Cisco Systems Inc. (NASDAQ:CSCO)

The analysis of the property, plant, and equipment data over the six-year period reveals several notable trends in the asset composition and valuation.

Land, buildings, and building and leasehold improvements

This category remained relatively stable from 2020 through 2024, fluctuating slightly between US$4,219 million and US$4,304 million. However, there was a noticeable decline in the most recent year, decreasing to US$4,045 million. This suggests a reduction in investment or potential disposals in these assets during the latest period.

Production, engineering, computer, and other equipment and related software

There is a clear downward trend in this category, starting at US$6,038 million in 2020 and declining steadily each year to US$5,178 million by 2025. This continuous decrease may indicate asset aging, depreciation outpacing new acquisitions, or a strategic shift in capital expenditure.

Operating lease assets

Operating lease assets showed a consistent reduction from US$337 million in 2020 to just US$51 million in 2025. This pronounced decline likely reflects changes in leasing strategies, lease expirations, or accounting policy shifts impacting lease asset recognition.

Furniture, fixtures, and other

This category experienced minor fluctuations, initially decreasing from US$387 million in 2020 to US$335 million in 2022, then slightly increasing to US$351 million in 2024 before falling again to US$316 million in 2025. The relatively modest changes suggest stable but limited investment or replacement activity in this asset class.

Gross property and equipment

The total gross property and equipment value declined consistently from US$11,014 million in 2020 to US$9,590 million in 2025. This downward trend highlights a net reduction in capital assets, potentially due to asset sales, less capital expenditure, or technological changes reducing asset requirements.

Accumulated depreciation and amortization

Accumulated depreciation and amortization showed a decreasing negative balance, moving from -US$8,561 million in 2020 to -US$7,477 million in 2025. The reduction in accumulated depreciation suggests a combination of asset disposals or impairment write-offs and a focus on managing depreciation expenses.

Property and equipment, net

Net property and equipment values decreased from US$2,453 million in 2020 to a low of US$1,997 million in 2022, followed by a gradual increase to US$2,113 million by 2025. This pattern indicates initial asset base reduction which somewhat stabilized and slightly recovered in recent years, possibly through selective reinvestments or revaluations.

Overall, the data reflects a strategic contraction or streamlining of assets over the analyzed period, with significant declines in equipment and lease assets and modest reductions in land and buildings. The net asset values showed initial decreases with signs of stabilization, implying adjustments in asset management policies or capital investment approaches.

Average age ratio

The average age ratio exhibits a generally stable trend over the analyzed periods, ranging from 77.73% in 2020 to a slight peak of 80.35% in 2022, followed by a modest decline to 77.97% in 2025. This indicates that the proportion of the asset life that has elapsed remains consistently high, suggesting that the property, plant, and equipment (PP&E) are relatively mature assets with limited new additions or significant disposals over time.

Estimated total useful life

The estimated total useful life of the assets shows minor variation, increasing from 12 years in 2020 to 14 years from 2021 onwards and maintaining this level through 2025. This adjustment might reflect revisions in asset lifespan assumptions or changes in asset composition, potentially due to investments in assets with longer expected usage or improvements in asset maintenance strategies.

Estimated age, time elapsed since purchase

The estimated age remains consistently around 10 to 11 years during the entire period. This stability indicates that the company’s asset base is aging in a steady manner without significant refresh cycles or rapid asset turnover.

Estimated remaining life

The estimated remaining life of the assets remains narrowly between 2 and 3 years across all periods, indicating that the current assets are nearing the end of their useful life. This limited remaining life highlights potential upcoming capital expenditure needs for asset replacement or renewal in the near future.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization show a consistent downward trend over the examined periods, decreasing from 8,561 million USD in July 2020 to 7,477 million USD in July 2025. This steady decline suggests a reduction in the total depreciated value of property, plant, and equipment, potentially indicating asset retirements, disposals, or changes in depreciation methods.

Gross Property and Equipment

Gross property and equipment values exhibit a gradual decline from 11,014 million USD in July 2020 to 9,590 million USD in July 2025. This decrease over five years points toward a reduction in the company's total investment in property and equipment, implying limited new acquisitions or increased asset disposals.

Average Age Ratio

The average age ratio remains relatively stable, fluctuating moderately between 77.73% and 80.35% throughout the periods. This slight variation indicates that the overall age profile of the property and equipment has been maintained, with no significant rejuvenation or aging of the asset base over the five-year span.

Gross Property and Equipment

The gross property and equipment value exhibits a consistent downward trend over the analyzed periods, decreasing from 11,014 million USD in July 2020 to 9,590 million USD in July 2025. This represents a reduction of approximately 12.9% over five years, indicating potential divestment or limited capital expenditure in property and equipment assets.

Depreciation and Amortization Expenses for Property and Equipment

Depreciation and amortization expenses declined from 900 million USD in July 2020 to 700 million USD by July 2025. The expenses showed a notable drop between 2020 and 2021, stabilizing around 700 million USD for the subsequent years. This pattern suggests a reduction in the depreciable asset base or changes in the depreciation method or estimates.

Estimated Total Useful Life

The estimated total useful life of property and equipment increased from 12 years in 2020 to 14 years by 2021 and remained stable thereafter. This increase likely reflects revised assumptions extending the lifespan of assets, which could impact future depreciation charges by reducing annual expense amounts.

Accumulated depreciation and amortization

There is a consistent decrease in accumulated depreciation and amortization over the observed periods, starting from 8,561 million USD in July 2020 and declining steadily to 7,477 million USD in July 2025. This downward trend indicates a reduction in the accumulated depreciation balance on property, plant, and equipment over time.

Depreciation and amortization expenses for property and equipment

The depreciation and amortization expenses exhibit a declining pattern as well. Starting at 900 million USD in July 2020, the expense decreases to 800 million USD in July 2021 and remains stable at 800 million USD in July 2022. Afterwards, the expense further declines and stabilizes at 700 million USD for the years ending July 2023 through July 2025. This suggests a controlled expense recognition or possible changes in asset base or useful life assumptions.

Time elapsed since purchase

The time elapsed since purchase fluctuates slightly, beginning at 10 years in July 2020, increasing to 11 years in July 2021, reverting to 10 years in July 2022, and stabilizing at 11 years from July 2023 through July 2025. This indicates variations or reassessments in asset age calculations over time but generally reflects an aging asset base.

Overall, the data reveals a decreasing accumulated depreciation and amortization balance alongside a reduction in annual depreciation and amortization expenses. The relatively stable time elapsed since purchase indicates that the assets are aging consistently, potentially reflecting fewer new asset acquisitions or disposals. The combination of lower depreciation expenses and reducing accumulated depreciation might suggest changes in asset valuation or a shift in depreciation policies. The trends portray a controlled approach to asset depreciation recognition over the analyzed periods.

Property and Equipment, Net

The net value of property and equipment shows a decreasing trend from 2020 to 2022, dropping from 2,453 million USD to 1,997 million USD. This is followed by a moderate increase from 2022 to 2025, reaching 2,113 million USD. Overall, the value in 2025 remains below the 2020 level, indicating a net reduction over the entire period.

Depreciation and Amortization Expenses for Property and Equipment

Depreciation and amortization expenses decreased consistently from 900 million USD in 2020 to 700 million USD by 2023, and then stabilized at that level through 2025. This suggests either a reduction in depreciable asset base or changes in depreciation policies.

Estimated Remaining Life

The estimated remaining life of property and equipment remained mostly stable around 3 years, except for 2022 where it dropped to 2 years. This temporary decrease may indicate an adjustment in asset life expectations or the recognition of accelerated aging or obsolescence during that specific year.

Summary of Trends

The data indicate a declining net asset base of property and equipment in the first three years, likely reflecting asset disposals, write-downs, or lower investments during that period. The subsequent recovery suggests renewed capital expenditure or asset valuation adjustments. Depreciation expenses decreased notably from 2020 to 2023 and then plateaued, consistent with the shrinking asset base initially followed by stability. The temporary dip in estimated remaining life in 2022 stands out as an unusual event that may warrant further investigation to understand its cause and implications.