Marketing & sales

ROAS Calculator

ROAS (return on ad spend) tells you how much revenue each dollar of advertising brings back. Enter the revenue a campaign generated and what you spent on it, add your gross margin, and this free calculator returns your ROAS, your actual profit after ads, and the break-even ROAS you need just to stop losing money.

Revenue from the campaign$Ad spend$Gross margin on that revenue%

ROAS—

ROAS as a percentage—

Profit after COGS & ad spend—

Break-even ROAS—

Estimates only — adjust the inputs to match your situation. Everything runs in your browser; nothing is stored or sent anywhere.

🤖 Tool built by ifolabs AI — one of a growing library of free tools our automation engine ships. Want a custom one for your business? Tell us.

What is ROAS?

ROAS, or return on ad spend, is the revenue an advertising campaign generates divided by its cost. A ROAS of 4:1 (often written just as 4) means every $1 spent on ads produced $4 in revenue. It is the single most quoted number in paid marketing because it ties spend directly to results.

One catch: ROAS is measured on revenue, not profit. A 4:1 ROAS can still lose money if your margins are thin — which is why this calculator also shows profit and break-even ROAS.

ROAS formula

ROAS = revenue from ads ÷ ad spend

Expressed as a percentage, multiply by 100: a 4:1 ROAS is 400%.

Break-even ROAS = 1 ÷ gross margin = 100 ÷ margin%

If your gross margin is 50%, your break-even ROAS is 2:1 — you need $2 of revenue per $1 of ad spend just to cover the product cost and the ad cost. Anything above that is profit; anything below is a loss.

ROAS vs ROI — not the same

ROAS measures revenue against ad spend only. ROI (return on investment) measures profit against the total cost, including the cost of goods. A campaign can have a strong ROAS and a negative ROI at the same time. Use ROAS to compare campaigns and channels quickly; use profit and ROI to decide whether the spend is actually worth it.

A worked example

A store spends $2,000 on ads and generates $8,000 in sales at a 50% gross margin.

ROAS: $8,000 ÷ $2,000 = 4:1
Gross profit on the revenue: $8,000 × 50% = $4,000
Profit after ad spend: $4,000 − $2,000 = $2,000
Break-even ROAS: 1 ÷ 0.50 = 2:1

So 4:1 is comfortably above the 2:1 break-even — the campaign is genuinely profitable.

What is a good ROAS?

A common benchmark is 4:1, but the only ROAS that matters is the one above your break-even. With an 80% margin, even a 2:1 ROAS is highly profitable; with a 20% margin you need better than 5:1 just to break even. Always compare your ROAS to your own break-even point — not to a generic target — and remember that customer lifetime value can justify a lower ROAS on the first sale.

Frequently asked questions

Is the ROAS calculator free?

Yes, completely free with no sign-up. It runs in your browser and stores nothing.

How is ROAS calculated?

Divide the revenue a campaign generated by the amount you spent on ads. $8,000 revenue from $2,000 spend is a 4:1 ROAS (or 400%).

What is a break-even ROAS?

The ROAS at which a campaign neither makes nor loses money. It equals 1 divided by your gross margin. At a 50% margin the break-even ROAS is 2:1; at 25% it is 4:1.

Why can a high ROAS still lose money?

Because ROAS is based on revenue, not profit. If your margin is below your break-even point, the revenue does not cover both the cost of goods and the ad spend, so you lose money despite a healthy-looking ROAS.

What is the difference between ROAS and ROI?

ROAS compares revenue to ad spend only. ROI compares profit to total cost. A campaign can have good ROAS and poor ROI if the product margin is thin.

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