ROAS Calculator (Return on Ad Spend)

How to use the ROAS calculator

Enter your ad spend, the revenue attributed to those ads and your gross margin (the share of revenue left after the cost of goods). You get ROAS, profit after ad spend, the break-even ROAS and marketing ROI.

ROAS formulas

ROAS = Revenue ÷ Ad spend  ·  Break-even ROAS = 1 ÷ Margin

Profit = Revenue × Margin − Ad spend  ·  ROI = Profit ÷ Ad spend

Break-even ROAS by margin

Gross margin	Break-even ROAS	Target ROAS for 20% ROI
20%	5.00×	6.00×
25%	4.00×	4.80×
30%	3.33×	4.00×
40%	2.50×	3.00×
50%	2.00×	2.40×
60%	1.67×	2.00×
70%	1.43×	1.71×
80%	1.25×	1.50×

Example

1,000 spent, 4,000 revenue, 40% margin:

• ROAS = 4,000 ÷ 1,000 = 4×
• Gross profit = 1,600; after ad spend = 600
• Break-even ROAS = 2.5×
• Marketing ROI = 60%

Beyond the first order

ROAS looks only at the first purchase. If customers buy again, the true return is higher. Compare acquisition cost with customer lifetime value for a fuller picture.

Attribution caveats

• Ad platforms often over-attribute sales (several platforms may claim the same order).
• View-through conversions can inflate ROAS.
• Use consistent attribution windows when comparing campaigns.

Improving ROAS

• Raise conversion rate with better landing pages and offers.
• Increase average order value with bundles and upsells.
• Cut spend on keywords, audiences and placements below break-even.
• Track ad metrics such as CTR and CPC with the ad metrics calculator.

Frequently asked questions

What is a good ROAS?

It depends on your margin. A common benchmark is 4× (400%), but a business with 25% margins needs at least 4× just to break even, while one with 60% margins breaks even at 1.67×.

How is ROAS calculated?

ROAS = revenue from ads ÷ ad spend. 4,000 of revenue from 1,000 of spend is a ROAS of 4× (400%).

What is break-even ROAS?

The ROAS at which gross profit exactly covers ad spend: 1 ÷ gross margin. At a 40% margin, break-even ROAS is 2.5×.

What is the difference between ROAS and ROI?

ROAS uses revenue; ROI uses profit. A campaign can have a 3× ROAS and still lose money if margins are thin.

Related calculators

• Customer Lifetime Value Calculator (CLV and LTV:CAC)Calculate customer lifetime value from order value, purchase frequency, margin and retention — and compare it with acquisition cost (LTV:CAC).
• CPM, CPC, CTR and CPA CalculatorCalculate CPM, CPC, CTR, conversion rate and cost per acquisition from ad spend, impressions, clicks and conversions — all in one place.
• Profit Margin CalculatorCalculate profit, profit margin and markup from cost and selling price — or find the price for a target margin.
• ROI Calculator (Return on Investment)Calculate return on investment (ROI), gain and annualized return from the amount invested and the final value.
• Payback Period CalculatorCalculate how long an investment takes to pay for itself from yearly savings or cash flow — simple and discounted payback.
• Break-Even CalculatorFind the break-even point in units and revenue from fixed costs, selling price and variable cost per unit.

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