ROAS Calculator — Return on Ad Spend
Find out whether your ads are making money. Enter ad spend, revenue and your profit margin to see ROAS, actual profit after ad costs, ROI, and the break-even ROAS you need to beat.
Return on ad spend
How to calculate ROAS
- Enter what you spent on ads and the revenue those ads produced (from your ad platform or analytics).
- Enter your gross margin: the share of revenue left after the cost of goods. This is what turns ROAS into profit.
- Optionally add the number of orders to see cost per order and average order value.
ROAS vs profit
ROAS is revenue divided by ad spend: 4.0 (often written 4x or 400%) means $4 of revenue per $1 of ads. It is the standard way platforms report performance, but it ignores costs. A 4x ROAS on a product with a 20% margin loses money, while 2x on a 70% margin product is very profitable.
Break-even ROAS is 1 ÷ margin. With a 45% margin you need a ROAS of about 2.22 just to cover the cost of goods and the ads. Anything above that is profit (before overhead); anything below loses money on each sale. Set campaign targets from this number, not from industry averages.
Remember that platform-reported revenue depends on attribution windows and may include sales that would have happened anyway. Compare against your own sales data, and consider customer lifetime value: a campaign that only breaks even on the first order can still be profitable if customers come back. Our LTV:CAC calculator helps with that.
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Frequently asked questions
What is a good ROAS?
One comfortably above your break-even ROAS. For many e-commerce businesses that is 3–4x, but it depends entirely on margin.
How is ROAS different from ROI?
ROAS uses revenue; ROI uses profit. ROI = (gross profit − ad spend) ÷ ad spend.
How do I calculate break-even ROAS?
Divide 1 by your gross margin as a decimal. A 40% margin gives a break-even ROAS of 2.5.
Should ROAS include shipping and fees?
For accurate profit, factor shipping, payment fees and returns into the margin you enter.