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🎯 Target ROAS Calculator

Break-even keeps the lights on; target ROAS is the number that actually pays you. Enter your gross margin and the net profit you want to keep, and get the ROAS your ads need to hit.

$0$500
$0$200
0%80%
Break-Even ROAS
1.48×
Minimum to not lose money
Target ROAS
2.11×
To hit your profit target
Max CPA
$23.20
Most you can pay per purchase
Contribution Margin
$33.00
Your break-even ROAS is 1.48×. To keep 20% net profit your ads need to hit 2.11×.
Formula:Break-even ROAS = Revenue ÷ Ad Spend = 1 ÷ Gross Margin %
Industry Benchmarks
Excellent ROAS (4×+)4× and above
Good (2.5–4×)2.5× – 4×
Struggling (below 2×)Below 2×
Recommended next step

How to use this tool

  1. Enter your gross margin. Your product gross margin as a percentage — what you keep before ad spend.
  2. Enter your desired net profit margin. The profit you want to keep as a percentage of revenue, after ads.
  3. Read your target ROAS. The calculator shows the ROAS you need to hit that profit, plus your break-even ROAS for reference.

Target ROAS Calculator — explained

Target ROAS works back from a profit goal. If you spend a share of revenue on ads equal to 1 ÷ ROAS, your net margin is roughly gross margin minus that share. Set net margin to your target and the math gives Target ROAS = 1 ÷ (Gross Margin − Target Profit Margin).

Break-even ROAS (1 ÷ gross margin) is the floor. Target ROAS is the line you actually steer toward. Anything in between is profitable but below goal — useful context when deciding whether to keep, tune, or scale a campaign.

A higher target profit margin demands a higher ROAS, which is harder to scale. Most operators pick a realistic profit target (15–25%) so they can push volume, rather than chasing a high-margin number that caps spend.

Use this in context

Target ROAS Calculator — common questions

What is target ROAS?
Target ROAS is the return on ad spend you need to reach a specific profit goal, not just to break even. It equals 1 ÷ (Gross Margin − Target Net Profit Margin).
How is target ROAS different from break-even ROAS?
Break-even ROAS only covers your costs (1 ÷ gross margin). Target ROAS builds in the profit you want to keep, so it is always a higher number than break-even.
What is a realistic target ROAS?
It depends on margin. At a 70% gross margin, a 20% net profit goal needs a 2× ROAS. Chasing very high profit margins forces a high ROAS that is hard to scale.
Should I optimise campaigns to break-even or target ROAS?
Use break-even ROAS as your kill line and target ROAS as your goal. Between the two you are profitable but below target — a signal to improve creative or offer rather than kill.
Original content by First Sale Society — . Free, no paywall.