The average revenue earned by a company based on customer subscriptions. It is generally calculated on a monthly basis, although it can be calculated based on weekly, quarterly and annual revenue.
The ARPA metric is widely used by telecommunications companies, software as a service (SAAS), social media companies and banks.
ARPA is a profitability metric that is not recognized by accounting standards such as GAAP or IFRS. However, companies in the relevant industries report the metric in their financial statements and spend a significant amount of time discussing their results.
This metric is extremely valuable in providing an overview of a company's profitability on a per account basis. In addition, it reveals which of the company's products or services generate the most and least revenue.