app-revenue ~5 min read
ARPDAU explained: the math behind mobile app and game revenue
ARPDAU is your net daily revenue divided by daily active users. Here's the formula for both streams — ad impressions × eCPM and in-app purchases after the store cut — with a worked example.
ARPDAU is Average Revenue Per Daily Active User — your net daily revenue divided by daily active users (DAU). For a game earning from ads and in-app purchases, model the two streams separately, then combine:
Ad revenue/day = DAU × impressions-per-user × eCPM ÷ 1,000
IAP net/day = DAU × daily-payer-rate × avg-purchase-value × (1 − store cut)
ARPDAU (net) = (Ad revenue/day + IAP net/day) ÷ DAUThe app store takes its cut of in-app purchases only — never of ad revenue.
If you’re sizing an indie game’s earning potential, ARPDAU is the number that ties everything together. It’s small — often measured in cents — but multiplied by your daily audience and 365 days, those cents decide whether the project is a hobby or a business. This page breaks the number into its two real streams and shows the math end to end.
What ARPDAU actually measures
ARPDAU = total daily revenue ÷ daily active users. It answers a single question: on an average day, how much is each active player worth to you? Because it divides out audience size, it lets you compare a 5,000-DAU passion project against a 5-million-DAU hit on the same footing, and it reacts quickly to changes in monetization design — unlike lifetime value, which takes weeks of retention data to stabilize.
Most mobile games run two revenue streams, and they behave differently enough that you have to model them apart.
Stream 1 — Ad revenue
Every active user sees some number of ad impressions per day, and each thousand impressions pays out at the eCPM (effective cost per mille — revenue per 1,000 impressions). Crucially, the eCPM an ad network reports is already your net payout, so the app store takes nothing further:
Ad revenue/day = DAU × impressions-per-user × eCPM ÷ 1,000eCPM is the input that varies most. It swings with geography (a US or UK audience typically pays far more than a low-cost market), ad format (rewarded video and interstitials pay more than banners), fill rate, and even the season — Q4 eCPMs spike as advertisers spend holiday budgets. Treat any single eCPM as a snapshot, not a constant.
Stream 2 — In-app purchases (after the store cut)
Only a small slice of daily active users buy something on a given day. Multiply that payer rate by the average purchase value for daily gross, then subtract the app store’s commission:
IAP gross/day = DAU × daily-payer-rate × avg-purchase-value
IAP net/day = IAP gross/day × (1 − store cut)The store cut is the fee Apple’s App Store and Google Play take on in-app purchases: 30% standard, dropping to 15% for developers enrolled in the small-business programs (broadly, under about $1M a year) and on the second year onward of a subscription. Moving from a 30% to a 15% cut lifts your net share of every purchase from 70% to 85% — worth chasing once you qualify.
A worked example
A modest game with the following inputs (all illustrative — plug in your own):
| Input | Value |
|---|---|
| Daily active users (DAU) | 10,000 |
| Ad impressions per user/day | 8 |
| eCPM | $12 |
| Daily payer rate | 1.5% |
| Average purchase value | $5.00 |
| Store cut | 30% |
Run the two streams:
Ad revenue/day = 10,000 × 8 × $12 ÷ 1,000 = $960
IAP gross/day = 10,000 × 1.5% × $5.00 = $750
IAP net/day = $750 × (1 − 0.30) = $525
Total net/day = $960 + $525 = $1,485
ARPDAU (net) = $1,485 ÷ 10,000 = $0.1485So each daily active user is worth about 15 cents a day, net. Scale it out and the daily total is what matters:
Monthly net ≈ $1,485 × (365 ÷ 12) ≈ $45,169
Yearly net = $1,485 × 365 = $542,025Read the revenue mix
In the example, ads bring in $960 of the $1,485 net and IAP brings in $525 — a 65% ads / 35% IAP split. That mix is a design decision as much as a measurement. A hyper-casual title leans almost entirely on ads and a high impression count; a strategy or RPG title leans on a small share of high-value payers and shows few ads to avoid disrupting them. Knowing your split tells you which lever to pull: more impressions and better eCPM, or a higher payer rate and purchase value.
What the model leaves out
The formula is a clean first pass, not a forecast. It assumes:
- Stable DAU. Real audiences churn; retention decay means the DAU you acquire today isn’t the DAU you keep. ARPDAU paired with retention gives lifetime value — the number you actually compare against acquisition cost.
- A single eCPM and payer rate. Both move daily. Averages hide the Q4 spike and the geographic spread.
- 100% ad fill. Not every impression opportunity is filled by a paying advertiser; a real fill rate below 100% trims the ad stream.
- No taxes or platform fees beyond the store cut. Income tax, and any middleware or mediation revenue share, come off the top separately.
Use ARPDAU to size the opportunity and to A/B-test monetization changes — then layer retention and acquisition cost on top before betting real money on the projection.
Run your own numbers
$20,379
$0.134 ARPDAU · $670/day · $244,550/year
- ARPDAU
- $0.134net per daily active user
- Ad revenue / mo
- $9,733DAU × impressions × eCPM
- IAP revenue / mo
- $10,646net, after store cut
- App-store cut / mo
- $4,56330% of IAP gross
The standalone Ad Revenue & ARPDAU calculator runs the same math — both streams, the store cut, the ads-vs-IAP split, and daily, monthly, and yearly net revenue. Everything runs in your browser.
Go deeper:
- Ad Revenue & ARPDAU calculator — the standalone version of the tool above.
- Compound interest, explained — what reinvesting app profit does over time.
- True hourly wage — for solo devs: what the project actually pays once you count the hours behind it.
Educational content, not financial advice. App-store commission rates reflect Apple and Google’s published terms as of July 2026; both revise their programs periodically — check current developer terms for the rates applied to your account.