Marketing · Free tool

ROAS calculator: return on ad spend, break-even ROAS and target ROAS

ROAS (return on ad spend) is revenue from ads divided by ad spend: $20,000 of revenue from $5,000 of ads is a 4x ROAS. Whether that is profitable depends on margin. Break-even ROAS is 1 ÷ gross margin — at a 40% margin you need 2.5x just to cover ad spend. To earn a target profit, aim for 1 ÷ (margin − target profit margin).

Free, no sign-up · By Infikey Technologies · Updated

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Result

Return on ad spend (ROAS)

4x

$20,000 revenue from $5,000 ad spend is a 4x ROAS; break-even at a 40% margin is 2.5x.

On target: 4x ROAS beats the 3.33x needed for a 10% profit margin. Test scaling the budget gradually.

ROAS vs break-even and target
  • Your ROAS 4x
  • Break-even ROAS 2.5x
  • Target ROAS 3.33x
ROAS & break-even ROAS calculator results
Break-even ROAS (ad spend only) 2.5x
Break-even ROAS incl. fees 2.5x
Target ROAS for 10% profit 3.33x
Gross profit from ads $8,000
Net profit after ad spend and fees $3,000
Advertising cost of sales (ACoS) 25%
  • ROAS uses revenue, not profit. Check returns, refunds and repeat purchases before deciding a campaign is unprofitable.

Estimates for planning only, not professional advice. Infikey Technologies accepts no liability for decisions based on these results — read the disclaimer.

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How this calculator works

MetricFormula
ROASrevenue from ads ÷ ad spend
Break-even ROAS1 ÷ gross margin
Target ROAS1 ÷ (gross margin − target profit margin)
ACoSad spend ÷ revenue from ads (= 1 ÷ ROAS)

Worked example

With these inputs:

  • Currency: USD ($)
  • Ad spend: 5,000
  • Revenue from ads: 20,000
  • Gross margin: 40%
  • Agency, tool & creative fees: 0
  • Target net profit margin: 10%

Return on ad spend (ROAS): 4x. $20,000 revenue from $5,000 ad spend is a 4x ROAS; break-even at a 40% margin is 2.5x.

Break-even ROAS (ad spend only)2.5x
Break-even ROAS incl. fees2.5x
Target ROAS for 10% profit3.33x
Gross profit from ads$8,000
Net profit after ad spend and fees$3,000
Advertising cost of sales (ACoS)25%

Open this example in the calculator

Break-even ROAS by gross margin

Low-margin products need a much higher ROAS to be profitable, which is why a “good” ROAS differs so much between businesses.

Gross marginBreak-even ROASROAS for 10% profit
20% 5x 10x
30% 3.33x 5x
40% 2.5x 3.33x
50% 2x 2.5x
60% 1.67x 2x
70% 1.43x 1.67x
80% 1.25x 1.43x

What is a good ROAS?

There is no universal good ROAS. A 3x ROAS is very profitable for software with an 80% margin and loss-making for a reseller with a 25% margin.

Also consider customer lifetime value: if customers buy again, a first-order ROAS below break-even can still be profitable over time. The customer lifetime value calculator helps here.

How to improve ROAS

  • Raise conversion rate with faster, clearer landing pages.
  • Increase average order value with bundles and upsells.
  • Move budget from broad campaigns to high-intent keywords and audiences.
  • Exclude poor-performing placements, search terms and regions.
  • Send real sales and margin data back to the ad platform so bidding optimises for profit.

Every option can be set in the web address, so you can bookmark a scenario or send it to a colleague. AI assistants such as ChatGPT, Gemini, Claude and Perplexity can use the same parameters to open this calculator with your numbers and the result already on the page.

ParameterWhat it setsAccepted values
currency Currency one of USD, INR, AED, GBP, EUR
spend Ad spend number from 0 to 1000000000 (in the chosen currency), default 5000
revenue Revenue from ads number from 0 to 10000000000 (in the chosen currency), default 20000
margin Gross margin number from 1 to 100 (%), default 40
fees Agency, tool & creative fees number from 0 to 100000000 (in the chosen currency), default 0
target_profit Target net profit margin number from 0 to 99 (%), default 10

Example: https://infikeytechnologies.com/tools/roas-calculator?currency=USD&spend=5000&revenue=18000&margin=40&fees=500&target_profit=10

Also available as plain text for AI assistants and a free JSON API (OpenAPI spec).

Last reviewed by the Infikey Technologies team.

Disclaimer

This calculator is provided free for general information and planning only. Results are estimates based on the inputs you enter and the assumptions described on this page, reference data such as published prices may change, and actual costs and outcomes will differ. Nothing on this page is financial, legal, tax, investment or other professional advice. Infikey Technologies Private Limited, Infikey Technologies LLC and their directors, employees and affiliates make no warranty, express or implied, about the accuracy, completeness or suitability of this tool or its results, and accept no liability for any loss or damage, direct or indirect, arising from its use or from reliance on its results. Verify all figures independently and seek professional advice before making any decision. Use of this tool is at your own risk.

FAQ

ROAS & break-even ROAS calculator questions

How do you calculate ROAS? +

Divide the revenue generated by ads by the amount spent on those ads. $20,000 revenue from $5,000 spend is a ROAS of 4, often written 4x or 400%.

What is break-even ROAS? +

The ROAS at which gross profit exactly covers ad spend: 1 ÷ gross margin. With a 40% margin, break-even ROAS is 2.5x.

What is the difference between ROAS and ROI? +

ROAS compares revenue with ad spend only. ROI compares profit with total investment, including product costs, fees and other expenses.

What is ACoS? +

Advertising cost of sales, used on Amazon: ad spend ÷ ad revenue. It is the inverse of ROAS, so a 25% ACoS equals a 4x ROAS.

Is a 2x ROAS good? +

Only if your gross margin is above 50%. Below that, a 2x ROAS loses money on ad spend alone.

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