Break-even ROAS Calculator
Find the minimum ROAS your campaigns need to break even - and see how net profit changes as ROAS moves. Enter your gross margin and the calculator does the rest.
How break-even ROAS is calculated
Break-even ROAS = 100 / Gross margin (%)Break-even ROAS is the minimum return on ad spend at which your ad costs are exactly covered by gross profit. Below this threshold, each campaign dollar destroys margin; above it, campaigns are profitable.
The formula is straightforward: break-even ROAS = 1 / gross margin (as a decimal), or equivalently 100 / gross margin (%). A product with 40% gross margin needs a 2.5x ROAS to break even. A product with 25% margin needs 4x.
The third field - net profit after ads - lets you target a profit margin rather than just breaking even. Set it to your desired margin and the calculator shows the ROAS needed to hit that target, not just survive.
- Gross margin
- Revenue minus cost of goods, as a percentage of revenue. Does not include ad spend.
- Break-even ROAS
- The ROAS at which gross profit exactly covers ad spend - net profit after ads is zero.
- Net profit after ads
- Gross margin minus the ad cost percentage (100 / ROAS). Positive means profitable, negative means loss.
Common questions
How do I find my gross margin?
Gross margin = (Revenue - Cost of goods sold) / Revenue x 100. For a $50 product with $20 in COGS, gross margin is 60%. This is the figure to enter here - do not deduct ad spend, that is what the calculator accounts for.
What if my ROAS is above break-even but I am still losing money?
Break-even ROAS only covers gross profit vs. ad spend. If you have high fixed costs (salaries, rent, SaaS tools), your overall profitability threshold is higher. Add those costs to get your true break-even target.
How is break-even ROAS different from target ROAS?
Break-even ROAS is the floor - the minimum to not lose money on ads. Target ROAS is the ROAS you need to hit your desired profit margin. Use the net profit after ads field here to set a target above zero and find your true target ROAS.