ROAS Calculator & Break-even ROAS Calculator
Work out your return on ad spend, the ROAS you actually need to break even, and the most you can pay for a customer.
This free ROAS calculator does two jobs. It gives you the return on ad spend for a campaign — revenue divided by ad spend — and it works out the break-even ROAS your cost structure demands, which is the number most advertisers never calculate. A 3x return looks healthy until cost of goods, shipping and payment fees mean you needed 3.4x to stop losing money.
Enter revenue and ad spend for an instant ROAS. Add your product price and variable costs and you also get contribution margin, profit, maximum CAC, maximum allowable ad spend and break-even revenue. It's built for performance marketers, ecommerce operators and agency teams setting bid targets, and every calculation runs in your browser.
Your numbers
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Enter revenue and ad spend for instant ROAS — add your cost structure to unlock break-even ROAS, margins, and max CAC.
Need more than a free tool? Ask Kestry Chat Agent about your campaign strategy, marketing questions and customer workflows.
What is ROAS?
ROAS — return on ad spend — measures how much revenue an advertising campaign produced for every unit of currency spent on it. It is the standard efficiency metric in paid media because it can be calculated from two numbers the ad platform already reports.
ROAS is a revenue ratio, not a profit ratio. It says nothing about what it costs you to fulfil the sale. Two campaigns can both report 4x while one funds the business and the other quietly drains it, because the second sells a product with half the margin. That is why ROAS should always be read next to break-even ROAS rather than judged on its own.
The ROAS formula
ROAS = Revenue ÷ Ad Spend
A campaign that generated 10,000 in revenue from 2,500 in ad spend has a ROAS of 4x:
10,000 ÷ 2,500 = 4.0x
Two details decide whether that number means anything. Use revenue attributed to the campaign over the same window as the spend, and be consistent about whether revenue is gross or net of tax and returns. Comparing a platform's click-attributed revenue against your finance team's net revenue is the most common way ROAS reporting goes wrong.
What is break-even ROAS?
Break-even ROAS is the return at which a campaign neither makes nor loses money. It comes from your contribution margin — the share of each sale left after the variable costs of delivering it.
Break-even ROAS = 1 ÷ Contribution Margin
Contribution margin is the price of the product minus every cost that scales with the sale: cost of goods, shipping, payment processing, per-order fulfilment. Fixed costs like salaries and rent stay out of it, because they don't change when you sell one more unit.
Worked example
A product sells for 100. Cost of goods is 35, shipping is 8, and card processing takes 2.9%:
Variable costs = 35 + 8 + 2.90 = 45.90 Contribution = 100 − 45.90 = 54.10 Contribution margin = 54.10 ÷ 100 = 54.1% Break-even ROAS = 1 ÷ 0.541 = 1.85x
Anything above 1.85x contributes profit; anything below it loses money on every sale, no matter how good the ad platform's dashboard looks. Thin-margin categories are unforgiving here — a 20% contribution margin needs 5x just to stand still.
| Contribution margin | Break-even ROAS |
|---|---|
| 20% | 5.00x |
| 30% | 3.33x |
| 40% | 2.50x |
| 50% | 2.00x |
| 60% | 1.67x |
| 70% | 1.43x |
How to calculate ROAS for your campaigns
- Pick one attribution window and one revenue definition, and use them for every campaign you compare.
- Pull attributed revenue and total spend for that window — include agency fees and creative costs if you want a true picture rather than a platform one.
- Divide revenue by spend for ROAS.
- List every variable cost per order: cost of goods, shipping, payment fees, packaging, returns allowance.
- Subtract those from your average order value to get contribution, then divide by AOV for contribution margin.
- Divide 1 by the contribution margin for break-even ROAS — that's your floor.
- Compare the two. The gap between actual and break-even ROAS is your real headroom.
How to interpret your ROAS
There is no universal good ROAS. A subscription business acquiring customers with high lifetime value can run below break-even on the first purchase on purpose. A one-off physical product with no repeat rate cannot. Read your number against three references instead of a benchmark:
- Break-even ROAS — the floor. Below it, growth costs you money on every order.
- Target ROAS — break-even plus the profit margin you actually want to keep. This is the number to put into bid strategies, not break-even.
- Your own history — the same campaign type, last quarter. Cross-industry benchmarks ignore your margins, which are the only thing that decides whether a number is good.
What to do when ROAS is below break-even
- Check the margin inputs first. A miscounted shipping or fee number moves break-even more than most optimisations will.
- Look at average order value before touching targeting — bundles and volume breaks raise contribution per order and lower the ROAS you need.
- Segment before you cut. A blended 2x often hides a 5x branded campaign and a 0.8x prospecting campaign that need opposite decisions.
- If you sell repeat purchases, compare against lifetime value rather than first-order revenue — otherwise you'll switch off acquisition that pays back later.
Maximum CAC and maximum allowable ad spend
Maximum customer acquisition cost is the most you can pay to win one customer before the sale stops being profitable. It equals your contribution per order — in the worked example above, 54.10.
Max CAC = Contribution per order Target CAC = Contribution − desired profit per order
This is the number to translate into bid caps and target CPA settings. If you want to keep 15 of profit on that 100 order, your target CAC is 39.10, not 54.10 — and the ROAS you should be bidding toward rises accordingly.
Maximum allowable ad spend applies the same logic at campaign level: at your current revenue, it's the total spend at which profit reaches zero. Useful as a hard ceiling when you're scaling a campaign quickly and want to know where the edge is before you hit it.
ROAS vs ROI, CPA and CAC
| Metric | Formula | What it tells you |
|---|---|---|
| ROAS | Revenue ÷ Ad spend | Advertising efficiency, ignoring costs |
| ROI | (Profit − Cost) ÷ Cost | Whether the whole investment paid off |
| CPA | Ad spend ÷ Conversions | What one conversion costs |
| CAC | Acquisition cost ÷ New customers | What one paying customer costs |
ROAS and ROI answer different questions and can point in opposite directions: a campaign at 3x ROAS with a 25% contribution margin has a healthy-looking return and a negative ROI. CPA counts conversions, which may be leads; CAC counts customers who paid. If your funnel has a lead stage, track both — the gap between them is your sales conversion rate.