ROAS Calculator
Enter your ad spend and the revenue it produced. Get your ROAS, your profit on ad spend, and the break-even point your margin actually demands.
Your numbers
$40,000 of revenue on $10,000 of ad spend
At a 40% gross margin you break even at 2.50×. You are above it, so this spend is genuinely profitable.
The arithmetic
ROAS = revenue ÷ ad spendprofit on ad spend = (revenue × gross margin) ÷ ad spendbreak-even ROAS = 1 ÷ gross marginEvery figure above comes from an input you set. There are no industry averages baked in, because an average you cannot check is worse than no number at all.
ROAS is a revenue number pretending to be a profit number
Return on ad spend is the most quoted figure in paid media and the most misleading, because it stops one step short of the answer. It tells you how much revenue arrived per dollar spent. It does not tell you whether any of that revenue was worth having.
The missing step is gross margin. Revenue you collect and profit you keep are different quantities, and ads are paid for out of the second one. This is why the calculator above asks for margin and shows profit on ad spend beside the headline: the two numbers frequently point in opposite directions.
Your break-even ROAS is set by your margin, not your industry
Break-even ROAS is one divided by your gross margin. It is worth committing to memory because it converts a vague target into a floor:
- 70% margin — break even at 1.43×
- 50% margin — break even at 2.0×
- 40% margin — break even at 2.5×
- 25% margin — break even at 4.0×
- 15% margin — break even at 6.7×
A 4× ROAS is excellent for the first business and a loss for the last. Benchmarks published without a margin attached cannot tell you which one you are.
What to do with the number
If you are above break-even, the gap is your headroom to bid more aggressively and buy more volume at lower efficiency — which is usually the right trade, because profit is measured in dollars rather than multiples. If you are below it, no amount of extra spend fixes the problem; the margin, the average order value or the conversion rate has to move first.
For the organic side of the same question, the SEO ROI calculator runs the equivalent arithmetic on search, where the cost is a fixed monthly fee rather than a variable bid.