ROAS Calculator

Return on ad spend, plus the break-even number your gross margin actually demands.

Revenue from ads ($)

Ad spend ($)

Gross margin (%)

Other variable costs ($)

Result

ROAS is not profit

ROAS compares revenue to ad spend, and it says nothing about what the product costs you. A 4x ROAS sounds excellent until you learn the gross margin is 20%: on $4 of revenue you keep $0.80, and you spent $1 to get it. You are losing money on every sale.

The break-even formula

Break-even ROAS = 1 ÷ gross margin. At a 40% margin the break-even ROAS is 2.5x; at 20% it is 5x; at 70% (typical software) it is 1.43x. Anything above that line is profitable before fixed costs, anything below is not. This single number should decide how hard you are willing to bid.

ACoS: the same idea inverted

Amazon sellers usually talk about ACoS — ad spend ÷ revenue — which is simply 1 ÷ ROAS expressed as a percentage. A 25% ACoS equals a 4x ROAS. Compare ACoS against your margin: if ACoS exceeds margin, the campaign loses money on each unit sold.

What a "good" ROAS looks like

Ecommerce, 30-40% margin — 3x to 4x is workable; below 3x usually is not.
High-margin DTC brands — 2x can be fine if repeat purchase is strong.
SaaS and subscriptions — judge on payback period and LTV:CAC instead, because revenue arrives over years.

Common traps

Platform-reported ROAS uses each network's own attribution window, so Meta and Google will both claim the same sale. Compare blended ROAS — total revenue over total spend across all channels — before deciding a channel is a winner. Also check whether new-customer revenue is a decent share; a campaign that mostly reacquires existing customers inflates ROAS without growing the business.