ROAS Calculator
Enter any two of Revenue, Ad Spend and ROAS (×) to calculate the third.
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Tip: 4× equals 400% ROAS.
Used for mROAS, break-even ROAS, and profit.
We’ll show max spend / needed revenue.
Result
ROAS (×)
Value
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Provide any two inputs to compute the third.
Derived insights
mROAS (margin-adjusted)-
Break-even ROAS-
Profit (≈ Rev × GM − Spend)-
Max spend @ Target ROAS-
Revenue needed @ Target ROAS-
What is ROAS (and why it matters)?
ROAS (Return on Ad Spend) shows how much revenue you generate for every currency unit of ad spend. If you spend $10,000 and generate $40,000 revenue, ROAS = 4× (400%).
ROAS vs. ROI
ROAS is revenue ÷ ad spend. ROI is profit ÷ total cost. ROAS ignores costs like COGS, shipping, sales commissions, or platform fees; ROI includes them. Adding a Gross Margin % gives you mROAS (a closer proxy to profitability).
What’s “good” ROAS?
- Ecommerce (single purchase): Many brands aim for 2–5× same-day ROAS depending on margins. High-margin/DTC may scale at lower ROAS if LTV is strong.
- Subscriptions / SaaS: Same-day ROAS is less meaningful-optimize for CAC payback (e.g., < 12 months mid-market SaaS) and LTV:CAC > 3:1.
- Lead gen / pipeline: Track opportunity and revenue ROAS (not just lead ROAS). Tie to win rates and ACV.
Context dominates: margins, LTV, attribution window, discounting, and mix (brand vs. performance) all move the “good” bar.
What excites VC vs. PE (broadly)
VC
- Efficient growth at scale (improving MER/ROAS while spending more)
- Fast CAC payback; strong LTV:CAC
- Demonstrated incrementality (tests, geo-splits, holdouts)
PE / Growth Equity
- Durable blended efficiency (MER) and margin expansion
- Cash conversion & predictable cohorts
- Channel scalability without ROAS collapse
Pitfalls & tips
- Attribution noise: use consistent UTMs, compare blended MER, and validate incrementality with tests.
- Discounts inflate ROAS: watch net margin; track mROAS and profit.
- Over-optimizing ROAS: can throttle volume; set target ROAS by growth stage and margin goals.
ROAS FAQs
It depends on margins and LTV. Many ecommerce brands target 2–5× same-day; subscriptions emphasize CAC payback and LTV:CAC over day-0 ROAS.
ROAS = revenue/ad spend; ROI = profit/total cost. ROAS ignores COGS and other costs; ROI includes them. Use mROAS when you add gross margin to ROAS.
Break-even ROAS (×) ≈ 1 ÷ Gross Margin. Example: 60% margin → 1 ÷ 0.60 = 1.67× (≈167%).
Margin-adjusted ROAS = (Revenue × Gross Margin) ÷ Ad Spend. It’s closer to contribution profitability than raw ROAS.
MER (Marketing Efficiency Ratio) is total revenue ÷ total marketing spend over a period (blended). ROAS is typically channel or campaign-level.
Match it to buying cycle and channel. Compare platform-reported ROAS with blended MER, and run incrementality tests where possible.
Yes-discounts can raise revenue (and ROAS) but lower margins. Track mROAS and profit, not ROAS alone.
If you’re above break-even and hitting contribution goals, a lower ROAS can still be optimal for growth. Use target ROAS tied to margin and payback, not a single “magic” number.
If customers repeat, day-0 ROAS can be lower. Use LTV:CAC and payback period to set your target ROAS and budget caps.
Measure pipeline/value ROAS (opportunity or revenue) not just leads. Align with SQL rate, win rate, and ACV to avoid optimizing for cheap but low-quality leads.