How do you calculate ROAS?

ROAS = revenue from ads ÷ ad spend. If you spend $5,000 on a campaign that drives $20,000 in revenue, your ROAS is 4.0x, meaning every advertising dollar returned four dollars of revenue.

What is break-even ROAS?

Break-even ROAS is the return at which a campaign stops losing money, calculated as 1 ÷ gross margin. At a 50% gross margin the break-even ROAS is 2.0x; at a 25% margin it rises to 4.0x.

Most e-commerce advertisers target a ROAS between 3x and 5x, but a good ROAS depends on your break-even point. High-margin or high-lifetime-value businesses can run profitably below 2x, while thin-margin retailers may need more than 5x.

What is the difference between ROAS and ROI?

ROAS compares revenue to ad spend alone, while ROI compares profit to total costs including product and overhead. ROAS is the faster signal for comparing campaigns; ROI determines whether the business makes money overall.

Free tool

The ROAS calculator that knows your margin.

Return on ad spend means nothing without break-even context. Enter spend, revenue, and gross margin — see your ROAS, the ROAS you actually need, and whether the campaign made money.

Ad spend

Total cost of the campaign

Revenue from ads

Revenue those ads drove

Gross margin %

Used for break-even ROAS

Your ROAS: —; Enter spend and revenue
Break-even ROAS: 2.00x; Required at 50% margin
Profit after ad spend: —; Gross profit minus spend

Formulas: ROAS = revenue ÷ spend. Break-even ROAS = 1 ÷ gross margin. Profit = revenue × margin − spend. All math runs in your browser — nothing is stored or sent anywhere.

The numbers

What your ROAS is actually telling you.

What is ROAS?

ROAS (return on ad spend) measures the revenue your advertising generates for every dollar it costs: revenue from ads ÷ ad spend. Spend $5,000 to drive $20,000 and your ROAS is 4.0x — every ad dollar returned four dollars of revenue.

Why break-even ROAS matters more

Revenue is not profit. Break-even ROAS — 1 ÷ gross margin — is the return where a campaign stops losing money. At a 50% margin you need 2.0x just to break even; at a 25% margin you need 4.0x, and that “strong” 4x campaign was treading water. This is why the calculator asks for your margin.

What is a good ROAS?

Most e-commerce teams target 3x–5x, but “good” is relative to your break-even point and growth goals. A subscription business with strong lifetime value can run profitably below 2x; a thin-margin retailer may need 5x+. Compare against your own break-even number first, category averages second.

ROAS vs ROI

ROAS compares revenue to ad spend alone; ROI compares profit to total cost including product and overhead. ROAS is the faster in-platform signal for comparing campaigns — the profit figure above bridges the two by applying your gross margin.

Adscriptly Signals

Your real ROAS depends on conversion data.

If Google Ads counts unqualified leads as conversions, every ROAS number lies. Adscriptly sends qualified outcomes — scored leads, real calls, closed deals — back to Google Ads so bidding optimizes toward profit.

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