Break-Even ROAS Calculator
Find the break-even and target return on ad spend from your actual contribution margin — revenue ROAS alone never tells you if you're profitable.
2.5xbreak-even ROAS
Contribution before ads: $40 (40.0% margin)
| Metric | Value |
|---|---|
| Contribution before ads | $40 |
| Margin | 40.00% |
| Break-even ROAS | 2.5x |
| Break-even CPA | $40 |
| Target ROAS | 2.5x |
| Allowable spend | $40 |
| Allowable CPL | Enable lead mode |
Contribution before advertising
How this is calculated
M = R − C | breakEvenROAS = R / M | targetROAS = R / (M − P)R is revenue per acquired order, C is non-ad variable costs (percentage and fixed combined without double counting), M is contribution before ads, and P is your desired profit.
Worked example
R = $100, C = $60: M = $40, a 40% margin. Break-even ROAS = 100 / 40 = 2.5×, and the most you could pay to acquire this order is its full $40 contribution (CPA).
Break-even versus target profit
Break-even ROAS is where ad spend exactly consumes contribution (zero profit). Target ROAS instead solves for a declared desired profit P: with $10 desired profit, target ROAS = 100 / (40 − 10) = 3.3333×, and allowable spend = 40 − 10 = $30.
Fees tied to ad spend
An agency fee expressed as a percentage of ad spend divides allowable spend by (1 + fee) rather than subtracting a flat amount, since the fee itself scales with however much you actually spend.
Lead-generation assumptions
For lead generation, allowable cost per lead = close rate × contribution per closed sale, minus other per-lead costs: at a 20% close rate and $40 sale contribution, allowable CPL = $8 before lead costs.
- Revenue ROAS ≠ profit
- Break-even and target ROAS are derived from contribution margin, not revenue alone.
- Local scenarios only
- Scenario comparisons stay in your browser — nothing is sent anywhere by default.
Questions
Why is revenue ROAS different from profit?
ROAS only compares revenue to ad spend — it says nothing about the cost of the goods, fees or shipping behind that revenue. A 4x ROAS on a low-margin product can lose money, while a 2x ROAS on a high-margin product can be very profitable. Break-even and target ROAS in this tool are calculated from your actual contribution margin, not from revenue alone.
How does a lead close rate change allowable CPL?
For lead generation, you're not paying for a sale directly — you're paying for a lead that only sometimes converts. Allowable cost-per-lead = close rate × contribution per closed sale, minus any other per-lead costs. A lower close rate means each lead is worth less on average, so the allowable CPL drops proportionally.