ROAS and Break-Even Calculator

Find out how much net revenue your ads generate per dollar spent, how much return you need to break even, and how much contribution remains after advertising. The three results can point to very different decisions.

Calculate your return

Which figures should I enter?

Ad spend

Use the campaign or channel spend for the same orders and period as the revenue. Keep agency and creative costs separate unless you intend to include them consistently as acquisition costs.

Net revenue

Use settled sales after discounts and refunds. Exclude sales tax collected for the government. If you count shipping revenue, include the corresponding shipping cost in the margin.

Contribution margin before ads

Subtract variable order costs from net revenue and divide by net revenue. Product cost, payment fees, and merchant-paid fulfillment are common items. Enter 35 for a 35% margin.

When a good-looking ROAS loses money

At $8,000 in net revenue and $2,000 in spend, ROAS is 4×. At a 35% margin you retain $2,800 before ads and $800 after ads, with break-even at about 2.86×. Change the margin to 20% while holding everything else constant. The same 4× ROAS now leaves a $400 loss and requires 5× to break even.

Use the result to set a spending rule

Run a separate scenario for each product mix if margins vary. Save the current scenario, then test whether a smaller next batch of spend would clear the same threshold. A blended campaign can remain profitable while the next dollar loses money.

Does the result measure profit or lift?

After-ad contribution excludes overhead that was not entered. It also relies on the revenue you supply. If an ad platform credits purchases that would have happened anyway, the result can overstate the campaign’s incremental contribution. Reconcile refunds with order data and use an experiment when you need to estimate lift.

Related article: ROAS and the profit it leaves behind