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ROAS and Ad ROI Calculator

Enter what you spent on ads, the revenue they generated and your gross margin. A ROAS above break-even means the ads are profitable.

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ROAS

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Break-even ROAS
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ROI on ad spend (profit-based)
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Profit after ad spend
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Tips for using the roas calculator

  • Set campaign ROAS targets above break-even to leave room for overhead.
  • Include agency fees and creative costs in ad spend for a true picture.
  • Compare with customer lifetime value when buyers return often.

How the roas calculator works

ROAS shows how much revenue each ad dollar brings in. Because revenue is not profit, compare it with your break-even ROAS, which depends on your margin.

ROAS = Revenue ÷ Ad spend
Break-even ROAS = 1 ÷ Gross margin
ROI = (Revenue × Gross margin − Ad spend) ÷ Ad spend

At a 40% margin you need $2.50 of revenue per ad dollar just to cover the cost of the goods and the ads. Attribution matters: platform-reported revenue often credits ads for sales that would have happened anyway, so incrementality tests or blended ROAS (total revenue ÷ total ad spend) give a more conservative view. Repeat purchases can justify a ROAS below break-even on the first order.

Worked example

Spending $5,000 on ads that drive $20,000 in sales is a 4.0× ROAS. With a 40% gross margin, those sales produce $8,000 of gross profit, leaving $3,000 after ad costs: a 60% ROI. The break-even ROAS is 2.5×.

Frequently asked questions

What is a good ROAS?

Anything above your break-even ROAS is profitable on the first order. Many e-commerce brands target 3× to 4×.

How do I calculate break-even ROAS?

Divide 1 by your gross margin. A 25% margin needs 4× ROAS.

What is the difference between ROAS and ROI?

ROAS uses revenue; ROI uses profit. A 2× ROAS can still lose money.

Why does my platform ROAS differ from my store data?

Platforms use their own attribution windows and may count view-through or modelled conversions.

Updated October 2026. Results are estimates for education, not financial or medical advice. All math runs in your browser; nothing you type is sent anywhere.

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