Enter your ad revenue and spend to see your ROAS. Add your profit margin to find the break-even ROAS and whether your ads make money.
Results are estimates for planning. Check the figures before you make a financial or health decision.
How to calculate ROAS
Divide the revenue from ads by the ad spend:
ROAS = revenue from ads รท ad spend
A ROAS of 4x means every 1 spent returned 4 in revenue. Some people show it as a percentage, so 4x is 400 per cent. To find your break-even ROAS, divide 100 by your gross margin percentage. With a 35 per cent margin the break-even is about 2.86x, so anything above that makes a profit before other costs.
Worked example
Using the default values in the calculator above:
| Input | Value |
|---|---|
| Revenue from ads | 15,000 |
| Ad spend | 4,000 |
| Gross profit margin, optional | 35 % |
| Result | Value |
|---|---|
| Return on ad spend | 3.75x |
| ROAS as a percentage | 375% |
| Revenue per 1 spent | 3.75 |
| Revenue minus ad spend | 11,000 |
| Break-even ROAS | 2.86x |
| Profit after ad spend | 1,250 |
| Verdict | Above break-even, the ads are profitable |
What is a good ROAS?
A common rule of thumb is 4x, but the right figure depends on your margin. A business with a 60 per cent margin breaks even at 1.67x, while one with a 20 per cent margin needs 5x. Use the break-even ROAS above as your floor and aim comfortably higher.
Tips and common mistakes
ROAS is not profit. It ignores product costs, fees, shipping and staff time. Always check it against your margin.
Platform-reported revenue can overlap between channels. If ROAS looks too good, compare it with total revenue.
Do not judge too fast. Campaigns often need a learning period, and some customers buy days after clicking.
Frequently asked questions
What does ROAS stand for?
Return on ad spend: the revenue earned for each unit of currency spent on advertising.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend only. ROI compares profit with total cost, so it also reflects product costs and other expenses.
How do I calculate break-even ROAS?
Divide 100 by your gross profit margin as a percentage. A 25 per cent margin gives a break-even ROAS of 4x.
Can ROAS be too high?
A very high ROAS can mean you are spending too little and missing growth. Raising spend may lower ROAS while still increasing total profit.