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Break-even ROAS calculator

Break-even ROAS is the return on ad spend at which an order’s profit exactly covers its ad cost. It equals 1 ÷ contribution margin, so at a 40% margin you break even at 2.5× ROAS; anything above that is profit.

Break-even advertising

Break-even ROAS

2.5x

Break-even ACoS

40.0%

Max ad spend / order

$32

Break-even ROAS = 1 ÷ contribution-margin fraction. At a 40% margin you break even at 2.5x ROAS, so anything above 2.5x is profitable. ACoS is the inverse of ROAS and equals your margin at break-even.

ROAS, ACoS, and margin

ACoS (advertising cost of sales) is simply the inverse of ROAS: ad spend ÷ revenue. At break-even, ACoS equals your contribution margin: a 40% margin means a 40% break-even ACoS, the same point as a 2.5× break-even ROAS. To target a profit rather than break even, set your goal ROAS above this figure.

Frequently asked questions

What is break-even ROAS?

Break-even ROAS is the return on ad spend at which an order's gross profit exactly covers its ad cost. It equals 1 ÷ contribution margin: at a 40% margin you break even at 2.5x ROAS, so anything above 2.5x is profitable.

How do I calculate break-even ROAS?

Divide 1 by your contribution-margin fraction. If your margin after COGS and variable costs is 50% (0.5), break-even ROAS is 1 ÷ 0.5 = 2.0x. To hit a target profit, set your goal ROAS above break-even.

What is ACoS and how does it relate to ROAS?

ACoS (advertising cost of sales) is the inverse of ROAS — ad spend ÷ revenue. Break-even ACoS equals your contribution margin, so a 40% margin means a 40% break-even ACoS, the same point as a 2.5x break-even ROAS.

Related tools & terms

Is your growth actually profitable?

Break-even ROAS is one half of the picture. Check your LTV:CAC ratio to see whether acquisition pays off over a customer's lifetime.

Check LTV:CAC

See our methodology for how TrustProfit verifies revenue and estimates valuations.