ROAS Formula
Learn the ROAS formula and how to calculate return on ad spend for Google, Meta, TikTok & Amazon — with worked examples.
The ROAS formula is simple: ROAS = Ad Revenue ÷ Ad Spend. A ROAS of 4.0 means you earn $4 for every $1 you spend on ads. But the real question isn't the formula — it's what number means you're actually profitable. This page covers the ROAS formula for Google Ads, Meta (Facebook/Instagram), TikTok, and Amazon, plus how to calculate your break-even ROAS so you know exactly when your campaigns are making money. Use the interactive calculator below to plug in your own numbers and see your ROAS instantly.
What Is the ROAS Formula?
ROAS = Ad Revenue ÷ Ad Spend
Revenue $10,000 ÷ Spend $2,500 = ROAS 4.0. Revenue $3,000 ÷ Spend $2,000 = ROAS 1.5. The formula never changes — only your numbers do, which is why the calculator above updates the moment you type.
ROAS only looks at ad spend and ad revenue, which is why it's the number advertisers check every time they adjust a campaign. ROI, by contrast, factors in total costs — product, shipping, overhead — so it's more of a month-end check on whether the business itself is profitable, not just the ad account. More on that comparison below.
ROAS Formula by Platform
Google Ads
Google Ads reports ROAS directly on Shopping and Performance Max campaigns, and its Target ROAS (tROAS) Smart Bidding strategy lets you set a target and have Google automatically adjust bids to hit it.
A Shopping campaign generating $5,000 in revenue from $1,200 in ad spend has a ROAS of 5,000 ÷ 1,200 = 4.17.
Calculate your own ROAS →Meta Ads (Facebook & Instagram)
Meta Ads Manager shows ROAS as the “Purchase ROAS” column on any campaign using the Purchase objective, powered by the Meta Pixel or Conversions API.
A dynamic product ad (DPA) campaign generating $8,000 in revenue from $2,000 in spend has a ROAS of 8,000 ÷ 2,000 = 4.0.
Calculate your own ROAS →TikTok Ads
TikTok Ads Manager calculates ROAS the same way — total attributed revenue divided by spend — and it's the primary metric for e-commerce campaigns running through TikTok Shop or a connected catalog.
A Spark Ads campaign generating $3,000 in revenue from $900 in spend has a ROAS of 3,000 ÷ 900 = 3.33.
Calculate your own ROAS →Amazon Ads
Amazon Ads reports ACOS (Advertising Cost of Sale) instead of ROAS by default, but the two are directly related: ROAS = 1 ÷ ACOS.
A Sponsored Products campaign generating $6,000 in revenue from $1,500 in spend has an ACOS of 25% and a ROAS of 1 ÷ 0.25 = 4.0.
Calculate your own ROAS →Break-Even ROAS Formula
Break-Even ROAS = 1 ÷ Profit Margin
A ROAS above 1.0 means your ad revenue is covering your ad spend, but that's not the same as being profitable — it ignores what the product actually cost you. Your break-even ROAS is the point where ad revenue covers both ad spend and cost of goods, and it's always 1 ÷ your profit margin. At a 40% margin, you need at least 2.5x ROAS just to break even; below that, every sale loses money once product cost is factored in.
| Profit Margin | Break-Even ROAS |
|---|---|
| 20% | 5.00x |
| 25% | 4.00x |
| 30% | 3.33x |
| 40% | 2.50x |
| 50% | 2.00x |
ROAS Formula vs ROI Formula
ROAS = Ad Revenue ÷ Ad Spend
ROI = (Revenue − Total Costs) ÷ Total Costs × 100%
Take $10,000 in ad revenue, $2,500 in ad spend, and $4,000 in product cost: ROAS = 10,000 ÷ 2,500 = 4.0, while ROI = ($10,000 − $6,500) ÷ $6,500 × 100% = 53.8%. ROAS looks at ad efficiency; ROI looks at whether the business is actually making money.
What is ROAS? Full guideROAS Benchmarks by Industry (2026)
A good ROAS varies by industry — here's a rough starting point before you compare it to your own break-even ROAS.
| Industry | Average ROAS | Good ROAS |
|---|---|---|
| E-commerce | 2–4x | 4–6x |
| SaaS | 1.5–3x | 3–5x |
| Local Services | 3–8x | 8x+ |
Frequently Asked Questions
ROAS = Ad Revenue ÷ Ad Spend. For example, $10,000 in revenue from $2,500 in ad spend gives you a ROAS of 4.0.
Use the formula =B2/C2, where B2 is your ad revenue and C2 is your ad spend. Format the result as a number with an “x” suffix to read it as a multiple.
A good ROAS depends on your profit margin, not a fixed number. As a rough benchmark, e-commerce stores usually aim for 2x–4x, but the ROAS that actually keeps you profitable is specific to your margin.
Find your platform-by-platform ROAS benchmarkBreak-even ROAS = 1 ÷ Profit Margin. With a 40% margin, your break-even ROAS is 2.5x — below that, you lose money on every sale once product cost is factored in.
Open the break-even ROAS calculatorNo. ROAS = Ad Revenue ÷ Ad Spend (ads only). ROI = (Revenue − Total Costs) ÷ Total Costs × 100%, which includes product costs, shipping, and other expenses.
Target ROAS (tROAS) is a Google Ads Smart Bidding strategy where you set the ROAS you want to hit, and Google automatically adjusts your bids in real time to try to reach it.