Free tool

Break-even ROAS calculator

Find the return on ad spend where a campaign stops losing money, from your gross margin or from price and costs, and the target ROAS you need to clear a profit goal on top.

I know my

Gross margin

Revenue left after product, shipping, and payment costs

Target profit margin

Optional. Net margin you want left after ad spend

A ROAS of 2.50× is the same as 250%. Break-even ACoS, the Amazon term, is simply 1 ÷ ROAS.

Break-even ROAS

2.50×

1 ÷ 40% = 2.50×

Break-even ACoS: 40%
Max ad cost per $100 revenue: $40.00

The ROAS formula

ROAS, break-even ROAS, and target ROAS.

Return on ad spend is revenue divided by ad spend. Break-even is the ROAS at which gross profit exactly covers the ads, which depends only on your margin. Target ROAS adds the profit you want on top.

ROAS

ROAS = Revenue ÷ Ad spend

$5 of revenue per $1 of ads is a 5× ROAS, also written as 500%.

Break-even ROAS

Break-even ROAS = 1 ÷ Gross margin

At a 40% margin you need 2.5× just to cover the cost of the ads.

Target ROAS

Target ROAS = 1 ÷ (Gross margin − Target profit margin)

The ROAS that leaves a chosen net margin after ad costs are paid.

Break-even ACoS

Break-even ACoS = Gross margin

Advertising cost of sale is the inverse of ROAS, so break-even ACoS is simply your margin.

Gross margin here means revenue minus every cost that scales with the order: product or delivery cost, shipping, payment fees, fulfilment. Fixed overheads do not belong in it, because they are paid whether or not the ad runs.

Worked examples

What the numbers look like in practice.

Three businesses at break-even, plus one that wants a profit margin left over after ads. The last column is the ROAS each one has to reach.

Scenario	Gross margin	Target profit	Required ROAS
$100 order, $45 product cost, $15 shipping and fees	40%	0% (break-even)	2.50×
SaaS plan with an 80% gross margin	80%	0% (break-even)	1.25×
Retail product at a 25% margin	25%	0% (break-even)	4.00×
40% margin, keeping 10% net margin after ads	40%	10%	3.33×

Beyond the number

What ROAS tells you, and what it doesn't.

Platform ROAS is not blended ROAS

Every ad platform reports ROAS on the revenue it claims, and those claims overlap, so adding them up overstates the total. Blended ROAS is all revenue divided by all ad spend. Set break-even and target ROAS against the blended number, then use platform ROAS to compare campaigns inside one platform.

Break-even on the first order can still be profitable

If customers reorder or subscribe, the first order's margin understates what the ad bought. Run the LTV calculator and use lifetime gross margin per customer instead of first-order margin to find the ROAS you can actually afford.

ROAS targets need real revenue

A target is only as good as the revenue number under it. Cometly's attribution measures ROAS on Stripe and CRM revenue by campaign and ad, and AI Ads Managerscales the campaigns that clear your target and cuts the ones that don't.

Running paid social? See how Cometly feeds revenue-grounded conversions back to Meta and Google.

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FAQ

ROAS questions, answered.

The formula, break-even, targets, how ROAS differs from ROI and ACoS, and which margin to use.

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What is ROAS?

ROAS is return on ad spend: the revenue generated for every dollar spent on advertising. It is usually written as a multiple or a percentage, so $5 of revenue per $1 of ads is a 5× or 500% ROAS.

How do you calculate ROAS?

Divide the revenue attributed to the ads by the amount spent on them. ROAS = revenue ÷ ad spend. $25,000 of revenue from $5,000 of spend is a 25,000 ÷ 5,000 = 5× ROAS.

What is break-even ROAS?

The ROAS at which the gross profit from the sales exactly covers the ad spend, so the campaign neither makes nor loses money. Below it, every sale loses money after ads; above it, each sale contributes profit.

How do you calculate break-even ROAS?

Divide 1 by your gross margin expressed as a decimal. Break-even ROAS = 1 ÷ gross margin. At a 40% margin, break-even is 1 ÷ 0.40 = 2.5×, meaning you need $2.50 of revenue for every $1 of ads just to cover costs. If you don't know your margin, subtract product cost and other per-order costs from the price and divide by the price.

What is a good ROAS?

One comfortably above your break-even, by enough to leave the profit you need. Because break-even depends entirely on margin, a 3× ROAS is excellent for an 80% margin software product and a loss for a 25% margin retail product. There is no universal good number; there is only your margin and your profit goal.

What is the difference between ROAS and ROI?

ROAS compares revenue with ad spend and ignores every other cost. ROI compares profit with total cost, so it accounts for the cost of goods and other expenses. A campaign can show a strong ROAS and a negative ROI if margins are thin. Break-even ROAS is the bridge between the two: it is the ROAS at which ROI on the ads is zero.

What is ACoS and how does it relate to ROAS?

ACoS, advertising cost of sale, is ad spend divided by revenue, the inverse of ROAS. It is the standard metric on Amazon. A 2.5× ROAS is a 40% ACoS, and break-even ACoS is simply your gross margin.

Should I use first-order margin or lifetime margin?

Use first-order margin when customers typically buy once or when you need the campaign to pay for itself immediately. Use lifetime gross margin per customer when repeat purchases or subscriptions are reliable and you can afford to wait for payback. The second gives a lower, more aggressive break-even ROAS, which is correct only if the repeat revenue really arrives.

ROAS is a ratio.
Profit is the result.

Cometly measures ROAS on real revenue from Stripe and your CRM, by campaign and ad, so your targets are set against numbers you can trust.

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