PayPal Holdings Inc. (NASDAQ:PYPL)

The financial data reflects a comprehensive overview of property, plant, and equipment over a five-year period, capturing both gross and net values as well as specific asset categories.

Computer equipment and software

This category exhibited consistent growth from $2,664 million in 2018 to $3,380 million in 2022, indicating ongoing investment in technology assets. The increase is steady, with the largest increment occurring between 2019 and 2020.

Internal use software and website development costs

There is a clear upward trend, starting at $2,149 million in 2018 and rising significantly to $3,814 million in 2022. This suggests increased focus on software development and digital capabilities, aligning with modern business practices requiring robust internal software systems.

Land and buildings

Values for land and buildings fluctuate mildly, starting at $408 million and ending at $388 million in 2022, with a notable dip in 2020 to $307 million. The relatively stable but small changes imply limited activity in acquiring or disposing of these fixed assets.

Leasehold improvements

This category shows a declining trend from $420 million in 2018 to $364 million in 2022, suggesting either depreciation outpacing new investments or reduced expenditures in improvements over the period.

Furniture and fixtures

There is irregular movement, with an initial increase from $147 million to $199 million by 2020, followed by a decrease to $141 million in 2022. This pattern may reflect changes in office or operational space usage and asset replacement cycles.

Development in progress and other

This category decreases significantly from $119 million in 2018 to $25 million in 2022, after some minor fluctuations. The sharp decline may indicate either completion of projects or reclassification of in-progress developments into other asset categories.

Property and equipment, gross

The total gross property and equipment consistently increased from $5,907 million to $8,112 million, underscoring sustained capital expenditure and expansion of asset base across the periods.

Accumulated depreciation and amortization

Accumulated depreciation and amortization steadily increased in absolute terms, reflecting the natural consumption and aging of assets, growing from -$4,183 million to -$6,382 million, which is consistent with the growing asset base.

Property and equipment, net

The net property and equipment values demonstrate some variability, starting at $1,724 million, peaking at $1,909 million in 2021, but then declining to $1,730 million in 2022. Despite the rising gross assets, the net figure's decrease in the last year may indicate accelerated depreciation or disposals offsetting additions.

In summary, this data portrays strong and steady investments in technology-related assets, particularly in computer equipment and software development, which dominate the asset composition. Physical assets such as land, buildings, and leasehold improvements remain relatively stable or decline over time. The disparity between gross and net property values highlights increasing depreciation rates or asset disposals, especially evident in the reduction of net values in 2022 despite gross asset growth.

Average Age Ratio

The average age ratio shows a consistent upward trend over the five-year period. Starting at 70.81% in 2018, it increased steadily each year, reaching 78.67% by the end of 2022. This indicates that the property, plant, and equipment (PPE) are progressively aging, with a higher proportion of their useful life being consumed annually.

Estimated Total Useful Life

The estimated total useful life remained constant at 9 years from 2018 through 2021. In 2022, this estimate was revised upwards to 10 years. This adjustment suggests a reassessment of the asset longevity, potentially reflecting improvements in asset maintenance or changes in accounting policies.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets remained consistent at 7 years from 2018 to 2021. In 2022, it increased to 8 years, reflecting the natural passage of time and the aging of the assets in use.

Estimated Remaining Life

The estimated remaining life exhibited a slight decrease from 3 years in 2018 to 2 years in 2019, remaining stable at 2 years through 2022. Despite the total useful life increasing in 2022, the remaining life did not reflect any corresponding increase, which may imply accelerated usage or recognition of the need for asset replacement in the near term.

Accumulated depreciation and amortization

The accumulated depreciation and amortization expenses have consistently increased year-over-year from 2018 to 2022. The figures rose from $4,183 million in 2018 to $6,382 million in 2022, indicating a steady allocation of asset depreciation over time, reflecting both aging asset base and ongoing capital expenditures being depreciated.

Property and equipment, gross

The gross value of property and equipment showed continuous growth throughout the five-year period, increasing from $5,907 million in 2018 to $8,112 million in 2022. This upward trend suggests ongoing investments in property and equipment assets and expansion of the fixed asset base, aligning with company growth and operational scaling.

Average age ratio

The average age ratio progressively increased each year, moving from 70.81% in 2018 to 78.67% in 2022. This signifies that the asset base is aging, with a higher proportion of older assets within the total property and equipment. The steady increase points to either slower asset turnover or longer useful lives being recorded.

Property and equipment, gross

The gross value of property and equipment exhibited a consistent upward trend over the reviewed period. Beginning at 5,907 million USD at the end of 2018, it grew steadily each year, reaching 8,112 million USD by the end of 2022. This indicates ongoing investments or acquisitions in property and equipment assets.

Depreciation and amortization expense

Depreciation and amortization expenses also increased annually, starting from 627 million USD in 2018 and rising to 846 million USD in 2022. The growth in this expense aligns with the increase in the gross property and equipment values, reflecting greater asset base subject to depreciation.

Estimated total useful life

The estimated total useful life of property and equipment remained steady at 9 years from 2018 through 2021. However, there was an increase to 10 years in 2022, which may suggest a reassessment of asset longevity, potentially influenced by changes in asset composition or improvements in asset durability.

Accumulated depreciation and amortization

The accumulated depreciation and amortization increased steadily from $4,183 million in 2018 to $6,382 million in 2022. This consistent upward trend indicates ongoing allocation of the cost of property, plant, and equipment over time, reflecting continuous usage and aging of assets. The growth suggests sustained capital investment or a lengthening asset base subject to depreciation.

Depreciation and amortization expense

The depreciation and amortization expense rose progressively from $627 million in 2018 to $846 million in 2022. This increase in expense aligns with the upward trajectory of accumulated depreciation, implying a rising cost recognized annually, possibly driven by new asset acquisitions or changes in asset mix and lifespan assumptions.

Time elapsed since purchase

The reported time elapsed since purchase remained relatively constant at 7 years from 2018 through 2021, then increased to 8 years in 2022. This stability over four years, followed by an increase, may reflect the aging of the asset base with limited recent acquisition activity or a steady replacement cycle.

Property and Equipment, Net

The net value of property and equipment showed a moderate fluctuation over the analyzed period. Beginning at 1,724 million USD at the end of 2018, it slightly declined to 1,693 million USD in 2019. A rebound occurred in 2020 and 2021, reaching peaks of 1,807 million USD and 1,909 million USD respectively. However, in 2022, the net value decreased again to 1,730 million USD, nearly returning to the initial level observed in 2018. This trend suggests a pattern of investment followed by partial asset reductions or disposals.

Depreciation and Amortization Expense

There is a clear upward trend in depreciation and amortization expenses throughout the period under review. The expense increased steadily each year, starting from 627 million USD in 2018, rising to 701 million USD in 2019, then climbing to 738 million USD in 2020. The escalation continued through 2021 and 2022, with the figures reaching 822 million USD and 846 million USD respectively. This steady increase indicates growing allocation of the cost of property and equipment over their useful lives, possibly reflecting a higher asset base or shorter depreciation periods.

Estimated Remaining Life

The estimated remaining life of property and equipment remained stable at two years from 2019 through 2022, following a decrease from three years in 2018. This suggests that assets are being depreciated over a relatively short time horizon, indicative of either asset composition characterized by technology or equipment with quick obsolescence or an accounting policy favoring accelerated depreciation.