Netflix Inc. (NASDAQ:NFLX)

Property, plant, and equipment exhibited significant changes over the five-year period. Overall, a substantial increase in net property, plant, and equipment is observed, driven primarily by growth in buildings and improvements, leasehold improvements, and land. However, the composition of these assets and the rate of growth varied considerably across categories.

Land

The value of land remained relatively stable between 2021 and 2023, fluctuating modestly around US$85,000 thousand. A significant increase is then noted in 2025, reaching US$155,664 thousand, suggesting a substantial land acquisition during that period.

Buildings and Improvements

Buildings and improvements experienced the most dramatic growth. Starting at US$48,123 thousand in 2021, the value increased steadily to US$154,165 thousand in 2023, and then accelerated significantly, reaching US$537,082 thousand in 2025. This indicates substantial investment in building infrastructure.

Leasehold Improvements

Leasehold improvements represent a significant portion of the total property, plant, and equipment. The value increased from US$863,342 thousand in 2021 to US$1,263,051 thousand in 2025, with a slight decrease observed in 2023 before resuming growth. This suggests ongoing investment in leased facilities.

Furniture and Fixtures

Furniture and fixtures showed a moderate increase initially, peaking at US$153,682 thousand in 2022, followed by a decline in 2023 and 2024, before increasing again to US$157,984 thousand in 2025. This suggests potential asset disposals or depreciation outpacing new acquisitions during 2023 and 2024.

Information Technology

Information technology investments fluctuated over the period. After an initial increase from US$380,452 thousand in 2021 to US$442,681 thousand in 2022, the value decreased in 2023 before rising again to US$572,407 thousand in 2025. This indicates ongoing investment in and potential replacement of technology assets.

Corporate Aircraft

The value of corporate aircraft remained relatively stable throughout the period, decreasing slightly from US$110,978 thousand in 2021 to US$99,164 thousand in 2025. This suggests limited investment or disposal activity in this asset category.

Machinery and Equipment

Machinery and equipment experienced a decrease from US$32,426 thousand in 2021 to US$10,334 thousand in 2023, followed by a recovery to US$30,879 thousand in 2025. This suggests potential asset disposals or a shift in operational focus during the earlier part of the period, followed by reinvestment.

Capital Work-in-Progress

Capital work-in-progress fluctuated significantly, peaking at US$406,492 thousand in 2023 before decreasing to US$285,010 thousand in 2025. This indicates varying levels of ongoing construction or asset development projects.

Accumulated Depreciation

Accumulated depreciation increased consistently throughout the period, from US$616,306 thousand in 2021 to US$1,096,891 thousand in 2025. This is expected given the overall increase in the gross value of property, plant, and equipment, and reflects the ongoing consumption of the economic benefits of these assets.

The net effect of these changes is a substantial increase in net property, plant, and equipment, rising from US$1,323,453 thousand in 2021 to US$2,004,350 thousand in 2025. The growth is primarily attributable to significant investments in buildings and improvements and leasehold improvements, indicating a strategic focus on expanding physical infrastructure and leased facilities.

The average age ratio exhibits a generally stable pattern over the five-year period, with a slight increasing trend followed by a minor decrease in the most recent year. This suggests a consistent approach to asset management, with a gradual accumulation of asset age initially, then a potential shift towards renewal or replacement.

Average Age Ratio Trend

The average age ratio increased from 33.18% in 2021 to 37.81% in 2023, representing a cumulative increase of 4.63 percentage points. This indicates that, on average, the company’s property, plant, and equipment were becoming older during this period.

The ratio remained relatively constant between 2023 and 2024, holding at 37.82%. This stabilization could be due to a pause in significant asset additions or disposals.

A slight decrease to 37.24% was observed in 2025. While modest, this reduction may signal the beginning of a trend towards newer assets, potentially through increased capital expenditure on replacements or upgrades.

The observed pattern suggests a potential lifecycle management strategy for property, plant, and equipment. The initial increase in the average age ratio may reflect a period of utilizing existing assets, followed by a period of maintaining that age profile, and a possible move towards asset renewal in the latest year. Further investigation into capital expenditure and asset disposal patterns would be necessary to confirm this interpretation.

Implications of Stability

The sustained average age ratio between 2023 and 2024 suggests a consistent level of investment in maintaining existing assets, without substantial additions or retirements that would significantly alter the age profile.

Potential Future Trends

The slight decline in 2025 warrants monitoring. Continued decreases in the average age ratio in subsequent years would indicate a more proactive approach to asset replacement and modernization.

An examination of the financial information reveals increasing investment in property and equipment alongside a consistent pattern in accumulated depreciation and average age. Gross property and equipment values demonstrate a consistent upward trajectory throughout the period, increasing from US$1,939,759 thousand in 2021 to US$3,101,241 thousand in 2025. Accumulated depreciation also increased steadily, rising from US$616,306 thousand in 2021 to US$1,096,891 thousand in 2025, indicating ongoing utilization and the passage of time affecting the asset base.

Gross Property and Equipment

The value of gross property and equipment increased each year, with the largest absolute increase occurring between 2024 and 2025 (US$589,948 thousand). This suggests a period of significant capital expenditure during that timeframe. The rate of increase appears to have accelerated in recent years.

Accumulated Depreciation

Accumulated depreciation consistently rose over the five-year period. The increase between 2024 and 2025 (US$179,354 thousand) was notably smaller than the increase in gross property and equipment, suggesting that newer assets were added at a faster rate than older assets were fully depreciated.

Land

The value of land remained relatively stable between 2021 and 2024, at approximately US$85,000 thousand. However, a substantial increase is observed in 2025, reaching US$155,664 thousand, indicating a significant land acquisition during that year.

Average Age Ratio

The average age ratio remained remarkably stable, fluctuating between 33.18% and 37.82% throughout the period. The ratio peaked at 37.81% and 37.82% in 2023 and 2024 respectively, before decreasing slightly to 37.24% in 2025. This consistency suggests a balanced approach to asset replacement and depreciation, maintaining a relatively constant age profile of the property and equipment base. The stability of this ratio, despite significant additions to gross property and equipment, implies that new assets are being added in a manner that does not dramatically shift the overall average age.

In summary, the financial information indicates a company actively investing in its property and equipment, with a consistent depreciation pattern and a stable average age ratio. The substantial increase in both gross property and equipment and land values in 2025 warrants further investigation to understand the specific nature of these investments.