Free ROAS & Break-Even Calculator

This free ROAS calculator shows whether your ads make money. Enter your ad spend, the revenue from those ads, the number of sales and your gross margin to see your return on ad spend (ROAS), the break-even ROAS for your margins, the gross profit left after ads, your cost per sale and, if you add clicks, your cost per click and conversion rate. Change any number and the results update at once.

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What ROAS means

Return on ad spend (ROAS) is the revenue your ads bring in divided by what they cost. If you spend $1,000 and the ads bring in $4,000 in sales, your ROAS is 4, often written as 4x or 400%.

ROAS on its own does not tell you whether you made money, because revenue is not profit. A 4x ROAS is excellent for a business with 60% margins and a loss for one with 20% margins. That is why this calculator also works out your break-even ROAS.

The formulas

  • ROAS = revenue from ads ÷ ad spend.
  • Break-even ROAS = 1 ÷ gross margin. With a 40% margin, break-even ROAS is 1 ÷ 0.4 = 2.5x.
  • Gross profit after ads = revenue × gross margin − ad spend.
  • Cost per sale = ad spend ÷ number of sales.
  • Highest cost per sale you can afford = average order value × gross margin.
  • Cost per click = ad spend ÷ clicks, and conversion rate = sales ÷ clicks.

How to use the ROAS calculator

1Enter yourtotal ad spendfor the…2Enter therevenue yourads produced3Enter thenumber ofsales or leads4Enter yourgross margin5Optionally
  1. Enter your total ad spend for the period. Include agency or management fees if you want true profit.
  2. Enter the revenue your ads produced, from your ad platform or your shop’s reports.
  3. Enter the number of sales or leads.
  4. Enter your gross margin: the share of each dollar of revenue left after product and delivery costs.
  5. Optionally, enter clicks to see cost per click and conversion rate.
  6. Read the result: green means you are above break-even, red means the ads lose money at these numbers.

Worked example

An online jewelry shop spends $1,500 a month on shopping ads, which bring in $5,200 from 40 orders. Its gross margin is 45%.

ROAS is 5,200 ÷ 1,500 = 3.47x. Break-even ROAS is 1 ÷ 0.45 = 2.22x, so the ads are profitable. Gross profit after ads is 5,200 × 0.45 − 1,500 = $840. Cost per sale is $37.50, while the most the shop could pay per sale and still break even is $130 × 0.45 = $58.50. The owner decides to raise the budget on the best-selling products while keeping ROAS above 3x.

Best practices

  • Use your real gross margin, not your markup. Margin is profit ÷ price; markup is profit ÷ cost.
  • Measure over a full sales cycle. A week of data can swing widely.
  • Set a target ROAS a little above break-even, to cover returns, payment fees and other costs.
  • Look at ROAS by campaign and product, not only the account total.
  • Consider customer lifetime value. If customers buy again, a lower first-order ROAS can still be worth it.

Common mistakes

  • Comparing ROAS between businesses with different margins.
  • Counting revenue that would have happened anyway, such as people searching for your brand name.
  • Forgetting refunds, discounts and shipping costs.
  • Judging lead generation campaigns by ROAS when revenue arrives weeks later. Track cost per lead and close rate instead.

Tips for local businesses

Service businesses often sell through phone calls and quotes rather than online checkouts. Track calls and form leads as conversions, record how many become customers and their average value, and enter those numbers here. That turns “clicks and calls” into a clear answer: are the ads paying for themselves?

Google explains how return-on-ad-spend bidding works in About Target ROAS bidding.

ROAS calculator: frequently asked questions

What is a good ROAS?

Any ROAS above your break-even ROAS is profitable. Many online stores aim for 3x–5x, but the right target depends on your margins and repeat purchases.

Is ROAS the same as ROI?

No. ROAS compares revenue with ad spend. ROI compares profit with total investment. The calculator shows both views by including your margin.

How do I find my gross margin?

Take the selling price, subtract what the product and its delivery cost you, and divide by the selling price. Your accountant or shop reports can give an average.

Should I include agency fees in ad spend?

For true profit, yes. For comparing campaigns with each other, use ad spend only.

Are these numbers guaranteed?

No. The calculator does the math on the numbers you enter. Results depend on tracking accuracy and real costs.

Want ads that are tracked, tested and improved every month? See SEMRS Paid Ads & Lead Generation →