How to calculate ROAS
ROAS = revenue from ads ÷ ad spend. $15,000 in revenue from $4,000 in spend is a 3.75x ROAS, or 375%.
Break-even ROAS is the number that matters
Break-even ROAS = 1 ÷ profit margin. At a 40% margin you need 2.5x just to cover the ads. A 3x ROAS that looks healthy in the ad platform is a thin profit at 40% margin and a loss at 25%. Set your target from margin first, then judge campaigns against it.
For subscription businesses, first-purchase ROAS understates value because customers keep paying. Many SaaS teams accept a first-month ROAS under break-even when LTV covers it. Use the LTV calculator to check how far you can go.
Why platform ROAS and real ROAS disagree
Ad platforms credit themselves for conversions using their own attribution windows, and several platforms can claim the same sale. Compare platform ROAS against revenue in your own analytics or billing system. If the platforms together claim more revenue than you actually made, trust the lower number.
Frequently asked questions
What is a good ROAS?
One that beats your break-even ROAS, which is 1 divided by your profit margin. At 40% margin anything above 2.5x is profitable.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only. ROI subtracts all costs first and shows profit as a percentage.
How do I calculate break-even ROAS?
Divide 1 by your profit margin as a decimal. 1 ÷ 0.4 = 2.5x.
Is my data stored?
No. The calculator runs in your browser.