ROAS Calculator
ROAS = revenue from ads ÷ ad spend. $45,000 in revenue on $10,000 of spend is a 4.5 ROAS (450%). Check it against your margin below.
Google Ads: Cost · Meta: Amount spent
Google Ads: Conv. value · Meta: Purchase value
Gross margin after product cost. Use contribution margin if you know it.
ROAS = $45,000 ÷ $10,000 = 4.50 · break-even = 1 ÷ 40% = 2.50
Comfortably above break-even. Push budget.
Next: set a target with a profit cushion → Break-even ROAS calculator
Your ROAS is 4.50x against a 2.50x break-even. Find out where the next dollar should go: free 47-point ad audit, five business days, no sales call.
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Express it as a ratio (4.0) or a percentage (400%). They mean the same thing: $4 of revenue for every $1 spent. Use the revenue your ad platform attributes to the ads, over the same date range as the spend.
| Step | Example | Where to find it |
|---|---|---|
| Ad spend | $1,800 | Google Ads: Cost · Meta: Amount spent |
| Revenue from those ads | $7,200 | Google Ads: Conv. value · Meta: Purchases conversion value |
| ROAS | 7,200 ÷ 1,800 = 4.0 (400%) | Google Ads: Conv. value / cost |
| Profit at a 25% margin | 7,200 × 0.25 − 1,800 = $0 | Exactly break-even: at a 25% margin, 4.0 is the floor |
That last row is the point of the example. A 4.0 ROAS sounds healthy, but at a 25% margin every dollar of revenue leaves 25 cents to pay for the ads, so $7,200 of revenue covers exactly $1,800 of spend and nothing more.
How to read your number
Break-even ROAS = 1 ÷ margin. At a 40% margin you need 2.5x just to cover ad spend. Everything above that is profit, and everything below it loses money.
The common mistake is chasing an “industry average” ROAS. A 3x ROAS at a 25% margin loses money. The same 3x at a 60% margin is very profitable. Set your target from your own margin, then leave a cushion for returns and fees. For what counts as a good ROAS in practice, the answer always starts from that margin.
The calculator marks a result “Scale up” only when ROAS is at least 1.3 times break-even. Between break-even and that line the account is profitable but thin, and fixing waste usually pays more than adding budget. Finding that waste is the first job iClick does as an ecommerce paid search agency.
ROAS vs break-even ROAS, POAS and MER
ROAS tells you what a campaign returned. The other three tell you whether that return was enough, and where to look when it was not.
| Metric | Formula | Use it to |
|---|---|---|
| ROAS | revenue ÷ ad spend | Compare campaigns and set Target ROAS bids |
| Break-even ROAS | 1 ÷ margin | Know the floor below which ads lose money |
| POAS | gross profit ÷ ad spend | Bid on profit when margins differ by product |
| MER | total revenue ÷ total marketing spend | Judge all channels together, without attribution |
Break-even ROAS turns your margin into a floor; the break-even ROAS calculator adds a profit cushion and a maximum CPA on top of it. POAS swaps revenue for gross profit, which matters when one account sells products with very different margins. MER steps back from platform attribution entirely and divides all revenue by all marketing spend, which makes it the check on whether the ROAS your ad platforms report adds up.
ROAS questions
How do you calculate ROAS?
Divide the revenue your ads generated by what you spent on them. $5,000 in revenue from $1,000 of spend is a 5.0 ROAS, or 500%.
Is ROAS a ratio or a percentage?
Both are used for the same number: 4.0 and 400% both mean $4 of revenue for every $1 of spend. Google Ads' Target ROAS setting uses the percentage.
Why can a high ROAS still lose money?
ROAS ignores costs. A 3.0 ROAS on a product with a 25% margin returns $0.75 of profit per $1 spent, which is a loss. Compare ROAS with your break-even ROAS, which is 1 divided by your margin.
What's the difference between ROAS and ROI?
ROAS counts revenue per ad dollar. ROI counts profit after all costs, divided by those costs. A campaign can show a strong ROAS and a negative ROI once product, shipping and fees are taken out.
Built by the iClick team · Reviewed by Maria Shalini, Senior Marketing Strategist · Updated
