap-financial-measures
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.