Booking Holdings Inc. (NASDAQ:BKNG)

The analysis of the annual property, plant, and equipment data reveals several notable trends over the five-year period.

Capitalized software

There is a consistent upward trend in capitalized software expenditures, increasing from $565 million at the end of 2020 to $1,249 million by the end of 2024. This almost more than doubles the initial amount, indicating significant ongoing investment in software development and technology assets.

Computer equipment

The computer equipment category shows some fluctuation. It slightly decreased from $746 million in 2020 to $728 million in 2021, then modestly increased to $758 million in 2022. However, it subsequently declined to $608 million in 2023 before recovering to $694 million in 2024. Overall, the values fluctuate around a mid-700 million range initially but decline and partially recover later, indicating possible cycles of equipment replacement or technology refreshes.

Leasehold improvements

Leasehold improvements exhibit a gradual decline over the period, moving from $278 million in 2020 down to $216 million in 2024. The decrease is steady, suggesting reduced investments or amortization exceeding new improvements.

Office equipment, furniture and fixtures

This category shows relatively minor fluctuations, with values ranging narrowly between $58 million and $71 million. There is no clear upward or downward trend, reflecting stable expenditure or inventory levels.

Building construction-in-progress

Building construction-in-progress increased from $257 million in 2020 to $328 million in 2021, but no data is available for subsequent years. The initial increase could represent active development projects, but the absence of later data prevents trend analysis beyond this point.

Property and equipment, gross

The gross value of property and equipment rises from $1,909 million in 2020 to $2,224 million in 2024, albeit with a slight dip in 2022 and 2023. The general trend suggests growth in the company's total fixed asset base, primarily driven by increased capitalized software and other asset additions.

Accumulated depreciation

Accumulated depreciation increases in magnitude from -$1,153 million in 2020 to -$1,392 million in 2024, except for a noticeable reduction in 2023. This increase indicates ongoing depreciation expense but the 2023 reduction might reflect asset disposals or accounting adjustments.

Property and equipment, net

The net property and equipment value shows variability: increasing from $756 million in 2020 to $822 million in 2021, dropping significantly to $669 million in 2022, then rising again to $784 million in 2023 and $832 million in 2024. This volatility suggests changes in asset acquisitions, disposals, depreciation rates, or revaluations affecting net book value.

In summary, the company demonstrates a robust commitment to capitalized software, a key driver of asset growth. Physical asset categories like computer equipment and leasehold improvements exhibit more moderate or declining trends. The accumulated depreciation data points to steady asset aging with some irregularities in recent years. Net property and equipment values reflect fluctuations consistent with investment cycles and asset management practices.

Average Age Ratio

The average age ratio of property, plant, and equipment exhibited moderate fluctuation over the analyzed periods. Starting at 60.4% in 2020, the ratio increased to a peak of 66.43% in 2022, indicating an aging asset base during this time. Subsequently, there was a decline to 60.86% in 2023, followed by a slight increase to 62.59% in 2024. Overall, the trend suggests a partial refresh or replacement of assets after 2022, though the average age ratio remains relatively elevated.

Estimated Total Useful Life

The estimated total useful life of the assets showed variability, initially increasing from 7 years in 2020 to 9 years in 2022, which could indicate expectations of longer asset longevity or changes in asset composition. However, after 2022, there was a decline to 7 years in 2023 and further down to 6 years in 2024. This downward shift may reflect reassessments of asset durability or changes in technology impacting the useful life estimates.

Estimated Age (Time Elapsed Since Purchase)

The estimated asset age increased steadily from 4 years in 2020 to 6 years in 2022, consistent with the passage of time and the aging of assets without significant replacement. A noteworthy reduction occurred in 2023 and 2024, with the estimated age dropping back to 4 years in both years. This reduction signals the addition of newer assets or asset turnover within the period.

Estimated Remaining Life

The estimated remaining life of assets remained relatively stable at 3 years from 2020 through 2023, suggesting consistent expectations for asset depreciation or replacement timing. However, in 2024, it decreased to 2 years, indicating that the assets are nearing the end of their useful life or that the company is adjusting its depreciation outlook downward.

Property and Equipment, Gross

Over the analyzed period, the gross value of property and equipment shows a general upward trend. Starting from US$1,909 million at the end of 2020, it increased to US$2,127 million by the end of 2021. There was a slight decrease in 2022 to US$1,993 million, followed by a marginal rise to US$2,003 million in 2023, and then a more notable increase to US$2,224 million by the end of 2024. This pattern suggests overall investment in property and equipment assets, with a minor fluctuation in 2022.

Accumulated Depreciation

The accumulated depreciation reflects an irregular pattern across the periods. It rose from US$1,153 million at the end of 2020 to US$1,305 million in 2021, continuing to increase slightly to US$1,324 million in 2022. However, a decline to US$1,219 million was observed in 2023, before rising again to US$1,392 million in 2024. This fluctuation indicates periods of increased depreciation expense followed by some reduction, possibly due to asset disposals or revisions in depreciation methods.

Average Age Ratio

The average age ratio displays variability, starting at 60.4% at the end of 2020 and increasing to 61.35% in 2021. It peaks at 66.43% in 2022, indicating an aging asset base during that year. The ratio then decreases to 60.86% in 2023 and rises slightly again to 62.59% in 2024. These changes imply fluctuations in the aging of property and equipment, which could reflect timing of asset acquisitions, disposals, or depreciation expense impacts.

Summary Insights

The data indicates that the company has maintained a generally increasing level of investment in property and equipment over the analyzed period, despite some volatility. The accumulated depreciation does not follow a consistent upward trend, suggesting asset management activities such as disposals or changes in depreciation approaches. The average age ratio’s fluctuations imply that the asset portfolio's age has not followed a steady pattern, possibly affecting maintenance or replacement strategies. The interplay between these metrics signals active asset management within the company’s property and equipment segment.

Property and equipment, gross

The gross value of property and equipment demonstrated variability over the five-year period. It increased from 1,909 million US dollars at the end of 2020 to 2,127 million US dollars by the end of 2021, followed by a decline to 1,993 million in 2022. Subsequently, it showed a slight rise to 2,003 million in 2023 and further increased to 2,224 million in 2024. This pattern indicates periods of both asset acquisitions and disposals or impairments, with an overall upward trend when comparing the start and end of the period.

Depreciation expense

The depreciation expense has exhibited a fluctuating trend. Beginning at 291 million US dollars in 2020, it decreased over the next two years to 259 million in 2021 and 227 million in 2022. However, it reversed direction with a notable increase to 282 million in 2023 and further surged to 370 million in 2024. This suggests changes in the depreciation policies, asset composition, or acceleration of asset write-downs during the latter years.

Estimated total useful life

The estimated total useful life of the property and equipment progressed from 7 years in 2020 to a gradual increase reaching 9 years in 2022. This estimate then declined sharply to 7 years in 2023 and further to 6 years in 2024. The downward movement in estimated useful life towards the end of the period could explain the rising depreciation expense, indicating that assets are being depreciated over shorter timeframes, potentially reflecting changes in asset usage or revisions in management’s assumptions regarding asset longevity.

Accumulated Depreciation

The accumulated depreciation exhibits a fluctuating pattern over the analyzed periods. It increased consistently from 1153 million US dollars in 2020 to 1305 million in 2021, reflecting ongoing asset aging and usage. The growth slowed in 2022, reaching 1324 million, followed by a notable decline to 1219 million in 2023, which may indicate asset disposals or revaluations. In 2024, there is a sharp increase to 1392 million, suggesting accelerated asset depreciation or additions of depreciable assets since the prior year.

Depreciation Expense

Depreciation expense shows a general downward trend from 291 million US dollars in 2020 to 227 million in 2022, suggesting a reduction in the charge related to asset wear or possibly changes in asset composition. However, this trend reverses in 2023, with depreciation expense rising to 282 million, and again sharply increasing to 370 million in 2024. This recent acceleration could be linked to either shorter useful lives for certain assets, increased capital expenditures in prior years, or strategic changes in depreciation methods.

Time Elapsed Since Purchase

The average time elapsed since the purchase of property, plant, and equipment moved steadily from 4 years in 2020 to 6 years in 2022, indicating a maturing asset base. In 2023 and 2024, the metric resets to 4 years, implying substantial acquisition of newer assets or replacement of older ones within these recent periods. This pattern aligns with the depreciation expense increase observed, as newer assets typically carry higher depreciation rates initially.

Property and Equipment, Net

The net value of property and equipment fluctuates over the observed periods. It increased from $756 million at the end of 2020 to $822 million in 2021, then declined notably to $669 million in 2022. Following this decline, it rose again to $784 million in 2023 and further to $832 million by the end of 2024. This suggests a cycle of asset additions and disposals or impairments, with the asset base ultimately expanding by 2024 compared to the initial value in 2020.

Depreciation Expense

Depreciation expense shows a general downward trend initially, decreasing from $291 million in 2020 to $227 million in 2022. However, from 2022 onwards, depreciation expense increased sharply, reaching $282 million in 2023 and peaking at $370 million in 2024. The sharp rise in depreciation expense in 2024 could be linked to changes in asset composition or revised depreciation policies.

Estimated Remaining Life

The estimated remaining life of the assets was stable at 3 years from 2020 through 2023. In 2024, it declined to 2 years, indicating either an accelerated depreciation schedule or that the asset base consists of newer assets with shorter remaining useful lives. This reduction aligns with the noticeable increase in depreciation expense in 2024.