ROAS calculator: the ROAS formula, break-even ROAS, and what is good

Last checked against Google’s documentation on 5 October 2026.

The ROAS formula

ROAS (return on ad spend) is how much revenue, or conversion value, your ads bring in for each unit of money spent on them. The formula is:

ROAS = conversion value ÷ ad spend

Multiply by 100 to express it as a percentage. 5,000 in conversion value from 1,000 of ad spend is a ROAS of 5, or 500%. Google uses exactly this formula on its Target ROAS help page: conversion value ÷ ad spend × 100% = target ROAS. Its example is a store that wants 5 in sales for every 1 it spends, which is a 500% target.

ROAS on its own doesn’t tell you whether you made money. That depends on your margin, which is why this page also calculates break-even ROAS: the lowest ROAS at which the ads pay for themselves.

ROAS and break-even ROAS calculator

Enter conversion value and ad spend for the same period to get ROAS as a ratio and a percentage. Add your margin to see break-even ROAS, and the share of revenue you want left as profit after ads to see the ROAS that goal needs. The defaults are illustrative.

How to calculate ROAS: three worked examples

All amounts below are illustrative, in any currency.

Online store

A Shopping campaign spent 2,000 last month and recorded 9,000 in purchase value. ROAS = 9,000 ÷ 2,000 = 4.5, or 450%. The store’s margin after product cost, shipping, and payment fees is 30%, so break-even is 1 ÷ 0.30 = 3.33. The campaign is above break-even: it kept 9,000 × 0.30 − 2,000 = 700 after ad spend.

Lead generation

A service business doesn’t record revenue in Google Ads; it records form leads. It can still calculate ROAS if it gives each lead a value. If 20% of leads become customers and an average job is worth 1,500, a lead is worth 0.20 × 1,500 = 300. With 40 leads from 3,000 of spend, ROAS = (40 × 300) ÷ 3,000 = 4. That ROAS is only as good as the close rate and job value behind it, so check them against your own records every quarter.

Subscription software

A SaaS company records trial sign-ups. If its conversion value is first-year revenue per paying customer, a ROAS that looks low on day one can be fine over the life of the customer. Decide which value you are measuring (first payment, first year, or expected lifetime) and keep it the same when you compare periods. Mixing them is the fastest way to misread ROAS.

ROAS vs ROI

ROAS and ROI are often used interchangeably, but they answer different questions:

Using the store example above: ROAS is 4.5. The gross profit on 9,000 at a 30% margin is 2,700. ROI on the ad spend is (2,700 − 2,000) ÷ 2,000 = 35%. Same campaign, two very different-looking numbers. Google’s own column for ROAS is called conversion value per cost, and Google says it “estimates your return on investment”. It only does that if the conversion values you send reflect profit, which most accounts don’t.

Break-even ROAS: the number that matters first

Break-even ROAS is the ROAS at which the margin from ad-driven sales exactly covers the ad spend. The formula:

Break-even ROAS = 1 ÷ margin (margin as a decimal)

At a 50% margin you need 2 in revenue for each 1 of spend just to stand still. At 20% you need 5. Use the margin that is left after everything a sale costs you: product or service delivery, shipping, payment fees, and commissions. Using the list price or a gross margin that leaves out per-sale costs makes break-even look easier than it is.

If you want profit after ads, not just break-even, subtract the share of revenue you want to keep from the margin first. With a 40% margin and a goal of keeping 10% of revenue as profit, the ROAS you need is 1 ÷ (0.40 − 0.10) = 3.33, or 333%.

What is a good ROAS?

A good ROAS is one above your break-even ROAS, with enough room for the profit you want. That is the only definition that holds across businesses. A ROAS of 3 is a loss for a business with a 25% margin (break-even 4) and comfortably profitable for one with a 60% margin (break-even 1.67). Averages quoted online blend businesses with completely different margins, so they can’t tell you whether your number is good.

Within your own account, judge ROAS in context:

• Brand vs non-brand. People searching your name already intend to buy; a brand campaign’s ROAS is usually far higher and shouldn’t set the bar for prospecting.
• New vs returning customers. A campaign that wins new customers who reorder later can be worth running below first-order break-even.
• Lifetime value. Subscription and repeat-purchase businesses can accept a lower first-purchase ROAS if they know what a customer is worth over time.
• Volume. A higher ROAS on less spend can earn less total profit than a slightly lower ROAS on more spend. Look at margin left after ad spend in money, not only the ratio.

ROAS in Google Ads: the Conv. value / cost column

Google Ads shows ROAS in the Conv. value / cost column. Google’s definition is simply conversion value ÷ cost. It is a ratio, so 4.00 in the column means 400%. Add it to the campaigns table next to Cost and Conv. value, then segment by campaign, device, or time to see where return comes from.

Before you trust the number, check three things:

1. Conversion values are real. If every conversion uses the same default value, or a lead form is given an arbitrary value, the column measures that guess. See our conversion tracking guide for setting values.
2. Only the right actions are counted. Secondary actions don’t feed the Conversions column or bidding; if a micro-step is set as primary with a value, ROAS is inflated.
3. Recent days are complete. Google’s conversion data page says the conversion columns are calculated by the time of the click, not the time of the conversion, so the last few days look worse until late conversions arrive.

From break-even ROAS to a Target ROAS

Target ROAS is the Smart Bidding strategy that sets bids to get as much conversion value as possible at the return you enter. Per Google’s Target ROAS page:

• You enter the target as a percentage. A Conv. value / cost of 4.0 corresponds to a 400% target.
• Google recommends a target based on your actual ROAS over the last few weeks, leaving out the most recent days to allow for conversion delays.
• Search and Shopping campaigns need at least 15 conversions in the past 30 days.
• Setting the target too high may limit the traffic your ads get.

The break-even ROAS is your floor, and the actual ROAS is your starting point. If actual is well above break-even, start the target near actual and leave it alone for a couple of conversion cycles. If actual is below break-even, raising the target sharply usually cuts volume rather than fixing return; look first at what is pulling return down: search terms, product mix, landing pages, or conversion values. Since August 2026 Google has also changed how Target ROAS campaigns behave when budget-limited; see the August 2026 Target CPA and ROAS change.

When the ROAS number misleads you

• Revenue isn’t profit. Two products with the same price and different margins earn the same ROAS and very different profit. If you can, send values that reflect margin.
• Brand traffic flatters the average. Blended ROAS can look healthy while non-brand campaigns lose money.
• Lead values drift. If close rates change and lead values don’t, ROAS keeps reporting the old reality.
• Returns and cancellations. Value recorded at purchase doesn’t subtract refunds unless you adjust it.
• Short windows. Judging a week of ROAS in a business with a long buying cycle swings decisions on noise.

In Boxoo, the budgets and bidding agent checks every day whether each campaign’s bid strategy and target fit the conversion data behind it, and flags a Target ROAS set so high the campaign can’t spend or so low it overpays. It can prepare a new target, a budget change, or a switch of bid strategy; nothing changes until you press Apply, and most changes keep an undo. The tracking and measurement agent checks the conversion actions that the ROAS number is built on. To see where your account stands now, run a free Google Ads audit.