DEFINITION of 'Average Margin Per User - AMPU'

A widely used metric for gauging the success of businesses in the telecommunications industry. Average margin per user (AMPU) measures the margin made by the firm from each customer, typically measured as the revenue minus the costs and divided by the number of users.

BREAKING DOWN 'Average Margin Per User - AMPU'

Although most telecommunications-industry analysts and firms use average revenue per user (ARPU) as a profitability indicator, AMPU is arguably a more reliable metric of a firm's profitability. By breaking down customer sales by margin rather than by revenue, companies that have lower sales volumes but create larger margins can be considered more efficient and arguably more profitable than their high-volume competitors.

  1. Average Revenue Per Unit - ARPU

    Average Revenue Per Unit - ARPU is the measure of the revenue ...
  2. Marginal Profit

    Marginal profit is the profit earned by a firm or individual ...
  3. Marginal Revenue - MR

    The increase in revenue that results from the sale of one additional ...
  4. Gross Margin

    A company's total sales revenue minus its cost of goods sold, ...
  5. Profitability Ratios

    A class of financial metrics that are used to assess a business's ...
  6. EBITDA Margin

    EBITDA margin is a measurement of a company's operating profitability ...
Related Articles
  1. Small Business

    Facebook Users Might Earn Money Via "Tip Jar" (FB)

    Facebook is considering a plan to allow users to earn money from its platform by using tipping jars and making sponsored posts.
  2. Managing Wealth

    What's a Good Profit Margin for a Mature Business?

    How to determine if the amount you clear dovetails with the competition.
  3. Financial Advisor

    Key Metrics to Measure Your Advisory Practice

    These key metrics can help financial advisors measure their success.
  4. Small Business

    What Is Facebook’s Advantage Over Other Social Media? (FB)

    Discover the elements that define Facebook, which boasts 1.6 billion users who cement the company as the world's top social media outlet.
  5. Investing

    Twitter: A Company in Search of a Turnaround Story (TWTR)

    Will Twitter's most recent earnings report bring good news to the company's investors?
  6. Investing

    Snapchat IPO Wants to Avoid Twitter's Mistakes

    Snapchat User: The company wants to avoid Twitter's mistakes and convince investors of its $20 billion valuation
  7. Investing

    The Gross Margin

    A business's "gross margin" is a rough gauge of how profitable its operations are. It measures how much sales revenue the company retains after all of the direct costs associated with making ...
  8. Investing

    Snap Needs a Strong 2Q to Stop Its Free Fall

    Edge of the Abyss: Snap's stock could plunge further if it fails to deliver
  1. What types of financial margins should investors pay the most attention to before ...

    Learn what types of financial margins, such as profit and cash margins, an investor should pay the most attention to before ... Read Answer >>
  2. What's the difference between profit margin and operating margin?

    Learn the differences between a company's gross profit margin, net profit margin and operating margin, and what each profitability ... Read Answer >>
  3. What are some of the common trends of the Average Revenue Per User in the telecommunications ...

    Learn about the common trends in the average revenue per user, or APRU, for the telecommunications industry and why ARPU ... Read Answer >>
  4. What metrics are commonly used to evaluate companies in the internet sector?

    Discover the best metrics to evaluate Internet companies. Internet companies are unique in that their costs are low but potential ... Read Answer >>
  5. What costs are not counted in gross profit margin?

    Explore the various measures of a company's profitability, such as gross, operating and net profit margins, and understand ... Read Answer >>
  6. What is a good operating margin for a business?

    Read about what it means to have a good operating margin and why that answer depends heavily on competitive and historical ... Read Answer >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center