# 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).

- Interactive version: https://infikeytechnologies.com/tools/roas-calculator
- Type: free instant calculator
- Category: Marketing
- Last reviewed: 2026-10-05
- Publisher: Infikey Technologies (https://infikeytechnologies.com)

## Example result (default inputs)

| Input | Value |
| --- | --- |
| 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.

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

| Metric | Value |
| --- | --- |
| 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 vs break-even and target

| Item | Value | Detail |
| --- | --- | --- |
| Your ROAS (selected) | 4x |  |
| Break-even ROAS | 2.5x |  |
| Target ROAS | 3.33x |  |

- ROAS uses revenue, not profit. Check returns, refunds and repeat purchases before deciding a campaign is unprofitable.

Open this result on the website: https://infikeytechnologies.com/tools/roas-calculator?currency=USD&spend=5000&revenue=20000&margin=40&fees=0&target_profit=10

## Use from a link or API

Add these query parameters to https://infikeytechnologies.com/tools/roas-calculator (pre-filled page), https://infikeytechnologies.com/tools/roas-calculator.md (this plain-text page) or https://infikeytechnologies.com/api/tools/roas-calculator (JSON).

| Parameter | Meaning | Accepted 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 |

- E-commerce, 40% margin: https://infikeytechnologies.com/tools/roas-calculator?currency=USD&spend=5000&revenue=18000&margin=40&fees=500&target_profit=10
- Low-margin reseller: https://infikeytechnologies.com/tools/roas-calculator?currency=USD&spend=10000&revenue=30000&margin=22&fees=0&target_profit=5
- SaaS, 80% margin: https://infikeytechnologies.com/tools/roas-calculator?currency=USD&spend=8000&revenue=16000&margin=80&fees=1000&target_profit=30

## How it is calculated

- **ROAS**: revenue from ads ÷ ad spend
- **Break-even ROAS**: 1 ÷ gross margin
- **Target ROAS**: 1 ÷ (gross margin − target profit margin)
- **ACoS**: ad spend ÷ revenue from ads (= 1 ÷ ROAS)

## 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 margin | Break-even ROAS | ROAS 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.

## FAQ

### 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.

## Get expert help

Send these results to an Infikey Technologies specialist from the form on https://infikeytechnologies.com/tools/roas-calculator#estimate or via https://infikeytechnologies.com/contact.

More free calculators: https://infikeytechnologies.com/tools.md

## 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.