Free tool · Google Ads and Meta Ads
ROAS Calculator: return on ad spend and real profit
Results
These ads made $1,600 after paying for themselves.
ROAS
4.50x
450% · $4.50 per $1
Break-even ROAS
2.50x
1 ÷ gross margin
Profit after ad spend
$1,600
gross profit $3,600 − spend
Revenue to break even
$5,000
most you could spend for this revenue: $3,600
How it works
The three formulas, in plain English
ROAS
Revenue ÷ ad spend. How many dollars came back for each dollar spent on ads. It says nothing about cost of goods, staff or delivery.
Break-even ROAS
1 ÷ gross margin. At a 25% margin you keep 25 cents of each dollar, so you need $4 of revenue per $1 of ads just to cover the ads. Break-even ROAS is 4x.
Profit after ad spend
Revenue × margin − ad spend. The money you keep once the work is delivered and the ads are paid. This is the number I care about most.
How to use the calculator
Pick one period
A month, a quarter or one campaign. Spend and revenue must cover the same dates, or the result is meaningless.
Enter real revenue
Money from customers who came from the ads. If you run a lead-based business, use closed deals, not the lead values in the ad platform.
Enter your gross margin
Revenue minus the direct cost of delivering it, as a share of revenue. A clinic that spends $40 on product and staff time for a $100 treatment has a 60% margin.
Optionally, add a profit goal
Say you want 15% of revenue left as profit after ads. The calculator gives the target ROAS that gets you there.
How to read the gauge and the numbers
The gauge has a white tick at your break-even ROAS. Left of it, in red, the ads are losing money once delivery costs are counted. Right of it, in green, they are profitable. The further right the needle sits, the more room you have to raise bids and buy more volume.
Revenue to break even tells you how much the ads have to bring in to pay for themselves at the spend you entered. The line under it flips the question: the most you could have spent for the revenue you got and still not lost money.
If the needle is in the red, don't panic and switch everything off. Check the inputs first. The revenue number is the one most often wrong, usually because repeat customers, phone sales or deals closed later aren't being counted.
Worked examples
A 4x ROAS that loses money
$5,000 of spend brings $20,000 of revenue: ROAS 4x. With a 20% margin, gross profit is $4,000, so the ads lose $1,000. Break-even ROAS is 5x. The platform report looks great; the bank account doesn't.
A 2x ROAS that makes money
$3,000 of spend brings $6,000: ROAS 2x. A service business with a 70% margin keeps $4,200 before ads, so it makes $1,200 profit. Break-even ROAS is about 1.43x.
Setting a target ROAS
Margin 50%, and you want 20% of revenue left as profit. The ads can take the other 30%, so target ROAS is 1 ÷ 0.30 = 3.33x, or 333% in Google Ads.
A real account, for context
Across the client accounts on my results page, conversion value was $544K from $80.5K of spend over Oct 2025 – Oct 2026, about 6.8x. Whether that is profitable depends on each business's margin, which is exactly the point of this tool. Details are in the case studies.
Mistakes that make ROAS look better than it is
- Using the ad platform's conversion value as revenue when it is only an estimate per lead.
- Counting the same sale in Google Ads and Meta Ads, so both platforms claim it.
- Leaving out refunds, cancellations and no-shows.
- Using markup instead of margin. A 100% markup is a 50% margin, and the difference changes break-even ROAS a lot.
- Judging brand campaigns and new-customer campaigns together. Brand searches nearly always show a high ROAS because those people were coming anyway.
- Comparing a month of spend against revenue from a different month.
My practical tips
Use margin, not a rule of thumb
You'll often hear that a 4x ROAS is "good". It means nothing without margin. Work out break-even ROAS for your business once and write it down.
Look at lifetime value for repeat services
A med spa client who comes back four times a year is worth far more than the first booking. If you can measure repeat revenue, a lower first-sale ROAS can be fine.
Feed real sales back to the platform
When the platforms know which leads became paying clients, bidding can aim for revenue instead of form fills. That's a big part of the full-funnel tracking work I do, and it starts with tagging every landing page, which the bulk UTM builder does in one go.
Move targets in small steps
If you set a target ROAS far above what a campaign achieves, it usually just spends less. Raise it gradually and watch volume.
Not sure how much to spend in the first place? Use the Google Ads budget calculator to see what a budget buys in clicks and leads, then come back here once revenue starts coming in. If you'd like a second pair of eyes on the account itself, my Google Ads management page explains how I work.
FAQ
ROAS questions
What is break-even ROAS?
It is the return on ad spend at which the ads pay for themselves and nothing more. The formula is 1 divided by your gross margin. With a 40% margin you need a ROAS of 2.5x to break even; anything above that is profit, anything below is a loss.
What is the ROAS formula?
ROAS = revenue from ads ÷ ad spend. $9,000 of revenue from $2,000 of spend is a ROAS of 4.5x, which some tools show as 450%. Both mean $4.50 back for every $1 spent.
What is a good ROAS?
Any ROAS above your break-even ROAS is profitable, so a good ROAS depends on your margin. A 4x ROAS is excellent for a business with 50% margins and a loss for one with 20% margins. That is why I never judge ROAS without the margin next to it.
Should I use the conversion value in Google Ads as revenue?
Only if it reflects real sales. For lead-based businesses the conversion value is often an estimate per lead. Use money that actually came in, or at least import offline sales or closed deals so the value is real.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend only. ROI compares profit with total cost, which can include fees, staff time and the cost of delivering the work. This calculator gets you closer to ROI by using your margin to show profit after ad spend.
How do I set a target ROAS in Google Ads?
Use the optional profit goal field. It works out the ROAS you need to keep that share of revenue as profit. Google Ads expects the target as a percentage, so 3.2x becomes 320%. Start near what the campaign already achieves and move it in steps, because a big jump can cut volume sharply.
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