Analysis of Property, Plant and Equipment
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- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Debt
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Property, Plant and Equipment Disclosure
Netflix Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the property, plant, and equipment data over the period reveals several notable trends and shifts in asset composition and valuation.
- Land
- The value of land increased significantly from 50,700 thousand US dollars in 2020 to 85,005 thousand in 2022 and then remained stable through 2024, indicating acquisition or revaluation up to 2022 with a plateau thereafter.
- Buildings and Improvements
- This category showed a steady increase from 42,717 thousand in 2020 to 52,106 thousand in 2022, followed by a substantial jump to 154,165 thousand in 2023 and an even larger increase to 475,684 thousand in 2024. This suggests major investments or reclassifications in these years.
- Leasehold Improvements
- Leasehold improvements experienced sustained growth, rising from 524,537 thousand in 2020 to a peak of 1,040,570 thousand in 2022, after which the value slightly declined but remained high around 1,026,000 thousand through 2024, reflecting continued but stabilizing investment in leased assets.
- Furniture and Fixtures
- The value of furniture and fixtures increased moderately from 110,185 thousand in 2020 to a high point of 153,682 thousand in 2022, followed by a gradual decrease to 134,987 thousand by 2024, indicating some disposals or depreciation outpacing additions in later years.
- Information Technology
- Investment in information technology assets showed a consistent upward trajectory from 283,014 thousand in 2020 to 442,681 thousand in 2022. A slight decline to 414,092 thousand occurred in 2023, followed by a resurgence to 446,419 thousand in 2024, reflecting ongoing upgrades and replacements.
- Corporate Aircraft
- Values remained relatively stable, with a small increase from 110,629 thousand in 2020 to 115,578 thousand in 2022, then a reduction to 99,175 thousand from 2023 onwards, possibly due to partial disposals or impairments.
- Machinery and Equipment
- There was a steady decline in machinery and equipment values from 34,633 thousand in 2020 to 10,334 thousand in 2023, with a slight recovery to 15,135 thousand in 2024. This trend indicates significant asset disposals or shifts in operational focus away from machinery.
- Capital Work-in-Progress
- The amount of capital work-in-progress decreased from 298,558 thousand in 2020 to 235,555 thousand in 2022, then rose sharply to 406,492 thousand in 2023 before falling back to 228,300 thousand in 2024. This suggests fluctuating levels of ongoing capital projects, with a peak in 2023 possibly signaling a major build phase.
- Property and Equipment, Gross
- The gross property and equipment balance demonstrated continuous growth from 1,454,973 thousand in 2020 to 2,511,293 thousand in 2024, indicating sustained capital expenditure and asset additions over this period.
- Accumulated Depreciation
- Accumulated depreciation also rose steadily in magnitude from -494,790 thousand in 2020 to -917,537 thousand in 2024, consistent with asset aging and usage, and reflecting the increasing gross asset base.
- Property and Equipment, Net
- Net property and equipment increased from 960,183 thousand in 2020 to 1,593,756 thousand in 2024. The net growth, although positive, was more moderate compared to gross asset growth, due to corresponding increases in accumulated depreciation.
Overall, the data indicate strategic investments predominantly in buildings and leasehold improvements, alongside steady enhancements in information technology. The fluctuations in capital work-in-progress and machinery reflect dynamic project activity and asset utilization adjustments. The rising accumulated depreciation aligns with the growth in asset base and operational use over the years.
Asset Age Ratios (Summary)
Netflix Inc., asset age ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The average age ratio of property, plant, and equipment demonstrates a fluctuating yet overall increasing trend over the observed five-year period. Initially, the ratio declined from 35.23% at the end of 2020 to 33.18% in 2021, indicating a temporary reduction in the average age of assets, possibly due to acquisitions of newer assets or disposals of older ones.
Subsequently, the average age ratio increased steadily from 33.18% in 2021 to 37.82% by the end of 2024. This upward trend over the last three years suggests an aging asset base, with assets being held longer before replacement or the acquisition of new assets not keeping pace with asset retirements.
The plateauing of the ratio between 2023 and 2024, with a minimal change from 37.81% to 37.82%, may imply stabilization in the aging profile of the property, plant, and equipment during the most recent year.
- Summary of Trend
- Initial decrease in average asset age followed by a consistent increase, culminating in near stabilization.
- Implications
- The aging asset base could impact maintenance costs and operational efficiency, necessitating potential management focus on asset renewal strategies.
- Insight
- The company may need to evaluate its investment in new property, plant, and equipment to balance the asset age and maintain operational effectiveness.
Average Age
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, gross – Land)
= 100 × ÷ ( – ) =
The analysis of the annual property, plant, and equipment financial data reveals several noteworthy trends over the five-year period.
- Property and equipment, gross
- The gross value of property and equipment steadily increased each year from US$1,454,973 thousand in 2020 to US$2,511,293 thousand in 2024. This consistent growth indicates ongoing investments in the company's fixed assets, suggesting expansion or upgrades in physical infrastructure.
- Accumulated depreciation
- Accumulated depreciation also increased each year, rising from US$494,790 thousand in 2020 to US$917,537 thousand in 2024. The continuous increase reflects the aging and usage of the company's assets over time, consistent with the growing asset base. The rate of increase in accumulated depreciation appears to be somewhat proportional to the increase in gross property and equipment values.
- Land
- The value of land increased significantly from US$50,700 thousand in 2020 to US$82,381 thousand in 2021, followed by marginal increases reaching US$85,000 thousand in 2023 and remaining stable through 2024. This pattern suggests an acquisition or revaluation of land assets primarily occurring between 2020 and 2021, with stability thereafter.
- Average age ratio
- The average age ratio fluctuated within a narrow range, starting at 35.23% in 2020, decreasing to 33.18% in 2021, before rising to 37.82% by 2024. This indicates a modest increase in the relative age of the asset base over time, suggesting that despite continuous asset additions, the proportion of older assets is slightly increasing. The dip in 2021 might be related to substantial asset acquisitions or replacements reducing the average age temporarily.
Overall, the company exhibits a pattern of steady investments in property and equipment, with corresponding increases in accumulated depreciation. Land holdings showed a notable increase early in the period, then stabilized. The average age of assets reflects a gradual aging trend, aligning with consistent capital expenditures but indicating some aging in the fixed asset base over time.