# Target ROAS Calculator | Break-Even & Profit-Target ROAS Find the break-even and profit-target return on ad spend your margins require before you set bids or scale a campaign. Enter your gross margin to get the break-even and target ROAS, plus spend, conversion rate, and order value to see how your realized ROAS compares. ## What is target ROAS? Target ROAS is the return on ad spend you need to hit your profitability goal, expressed as revenue per dollar of ad spend. It is set by your margins, not by a generic benchmark: if your gross margin is 50%, your break-even ROAS is 2.0. Anything above break-even is profit; anything below it loses money even when the campaign "works". ## How to Calculate Break-Even ROAS **Break-even ROAS = 1 ÷ gross profit margin.** At a 40% margin, break-even ROAS = 1 ÷ 0.40 = 2.5, so every $1 of ad spend must return $2.50 in revenue to break even. Enter your gross margin and the calculator returns that number directly. For a profit target rather than break-even, it also computes **profit-target ROAS = 1 ÷ (gross margin − target margin)** — the ROAS that leaves your desired net margin after both cost of goods and ad spend. ## Frequently Asked Questions ### How do I calculate break-even ROAS? Break-even ROAS = 1 ÷ gross profit margin. At a 40% margin, break-even ROAS = 1 ÷ 0.40 = 2.5, so every $1 of ad spend must return $2.50 in revenue to break even. ### Is a higher target ROAS always better? No. A very high target ROAS caps your reach: bidding only for the cheapest, highest-intent conversions starves the campaign of volume and growth. Most advertisers set target ROAS slightly above break-even to stay profitable while still buying enough volume to scale, then lower it deliberately when pursuing growth. ## Related Tools - [ROAS Calculator](/resources/tools/calculators/roas-calculator.md) - Calculate return on ad spend - [Ad Spend ROI Calculator](/resources/tools/calculators/ad-spend-roi-calculator.md) - Turn ad spend into ROAS and ROI - [Marketing Efficiency Ratio Calculator](/resources/tools/calculators/mer-calculator.md) - Evaluate blended marketing performance ## Get Started Ready to find your target ROAS? Use our free calculator to set bids and budgets with confidence.