Return on ad spend
ROAS calculator
Enter revenue and ad spend to see your return on ad spend — then check it against your break-even ROAS to know if the ads actually make money.
Your ROAS
4×
revenue for every 1 spent on ads
$2,000 ÷ $500.00 = 4×
Break-even ROAS
The minimum ROAS your ads need to pay for themselves, from your profit margin.
Break-even ROAS
2.50×
Below this, every sale from ads loses money.
The ROAS formula
ROAS = revenue from ads ÷ ad spend
Break-even ROAS = 1 ÷ profit margin
Break-even ROAS by margin
| Profit margin | Break-even ROAS |
|---|---|
| 20% | 5.00× |
| 30% | 3.33× |
| 40% | 2.50× |
| 50% | 2.00× |
| 60% | 1.67× |
| 70% | 1.43× |
Use your margin after product cost, shipping and payment fees — the money left from a sale before advertising. The thinner the margin, the higher the ROAS you need.
Reading ROAS correctly
- Check attribution. Platforms count conversions their own way; compare against your store's actual sales.
- Mind repeat customers. A first order below break-even can still be worth it if customers come back.
- Watch the cost side. ROAS improves when CPA falls or order value rises.
Frequently asked questions
How do you calculate ROAS?
Divide the revenue from ads by what you spent on them. $2,000 in sales from $500 of ads is a ROAS of 4 — often written 4× or 400%.
What is break-even ROAS?
The ROAS at which ad-driven sales exactly cover the ad cost, given your profit margin. Break-even ROAS = 1 ÷ margin. With a 40% margin you break even at 2.5×; anything above is profit.
What is a good ROAS?
Any ROAS above your break-even ROAS is profitable. A 3× ROAS is excellent for a business with a 50% margin (break-even 2×) but loses money at a 25% margin (break-even 4×).
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only. ROI compares profit to all costs — product, shipping, fees and ads. ROAS is quicker to read inside ad platforms; ROI tells you whether the business made money.