Autodesk Inc. (NASDAQ:ADSK)

The financial data on property, plant, and equipment reveals several notable trends over the six-year period ending January 31, 2024.

Computer hardware, at cost

This category exhibits a consistent downward trend, declining from 190 million US dollars in early 2019 to 117 million US dollars by early 2024. The steady reduction suggests a pattern of asset disposals, write-downs, or reduced investment in physical computer hardware.

Computer software, at cost

The value of computer software, at cost, also shows a gradual decrease, moving from 67 million US dollars in 2019 to 48 million US dollars in 2024. This decline, although less steep than hardware, may indicate amortization effects or minimal new capitalized software expenditures.

Furniture and equipment, at cost

Contrasting with hardware and software, furniture and equipment values have increased steadily from 67 million US dollars in 2019 to 100 million US dollars in 2024. This upward trend points to ongoing investments or acquisitions in this asset category.

Leasehold improvements, land and buildings, at cost

The cost for leasehold improvements and related real estate assets expanded significantly from 248 million US dollars in 2019 to a peak of 363 million US dollars in 2023, followed by a slight decrease to 357 million US dollars in 2024. Overall, this indicates substantial capital expenditures have been made in this area, with minor recent reductions potentially due to disposals or reclassifications.

Total computer equipment, software, furniture, and leasehold improvements, at cost

The aggregate cost basis of these asset classes showed moderate growth from 572 million US dollars in 2019 to a high of 636 million US dollars in 2021 and 2022, then experiencing small declines to 622 million US dollars by 2024. This suggests a stabilization and slight consolidation in investment levels after a phase of expansion.

Accumulated depreciation

Accumulated depreciation has consistently increased in absolute value each year, rising from -422 million US dollars in 2019 to -501 million US dollars in 2024. This steady increase reflects ongoing consumption and aging of the fixed asset base over time.

Net book value of computer equipment, software, furniture, and leasehold improvements

The net book value peaked at 193 million US dollars in 2021 but thereafter declined to 121 million US dollars by 2024. This decline is attributable to slower asset additions relative to depreciation charges, signaling a reduction in the net carrying value of fixed assets in recent years.

In summary, the data indicates a strategic shift with reductions in computer hardware and software costs, counterbalanced by increased spending on furniture, equipment, and leasehold improvements. Despite relatively stable total asset cost in recent years, the consistent rise in accumulated depreciation and resulting decline in net asset value point to an aging asset base with limited fresh capital investment to offset depreciation fully.

Average Age Ratio

The average age ratio exhibits a generally increasing trend over the analyzed period, rising from 73.82% in 2019 to 80.55% in 2024. This indicates that the property, plant, and equipment (PP&E) assets are aging progressively, reflecting a higher proportion of the assets' useful life having been consumed as time advances.

Estimated Total Useful Life

There is a noticeable gradual increase in the estimated total useful life, from 10 years in 2019 to 13 years by 2023 and 2024. This suggests that either asset longevity assumptions have been revised upwards or newer asset acquisitions have longer expected lifespans, contributing to extended usage periods for the company's PP&E.

Estimated Age, Time Elapsed Since Purchase

The estimated age steadily increases each year, reflecting the natural aging of assets on the books. Starting at 7 years in 2019, the metric advances by approximately one year annually, reaching 11 years in 2024. This progression is consistent with assets being held and used over an extended duration without substantial early retirements or replacements.

Estimated Remaining Life

The estimated remaining life remains relatively stable, fluctuating between 3 and 4 years throughout the period. Despite the increase in total useful life and aging assets, the remaining life does not exhibit significant upward or downward trends, suggesting a balanced replacement or refurbishment cycle maintaining a steady asset lifespan outlook.

Accumulated Depreciation

The accumulated depreciation amount demonstrates a consistent upward trajectory over the six-year period. Starting at $422 million in January 2019, the figure experienced a slight dip in 2020 to $415 million before increasing steadily each subsequent year to reach $501 million in January 2024. This indicates ongoing depreciation of assets, reflecting either regular use or aging of the property, plant, and equipment assets.

Computer Equipment, Software, Furniture, and Leasehold Improvements at Cost

The cost basis for computer equipment, software, furniture, and leasehold improvements showed moderate fluctuation. It began at $572 million in January 2019, rising to $577 million in January 2020, and then saw a notable increase to $636 million in January 2021. The cost remained relatively stable from 2021 to 2023, with a slight decrease to $622 million by January 2024. This pattern suggests periodic investments in these asset categories, followed by a phase of limited capital expenditure or asset disposal.

Average Age Ratio

The average age ratio, which reflects the aging of the asset base relative to its cost, trended upward over the reported years. It decreased slightly from 73.82% in 2019 to 69.66% in 2021, implying a relatively younger asset base during that period, potentially due to new acquisitions. However, from 2021 onward, the ratio increased markedly to 80.55% in 2024, indicating an aging asset pool. This could suggest fewer new asset additions or increased retention of older assets.

Summary

Overall, the data depicts a scenario where accumulated depreciation steadily rises, and the asset cost base grows moderately with some fluctuation. The initial decrease and subsequent increase in the average age ratio imply an initial period of asset renewal followed by aging of the asset base. The combination of these trends may suggest a shift towards reduced capital expenditure in recent years, leading to an older property, plant, and equipment structure.

Cost of Property, Plant, and Equipment

The cost associated with computer equipment, software, furniture, and leasehold improvements demonstrated a gradual increase from 2019 to 2021, rising from 572 million US dollars to a peak of 636 million in 2021 and 2022. Following this peak, a slight decline is observable in 2023 and 2024, with values decreasing to 632 million and 622 million respectively. This indicates a period of investment followed by stabilization or minor asset disposals.

Depreciation Expense

The annual depreciation expense showed a declining trend over the analyzed periods. Starting at 59 million US dollars in 2019, it decreased to 51 million by 2020 and remained steady in 2021. Minor fluctuations occurred thereafter, with amounts between 47 million and 52 million from 2022 through 2024. This reduction suggests either slower depreciation charges due to asset aging or changes in asset composition with possibly longer useful lives.

Estimated Total Useful Life

The estimated useful life of the assets increased steadily over the years, beginning at 10 years in 2019 and advancing to 13 years by 2023 and 2024. This upward adjustment indicates a reassessment towards longer service lifespans for the capital assets, which may contribute to the observed decrease in depreciation expense despite relatively stable cost bases.

Overall Analysis

The data reflects a cautious upward revision in asset longevity alongside a stable investment in property, plant, and equipment, followed by a slight reduction in capital costs. The consistent increase in estimated useful life correlates with the decline in depreciation expense, highlighting potentially improved asset efficiency or updated accounting estimates. These factors collectively suggest a strategic approach to managing fixed assets with attention to cost control and asset utilization.

Accumulated Depreciation

The accumulated depreciation shows a consistent upward trend from 2019 through 2024, increasing from $422 million to $501 million. This steady rise reflects ongoing depreciation charges over the years, indicating continuous use and aging of property, plant, and equipment assets.

Depreciation Expense

The depreciation expense exhibits a gradual decline over the analyzed period. Starting at $59 million in 2019, it decreases modestly to $47 million by 2024. This reduction suggests a possible slowing in the addition of new depreciable assets or changes in the depreciation methods or asset mix, resulting in lower annual charges despite the aging asset base.

Time Elapsed Since Purchase

The time elapsed since purchase increased steadily from 7 years in 2019 to 11 years in 2024. This reflects a maturing property, plant, and equipment portfolio, consistent with the observed increase in accumulated depreciation and the slight decline in depreciation expense.

Computer equipment, software, furniture, and leasehold improvements, net

There is a fluctuating trend in the net value of computer equipment, software, furniture, and leasehold improvements over the observed period. It increased from 150 million US dollars in 2019 to a peak of 193 million in 2021. However, after 2021, the value declined steadily to 121 million by 2024, indicating a reduction in the net carrying amount of these assets.

Depreciation expense

The depreciation expense shows a general decreasing trend from 59 million US dollars in 2019 to 47 million in 2024. This reduction suggests either lower asset additions subject to depreciation or a shift in depreciation methods or useful lives that results in less expense recognized annually.

Estimated remaining life

The estimated remaining life of the assets has remained relatively stable around 3 years throughout the period, except for a noted increase to 4 years in 2021. This slight variation might reflect changes in asset composition or reassessment of asset longevity during that year, followed by a return to the original estimate subsequently.