ROAS calculator

ROAS is revenue divided by ad spend. Whether a ROAS is profitable depends on your margin: break-even ROAS is 1 ÷ gross margin, and the most a conversion can cost is average order value × gross margin. Enter your own numbers below.

Same currency and period as the spend.

Revenue minus cost of goods, as a % of revenue.

ROAS

4x

400% return on ad spend

Break-even ROAS

2.5x

Your ROAS covers the ad spend from gross profit.

Target CPA (break-even)

32

Most one conversion can cost

Current CPA

20

Ad spend ÷ conversions

Gross profit after ad spend

1,200

How it's calculated

ROAS = revenue ÷ ad spend

Break-even ROAS = 1 ÷ gross margin

Average order value = revenue ÷ conversions

Target CPA (break-even) = average order value × gross margin

Gross profit after ad spend = revenue × gross margin − ad spend

Worked example

These are illustrative inputs, the same ones the calculator starts with, not a benchmark. Say a campaign spent 2,000, brought in 8,000 in revenue from 100 orders, and the products sell at a 40% gross margin.

  • ROAS = 8,000 ÷ 2,000 = 4 (4:1, or 400%).
  • Break-even ROAS = 1 ÷ 0.40 = 2.5. A ROAS of 4 clears it.
  • Average order value = 8,000 ÷ 100 = 80, so the break-even CPA is 80 × 0.40 = 32. The actual CPA is 2,000 ÷ 100 = 20.
  • Gross profit after ad spend = 8,000 × 0.40 − 2,000 = 1,200.

Gross margin here means revenue minus the cost of the goods sold. Shipping, payment fees, returns and overheads are not in it, so a campaign that only just clears break-even ROAS can still lose money overall. Set your target CPA below the break-even CPA by the profit you want to keep per order.

FAQ

ROAS questions, answered.

Return on ad spend (ROAS) is the revenue your ads produced divided by what you spent on them. Spending 1,000 to produce 4,000 in revenue is a ROAS of 4, often written 4:1 or 400%.

Break-even ROAS is 1 divided by your gross margin. At that ROAS the gross profit from the sales covers the ad spend exactly. With a 40% margin it is 1 ÷ 0.40 = 2.5; anything below 2.5 loses money on each sale before other costs.

There is no universal number. A ROAS is good when it is above your own break-even ROAS by enough to cover the costs margin does not include. Two businesses with the same ROAS can be in opposite positions if their margins differ.

Multiply your average order value by your gross margin. That is the break-even CPA: the most one conversion can cost before it loses money. Set the target CPA below it by the profit you want to keep per order.

Platform-reported conversion value depends on each platform's attribution settings, and two platforms can claim the same sale. Use the revenue source you trust most and the same one every time you compare periods.

Rather not type the numbers in?

Adstudio connects Google Ads, Meta, TikTok and your other ad accounts and works these figures out from live data, across every platform at once. Ask in plain language and the assistant answers from your own accounts.

Try Adstudio