Minimum ROAS Calculator — Find Your Break-Even Point

Minimum ROAS is the lowest return on ad spend at which your campaigns are still profitable. The formula: Minimum ROAS = 1 / (Gross Margin % − Overhead %). For example, if your gross margin is 60% and overhead costs are 20% of revenue, your net margin is 40%, so your minimum ROAS = 1 / 0.40 = 2.5x. Any ROAS below 2.5x means the campaign loses money. A simpler version: Break-Even ROAS = 1 / Net Profit Margin %. At 25% net margin, break-even ROAS is 4.0x. Always set your actual target above the minimum to ensure real profit.

Without a clear minimum ROAS, you risk scaling unprofitable campaigns. Many advertisers focus only on revenue ROAS without subtracting product and operating costs. Knowing your exact break-even point lets you confidently increase budgets on campaigns above the threshold and cut campaigns below it. It also sets a realistic floor for automated bidding strategies.