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ROAS Calculator

Return on ad spend and the break-even ROAS your gross margin actually requires.

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Last reviewed 2026-08-30

About the ROAS Calculator

Calculates Return on Ad Spend (ROAS) — revenue generated per dollar of ad spend — and the break-even ROAS your specific gross margin requires, since ROAS alone ignores cost of goods sold and can look healthy while actually losing money.

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How to use it
  1. Enter your ad spend and the revenue generated from those ads.
  2. Enter your gross margin % (revenue minus cost of goods sold).
  3. Read your ROAS, break-even ROAS, and whether you're actually profitable after ad spend.
Formula
ROAS = revenue ÷ ad spend. Gross profit = revenue × gross margin %. Break-even ROAS = 1 ÷ gross margin % — the minimum ROAS at which ad spend is fully offset by gross profit. Net profit after ads = gross profit − ad spend.
Worked example

$5,000 ad spend generating $20,000 in revenue at a 50% gross margin: a 4x ROAS, against a break-even ROAS of 2x — $10,000 gross profit against $5,000 spend, for a $5,000 net profit after ads.

Interpreting your result

ROAS by itself doesn't account for the cost of goods sold — a 4x ROAS looks strong, but at a 20% gross margin the true break-even ROAS is 5x. 'Good' ROAS benchmarks vary enormously by industry, platform, and business model.

Recommendations
  • Always check ROAS against your break-even ROAS (1 ÷ gross margin), not a generic benchmark.
  • A low-margin business needs a much higher ROAS to be profitable than a high-margin one.
  • This is a simple ratio calculator — it doesn't include fixed costs, shipping, returns, or lifetime value beyond the first purchase.
Frequently asked questions
There's no single universal number — a better benchmark is your own break-even ROAS (1 ÷ gross margin %).
See the full methodology and sources for every finance calculator
Disclaimer

Illustrative estimate only, not financial or tax advice. Verify figures with a licensed adviser or your local tax authority.