ROAS Calculator — Break-Even ROAS, Target ROAS, LTV & CAC
Calculate ROAS, the break-even ROAS your margin requires, max CPA, LTV, CAC and payback period.
Return on ad spend
Attributed revenue for the same period and campaigns as the spend.
Revenue minus cost of goods, shipping, payment fees, as a % of revenue.
Profit you want to keep after ad costs. 0 = break-even.
Profitable but below target: above break-even (2.50×) but short of the 3.33× needed to keep 10% of revenue as profit.
Maximum CPA per order
This is per first order. If customers reorder, you can afford more; the LTV panel below shows how much.
LTV, CAC and payback
In the commonly cited healthy range (around 3:1 or better).
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This ROAS calculator divides the revenue your ads produced by what they cost, and then answers the question ROAS alone cannot: is that number profitable for your business? Enter your gross margin and it gives your break-even ROAS, the target ROAS needed to keep a chosen share of revenue as profit, and the most you can pay to acquire an order.
A 3× ROAS sounds healthy, but at a 30% margin every dollar of ads returns only 90 cents of gross profit. That gap between revenue and profit is the most common reason ad accounts that look good on the dashboard lose money. The lower panel extends the same logic to repeat customers: lifetime value, customer acquisition cost, the LTV:CAC ratio and how many months it takes to earn back what you paid for a customer.
How to use
- Enter the revenue attributed to your ads and the ad spend for the same period.
- Enter your gross margin: revenue minus product cost, shipping and payment fees, as a percentage of revenue.
- Set a profit target (0 for break-even) to see the ROAS and CPA you need.
- Add your average order value for the max CPA, then choose repeat-purchase or subscription to calculate LTV, CAC and payback.
Frequently asked questions
How do you calculate ROAS?
ROAS = revenue from ads ÷ ad spend. $18,000 of revenue from $6,000 of ads is a ROAS of 3, often written 3× or 300%. Use revenue and spend for the same campaigns and the same attribution window; mixing a 7-day click window for revenue with a monthly spend figure produces a meaningless number.
What is break-even ROAS?
Break-even ROAS = 1 ÷ gross margin. At a 40% margin it is 1 ÷ 0.40 = 2.5: every $1 of ads must bring in $2.50 of revenue just to cover the ad and the cost of the goods. Below that ROAS you lose money on each sale, before counting any fixed costs.
What is a good ROAS?
One above your target ROAS, which depends on your margin. A figure of 4:1 is often quoted as a general goal, but it is only right for businesses with margins around 35–50%. A high-margin software or info product can be profitable at 1.5×; a low-margin reseller may need 6× or more. Repeat purchases also change the answer, which is why the LTV panel exists.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only. ROI compares profit to the total investment: (gain − cost) ÷ cost. A campaign can have a 3× ROAS and a negative ROI once product costs, fees and agency fees are included. ROAS is the quick in-platform metric; profit after ad spend, shown here, is the one that pays the bills.
What is a good LTV to CAC ratio?
A ratio of about 3:1 is the commonly cited rule of thumb, especially in SaaS: a customer should bring in three times what they cost to acquire, in gross profit. Below 1:1 you lose money on every customer. Well above 5:1 can mean you are under-spending and growing slower than you could. Pair it with CAC payback; many subscription businesses aim to earn back CAC within 12 months.
The formulas
• ROAS = revenue ÷ ad spend
• Break-even ROAS = 1 ÷ gross margin
• Target ROAS = 1 ÷ (gross margin − profit target), with both as fractions of revenue
• Profit after ads = revenue × gross margin − ad spend
• Break-even CPA = average order value × gross margin
• LTV (repeat purchase) = AOV × orders per year × years retained × gross margin
• LTV (subscription) = monthly revenue per customer × gross margin ÷ monthly churn rate
• CAC = sales and marketing spend ÷ new customers
• CAC payback (months) = CAC ÷ monthly gross profit per customer
LTV here is gross-margin LTV. Revenue-based LTV is larger and flatters the LTV:CAC ratio, which is a common way the ratio gets overstated.
Where ROAS misleads
Platform-reported ROAS counts every sale the platform can claim within its attribution window, including people who would have bought anyway, such as returning customers clicking a branded search ad. Retargeting and brand campaigns therefore show very high ROAS, and prospecting campaigns that actually find new customers show low ROAS. Judging them on the same number cuts the wrong one.
Two checks help: compare blended ROAS (total revenue ÷ total ad spend) against the sum of what the platforms claim, and run holdout or geo tests when spend is large enough. And tag every link with UTM parameters, so your own analytics can confirm what the ad platforms report.
Related free tools
- CPM Calculator — Work out CPM, ad spend or impressions from the other two, plus CPC, CPA, CTR and conversion rate on one page.
- Break-Even Calculator — Fixed costs, unit cost and price give your break-even point, contribution margin, the units needed for a target profit, and the price for a chosen margin.
- A/B Test Calculator — Check whether an A/B test result is statistically significant, and plan the sample size and duration of the next one.
- UTM Link Builder — Build clean, consistent UTM tracking links so you know exactly which campaigns bring you customers.