Amazon.com Inc. (NASDAQ:AMZN)

Gross property and equipment exhibited a consistent upward trend throughout the observed period, increasing from US$238.8 billion in 2021 to US$534.1 billion in 2025. This substantial growth indicates significant investment in long-term assets. However, the composition of these assets has shifted considerably over time. Land and buildings represent the largest component, growing from US$81.1 billion in 2021 to US$155.1 billion in 2025, demonstrating a sustained commitment to physical infrastructure. Notably, reporting for servers and networking equipment, and heavy equipment commenced in 2024, with values of US$113.2 billion and US$52.2 billion respectively, suggesting substantial recent investments in these areas. Other equipment experienced a decline in reported value from US$128.7 billion in 2021 to US$63.4 billion in 2025, potentially due to reclassification, disposal, or changes in accounting practices. Construction in progress also increased significantly, from US$24.9 billion in 2021 to US$71.7 billion in 2025, signaling ongoing expansion projects.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization increased steadily from US$78.5 billion in 2021 to US$177.1 billion in 2025. This increase is consistent with the growth in gross property and equipment and reflects the ongoing consumption of the economic benefits of those assets. The rate of increase appears to be relatively stable, suggesting consistent depreciation policies.

Net Property and Equipment

Net property and equipment, calculated as gross property and equipment less accumulated depreciation and amortization, increased significantly from US$160.3 billion in 2021 to US$357.0 billion in 2025. This growth, while substantial, was moderated by the increasing depreciation expense. The most significant increase in net property and equipment occurred between 2024 and 2025, coinciding with the first full year of reporting for servers, networking equipment, and heavy equipment, as well as continued growth in construction in progress.

Compositional Shifts

The relative importance of asset categories changed over the period. While land and buildings remained the largest component, the introduction of substantial values for servers and networking equipment and heavy equipment in 2024 indicates a strategic shift towards investments in technology and operational capacity. The decline in ‘Other equipment’ suggests a potential reallocation of resources or a change in how these assets are categorized.

The substantial growth in construction in progress throughout the period suggests continued investment in future capacity. The increasing values for servers and networking equipment are indicative of expansion in technology infrastructure, potentially supporting cloud computing or other digital services. Overall, the disclosures suggest a period of significant capital investment and expansion, with a notable shift in the composition of property and equipment towards technology-focused assets in recent years.

An examination of the asset age ratios reveals a fluctuating pattern over the five-year period. The average age ratio initially increased from 32.88% in 2021 to 37.04% in 2023, before decreasing to 33.15% in 2025. This suggests a period of increasing asset age followed by a stabilization and slight reduction.

Average Age Ratio

The average age ratio demonstrates a peak in 2023 at 37.04%, indicating that, on average, the company’s property, plant, and equipment were closer to the end of their useful lives during that year compared to other years in the observed period. The subsequent decline in the ratio suggests recent acquisitions or disposals have introduced newer assets into the asset base.

Estimated Total Useful Life

The estimated total useful life of the assets has been consistently increasing, moving from 10 years in 2021 to 13 years in 2025. This lengthening of the estimated useful life could be due to improvements in asset maintenance, technological advancements extending asset functionality, or a change in accounting policies regarding asset depreciation.

Estimated Age & Remaining Life

The estimated age, representing the time elapsed since purchase, remained constant at 4 years throughout the period. Simultaneously, the estimated remaining life increased from 7 years in 2021 and 2022 to 9 years in 2025. This increase in remaining life, coupled with a constant age, aligns with the observed increase in the estimated total useful life and suggests assets are being valued with longer operational expectations.

The interplay between these ratios indicates a potential shift in the composition of the asset base and/or a reassessment of asset longevity. The initial rise in the average age ratio, followed by its decline and the concurrent increase in estimated useful life and remaining life, warrants further investigation into capital expenditure patterns and depreciation methodologies.

The values for accumulated depreciation and amortization, gross property and equipment, and the average age ratio demonstrate distinct trends over the five-year period. Accumulated depreciation and amortization consistently increased year-over-year, indicating ongoing consumption of the value of the company’s fixed assets. Gross property and equipment also exhibited a consistent upward trend, though at a varying rate, suggesting continued investment in fixed assets.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization increased from US$78,519 million in 2021 to US$177,073 million in 2025. The rate of increase accelerated between 2021 and 2023, growing by US$19,500 million and US$23,100 million respectively. While still increasing, the growth slowed in 2024 and 2025 to US$29,080 million and US$35,683 million, respectively. This suggests a potential shift in the composition or depreciation methods applied to the asset base.

Gross Property and Equipment

Gross property and equipment increased from US$238,800 million in 2021 to US$534,098 million in 2025. The largest absolute increase occurred between 2023 and 2024, with an addition of US$70,000 million. The increase from 2024 to 2025 was also substantial, at US$140,043 million, indicating significant capital expenditure during those periods. This substantial growth suggests a period of expansion and investment in long-term assets.

Average Age Ratio

The average age ratio, representing the proportion of fixed assets that have been depreciated, initially increased from 32.88% in 2021 to 37.04% in 2023. This indicates that, on average, the fixed asset base was becoming older. However, the ratio decreased to 35.88% in 2024 and further to 33.15% in 2025. This decline suggests that recent investments in property and equipment are relatively new, lowering the overall average age of the asset base. The fluctuations in this ratio are likely influenced by the timing and scale of capital expenditures relative to the ongoing depreciation process.

In summary, the company demonstrates consistent investment in property and equipment, coupled with ongoing depreciation. The decreasing average age ratio in the later years suggests that recent capital expenditures are contributing to a younger overall asset base, potentially improving operational efficiency and future profitability.

Gross property and equipment exhibited a consistent upward trend over the five-year period, increasing from US$238,800 million in 2021 to US$534,098 million in 2025. Concurrently, depreciation and amortization expense on property and equipment also increased, rising from US$22,909 million in 2021 to US$41,860 million in 2025. Notably, the reported estimated total useful life of these assets has been progressively extended throughout the period.

Gross Property and Equipment Growth

The growth in gross property and equipment accelerated over time. The increase from 2021 to 2022 was US$44,930 million, while the increase from 2024 to 2025 was US$140,043 million. This suggests increasing investment in property, plant, and equipment.

Depreciation and Amortization Expense

Depreciation and amortization expense increased in line with the growth in gross property and equipment, although the rate of increase was not perfectly proportional. The expense grew by approximately 8.8% from 2021 to 2022, 21.3% from 2022 to 2023, and 6.1% from 2024 to 2025. This variation could be attributable to changes in the composition of the asset base or adjustments to depreciation methods.

Estimated Useful Life Extension

The estimated total useful life of the property and equipment has been extended from 10 years in 2021 to 13 years in 2025. This extension implies a belief that the assets will contribute to revenue generation for a longer duration than initially anticipated. A lengthening useful life directly reduces the annual depreciation expense recognized, potentially improving reported profitability. The consistent, year-over-year increase in estimated useful life warrants further investigation to understand the underlying rationale and potential impact on financial reporting.

The combination of increasing asset values, rising depreciation expense, and extending useful lives suggests a significant and evolving investment strategy in property, plant, and equipment. The lengthening of the estimated useful life is a key observation that could have material implications for the company’s financial performance and asset valuation.

Analysis reveals a consistent increase in accumulated depreciation and amortization, alongside a corresponding rise in annual depreciation and amortization expense on property and equipment over the five-year period. The reported time elapsed since purchase remains constant, suggesting a consistent pattern of asset acquisition and depreciation rather than a significant influx of new assets impacting the average age.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization increased substantially from US$78,519 million in 2021 to US$177,073 million in 2025. This represents a cumulative increase of approximately 125.5% over the period. The rate of increase appears to be accelerating, with larger absolute increases observed in later years. The increase from 2024 to 2025 (US$35,683 million) is notably higher than the increase from 2021 to 2022 (US$18,496 million).

Depreciation and Amortization Expense

Depreciation and amortization expense on property and equipment also demonstrates an upward trend, rising from US$22,909 million in 2021 to US$41,860 million in 2025. This signifies a 82.8% increase over the five-year period. Similar to accumulated depreciation, the annual expense increase is not linear, with a more pronounced increase between 2024 and 2025 (US$9,793 million) compared to earlier periods.

Time Elapsed Since Purchase

The reported time elapsed since purchase consistently remains at 4 years throughout the observed period. This suggests that the company is consistently depreciating assets acquired approximately four years prior. The constant value indicates a stable asset acquisition pattern, without significant changes in the age profile of the property, plant, and equipment base.

The parallel increases in both accumulated depreciation and annual expense, coupled with the stable time elapsed since purchase, suggest a consistent depreciation policy applied to a relatively stable asset base. The accelerating increases in both metrics in recent years warrant further investigation to determine if this is due to increased capital expenditure in prior periods, changes in depreciation methods, or other factors influencing the depreciation schedule.

Property and equipment, net, exhibited a consistent upward trend over the five-year period, increasing from US$160,281 million in 2021 to US$357,025 million in 2025. Concurrently, depreciation and amortization expense on property and equipment also increased, rising from US$22,909 million in 2021 to US$41,860 million in 2025. Notably, the estimated remaining life of these assets has been adjusted upwards over the same timeframe.

Property and Equipment Growth

The net value of property and equipment increased significantly, with the largest absolute increase occurring between 2024 and 2025 (US$104,360 million). This suggests substantial investment in property, plant, and equipment during this period. The growth rate appears to be accelerating.

Depreciation and Amortization

The increase in depreciation and amortization expense is expected given the growth in the asset base. However, the expense increase did not perfectly correlate with the asset growth, indicating potential changes in the composition of the asset base or depreciation methods. The expense grew by 82.7% over the period, while net PP&E grew by 122.8%.

Estimated Remaining Life

The estimated remaining life of the property and equipment increased from 7 years in 2021, 2022, and 2023 to 8 years in 2024 and then to 9 years in 2025. This lengthening of the estimated useful life could be due to several factors, including improvements in asset maintenance, technological advancements extending asset usability, or a reassessment of depreciation policies. An increase in estimated useful life will reduce annual depreciation expense, all else being equal.

The combination of increasing asset values and increasing estimated remaining life suggests a strategy of significant capital investment coupled with an expectation of long-term asset utilization. Further investigation into the specific nature of these investments and the rationale behind the extended useful life estimates would be beneficial.