ROAS Calculator
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This ROAS calculator works out your return on ad spend, the break-even ROAS for your profit margin, and the revenue you need to reach a target. $4,000.00 of revenue from $1,000.00 of ads is a ROAS of 4, and at a 25% margin that is exactly break-even. Add your margin to see whether a campaign makes money.
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How to use the roas calculator
- Choose to work out ROAS, break-even ROAS, or the revenue needed for a target ROAS.
- Enter your ad spend and the revenue from those ads, or the number the mode asks for.
- Add your profit margin before ad costs to see whether your ROAS is above break-even and what you make after ads.
How ROAS is calculated
ROAS
ROAS = Revenue from ads ÷ Ad spend
ROAS % = ROAS × 100
Break-even ROAS
Break-even ROAS = 1 ÷ Profit margin (as a decimal)
= 100 ÷ Profit margin %
Profit after ads
Profit = Revenue × Profit margin − Ad spend
Revenue needed for a target
Revenue = Ad spend × Target ROAS
ROAS Calculator examples
Example 1: spend and revenue
You spend $1,000.00 and the ads bring in $4,000.00. ROAS = $4,000.00 ÷ $1,000.00 = 4x (400%). With a 25% margin your break-even ROAS is 100 ÷ 25 = 4, so profit after ads is $4,000.00 × 25% − $1,000.00 = $0.00. With a 40% margin the break-even drops to 2.5, and the same campaign makes $600.00.
Example 2: break-even from margin
Your profit margin before ads is 20%. Break-even ROAS = 100 ÷ 20 = 5x. Every dollar of ads must return $5.00 in revenue just to break even.
Example 3: revenue needed for a target
Spending $500.00 with a target ROAS of 3 means you need $500.00 × 3 = $1,500.00 in revenue.
Break-even ROAS by profit margin
If your ROAS is below the number in the second column, you lose money on the ads.
| Profit margin | Break-even ROAS | As a percentage |
|---|---|---|
| 10% | 10x | 1,000% |
| 20% | 5x | 500% |
| 25% | 4x | 400% |
| 30% | 3.33x | 333% |
| 40% | 2.5x | 250% |
| 50% | 2x | 200% |
Where the number comes from: profit after ads is revenue × margin − ad spend. Set that to zero and divide both sides by ad spend, and revenue ÷ spend = 1 ÷ margin. At a 25% margin, $1,000.00 of spend needs $4,000.00 of revenue to break even, which is a ROAS of 4.
What is a good ROAS?
It depends on your margin, so there is no single good number. A ROAS of 3 is a loss at a 20% margin, where break-even is 5, and a profit at a 50% margin, where break-even is 2. Compare your ROAS with your break-even ROAS, and aim for a margin of safety above it, because your real margin can be lower than the one you enter once you count returns and fees. Use the profit margin calculator to work out your margin first.
ROAS, ROI and ACOS compared
The three measure the same campaign from different sides. Take $1,000.00 of ad spend that brings in $4,000.00 of revenue at a 40% margin before ads.
- ROAS = revenue ÷ spend = $4,000.00 ÷ $1,000.00 = 4x.
- ROI = profit after ads ÷ spend. Profit is $4,000.00 × 40% − $1,000.00 = $600.00, so ROI = 60%.
- ACOS = spend ÷ revenue = 25%, the inverse of ROAS.
ROAS and ACOS ignore your costs. ROI includes them through the margin, which is why a campaign can have a good ROAS and a poor ROI.
Revenue needed for a target ROAS
Revenue = ad spend × target ROAS. Common cases:
| Ad spend | 2x | 3x | 4x | 5x |
|---|---|---|---|---|
| $500.00 | $1,000.00 | $1,500.00 | $2,000.00 | $2,500.00 |
| $1,000.00 | $2,000.00 | $3,000.00 | $4,000.00 | $5,000.00 |
| $5,000.00 | $10,000.00 | $15,000.00 | $20,000.00 | $25,000.00 |
Things that distort ROAS
- Which revenue you count. Revenue before returns, discounts, tax and shipping charges overstates what you keep. Use revenue that matches the margin you enter.
- Attribution. Each ad platform decides which sales to credit to its ads, and the rules and time windows differ, so the same sale can show up in more than one report.
- The time window. A customer who buys again later, or who clicked an ad weeks before buying, may fall outside the period you measure.
- Margin that changes. A sale at a discount has a lower margin, so the break-even ROAS is higher. Run the calculation with the margin you actually earn.
ROAS Calculator questions
What is ROAS?
ROAS stands for return on ad spend. It’s the revenue your ads bring in divided by what you spent on them. $4,000.00 of revenue from $1,000.00 of ads is a ROAS of 4, often written 4x or 400%.
How do I calculate ROAS?
Divide the revenue attributed to the ads by the ad spend. Use the same period and the same ad platform for both numbers.
What is a good ROAS?
It depends on your margins. A ROAS only makes money if it’s above your break-even ROAS. A business with a 50% margin breaks even at 2x; one with a 10% margin needs 10x. Use the break-even option to find your own number rather than a rule of thumb.
How do I calculate break-even ROAS?
Divide 1 by your profit margin before ad costs. With a 25% margin: 1 ÷ 0.25 = 4. At a 20% margin the break-even ROAS is 5, and at 40% it is 2.5.
What is a good ROAS for ecommerce?
There is no universal number. A ROAS of 3 loses money at a 20% margin (break-even is 5) and makes money at a 50% margin (break-even is 2). Work out your own break-even ROAS from your margin, then aim above it.
What is ACOS and how does it relate to ROAS?
ACOS (advertising cost of sales) is ad spend divided by ad sales, the inverse of ROAS. A ROAS of 4 is an ACOS of 25%. Your break-even ACOS equals your profit margin before ad costs.
Why does my ROAS look good but I am losing money?
Because ROAS ignores margin. $1,000.00 of ads that bring in $3,000.00 is a ROAS of 3, but at a 20% margin that is $600.00 of profit against $1,000.00 of spend, a loss of $400.00. Compare ROAS with the break-even figure, not with a generic target.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend. ROI compares profit to cost, so it also reflects what the product cost you. A campaign can have a healthy-looking ROAS and still lose money if the margin is thin, which is why the break-even ROAS matters.
Does ROAS include other costs?
No. It only looks at ad spend. Agency fees, creative costs, shipping, returns and platform fees aren’t part of it unless you include them in the spend or have already taken them out of your margin.
What this calculator doesn’t do
- It doesn’t decide which sales your ads caused. Revenue attribution depends on your ad platform and tracking.
- It uses a single margin. Different products with different margins need separate calculations.
- It looks at one period. Customers who buy again later aren’t counted.
- It isn’t financial advice.
Results are estimates for planning, not financial advice. The methodology page explains how every calculator here is built and checked.