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ROAS Calculator

Return on ad spend (ROAS) is the revenue earned for every dollar spent on advertising. Enter ad revenue and ad spend to get ROAS, then add your gross margin to see the break-even ROAS and whether the campaign made a profit after product costs.

Quick examples
$
$
%

Share of revenue left after product and fulfillment costs.

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ROAS4 ×
ROAS as a percentage
400%
Ad cost of sales (ACoS)
25%
Break-even ROAS
2 ×
Profit after ad spend
$1,000.00

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      Formula

      ROAS = revenue from ads ÷ ad spend
      Break-even ROAS = 1 ÷ gross margin (as a decimal)
      Profit after ad spend = revenue × gross margin − ad spend
      ACoS % = ad spend ÷ revenue × 100

      How to use it

      1. Enter the revenue attributed to the ads.
      2. Enter what the ads cost over the same period.
      3. Enter your gross margin on the products sold.
      4. Compare your ROAS with the break-even ROAS: above it you are making money, below it you are not.

      Worked examples

      $4,000 of sales from $1,000 of ads at a 50% gross margin

      ROAS
      4 ×
      ROAS as a percentage
      400%
      Ad cost of sales (ACoS)
      25%
      Break-even ROAS
      2 ×
      Profit after ad spend
      $1,000.00

      $6,000 of sales from $2,500 of ads at a 30% gross margin

      ROAS
      2.4 ×
      Break-even ROAS
      3.33 ×
      Profit after ad spend
      -$700.00

      A high ROAS is not the same as profit

      ROAS looks only at revenue. A 4× ROAS sounds strong, but if your gross margin is 20% the $4 of sales yields only $0.80 of gross profit for each $1 of ads — a loss.

      Break-even ROAS is 1 divided by your margin: 2× at a 50% margin, 2.5× at 40%, 3.33× at 30%, 4× at 25%, 5× at 20%. Aim comfortably above it, because ROAS also has to pay for overheads.

      ROAS, ROI and ACoS

      ROAS is revenue ÷ spend. ACoS (advertising cost of sales, used by Amazon) is the same ratio upside down: spend ÷ revenue. A 4× ROAS is a 25% ACoS.

      ROI measures profit rather than revenue: (profit − spend) ÷ spend. The same campaign can show a 400% ROAS and a 100% ROI.

      Questions people ask

      What is a good ROAS?

      It depends on your margin. A common rule of thumb is 4× (four dollars of revenue per ad dollar), but a business with 30% margins loses money below 3.33× while one with 80% margins is profitable above 1.25×.

      How do I calculate ROAS?

      Divide revenue from ads by ad spend. $4,000 of sales from $1,000 of ads is a ROAS of 4, often written 4:1, 4× or 400%.

      What is break-even ROAS?

      The ROAS at which gross profit from the sales exactly equals the ad spend. It is 1 ÷ gross margin: at a 50% margin, break-even ROAS is 2.

      Related calculators

      ROI CalculatorReturn on investment as a percentage, a dollar gain and a yearly rate.CPC CalculatorCost per click, plus CTR, CPM and cost per conversion.CPM CalculatorCost per 1,000 impressions — or the cost or reach it buys.Conversion Rate CalculatorShare of visitors who convert, with revenue per visitor.CAC CalculatorCost to acquire one customer, and how long it takes to earn back.Profit Margin CalculatorMargin, markup and profit from cost and price — or solve for either.