Analysis of Property, Plant and Equipment
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- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Property, Plant and Equipment Disclosure
Fair Isaac Corp., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
- Data processing equipment and purchased software
- The value decreased steadily from 110,874 thousand US dollars in 2019 to 69,928 thousand in 2023, indicating a consistent reduction over this period. A slight increase to 74,084 thousand was observed in 2024, suggesting a potential reversal or investment in this category after several years of decline.
- Internal-use software
- This category shows no values prior to 2024, where it is recorded at 16,510 thousand US dollars. The data implies either the initiation of capitalization for internal-use software in 2024 or a change in accounting policy or reporting practices.
- Office furniture and equipment
- There is a continuous downward trend from 21,443 thousand US dollars in 2019 to 9,473 thousand in 2024. This decline reflects ongoing asset disposals, depreciation exceeding additions, or both.
- Leasehold improvements
- Values have decreased from 33,360 thousand US dollars in 2019 to 15,851 thousand in 2024. The steady decline suggests amortization of improvements without significant reinvestment or addition of new leasehold assets.
- Equipment under capital lease
- Values are recorded in 2019 and 2020 only, at 6,398 and 6,489 thousand US dollars respectively, with no subsequent data. This may indicate the expiration or settlement of capital leases or reclassification of these assets.
- Property and equipment, gross
- A notable decrease from 172,075 thousand US dollars in 2019 to 98,967 thousand in 2023 is observed, indicating overall asset reduction. However, an increase to 115,918 thousand in 2024 suggests acquisitions, reclassifications, or capitalization of new assets, including the addition of internal-use software.
- Accumulated depreciation and amortization
- The accumulated depreciation decreased in intensity from -119,048 thousand US dollars in 2019 to -77,453 thousand in 2024. Typically, accumulated depreciation is a negative balance increasing in absolute terms. The reduction in the negative balance could be explained by asset disposals or impairments partially offsetting depreciation.
- Property and equipment, net
- There is a sharp decline in net property and equipment from 53,027 thousand US dollars in 2019 to 10,966 thousand in 2023, showing a significant erosion in net asset value. The notable recovery to 38,465 thousand in 2024 aligns with the gross asset increase and introduction of internal-use software, indicating renewed investment in tangible and intangible assets.
Asset Age Ratios (Summary)
Fair Isaac Corp., asset age ratios
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
- Average Age Ratio
- The average age ratio showed a generally increasing trend from September 2019 to September 2023, rising from 69.18% to a peak of 88.92%. This indicates that, over these years, the property, plant, and equipment have aged progressively. However, a notable decrease to 66.82% is observed by September 2024, suggesting a significant renewal or replacement of assets in the latest year.
- Estimated Total Useful Life
- The estimated total useful life of the assets remained stable at 7 years from 2019 to 2020. It then slightly decreased to 6 years in 2021, returned to 7 years in 2022, and experienced a substantial increase thereafter, reaching 10 years in 2023 and extending further to 12 years in 2024. This change indicates a reassessment or shift in the expected longevity of the company's assets, consistent with either enhancements in asset quality or changes in asset composition.
- Estimated Age, Time Elapsed Since Purchase
- The estimated age of the assets remained constant at 5 years for the first three periods from 2019 to 2021. A gradual increase followed, rising to 6 years in 2022, then a marked increase to 9 years in 2023, before slightly decreasing to 8 years in 2024. This pattern suggests the acquisition of older assets or slower turnover around 2023, with a somewhat younger asset base by 2024.
- Estimated Remaining Life
- The estimated remaining life of the assets was relatively short and steady at 1 to 2 years from 2019 through 2023, mostly at 1 year, reflecting aging assets nearing the end of their expected useful life. By 2024, the remaining life increased notably to 4 years, which aligns with the increase in total estimated useful life and the decrease in average age ratio, confirming a renewal or extension of asset life.
Average Age
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
2024 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, gross
= 100 × ÷ =
- Accumulated Depreciation and Amortization
- There is a clear downward trend in accumulated depreciation and amortization over the six-year period. The value decreased from $119,048 thousand in 2019 to $77,453 thousand in 2024. This decline suggests either a reduction in depreciable assets or changes in depreciation methods and schedules applied.
- Property and Equipment, Gross
- Gross property and equipment values experienced fluctuations, beginning at $172,075 thousand in 2019, declining each year to reach a low of $98,967 thousand in 2023, followed by an increase to $115,918 thousand in 2024. The overall decline from 2019 through 2023 indicates asset disposals, impairments, or limited new investments during this period. The rise in 2024 may signal renewed investment or acquisitions of assets.
- Average Age Ratio
- The average age ratio shows a general upward trend from 69.18% in 2019 to a peak of 88.92% in 2023, indicating an aging asset base over the years. However, in 2024, there is a marked decline to 66.82%, suggesting a significant renewal or replacement of older assets during this final year, which aligns with the observed increase in gross property and equipment.
- Summary of Trends
- Over the observed period, the asset base appears to have aged and decreased in gross value until 2023, reflected by rising average age ratios and falling gross property values. Accumulated depreciation decreased consistently, aligning with the reduction in asset base or changes in accounting treatment. The year 2024 has indications of asset rejuvenation, with a reduction in average age ratio and an increase in gross property and equipment, pointing to possible capital expenditures or asset acquisitions aimed at modernizing the property and equipment portfolio.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
2024 Calculations
1 Estimated total useful life = Property and equipment, gross ÷ Depreciation and amortization on property and equipment
= ÷ =
- Property and Equipment, Gross
- There is a noticeable downward trend in the gross value of property and equipment from September 30, 2019, to September 30, 2023, decreasing from $172,075 thousand to $98,967 thousand. However, in the most recent period ending September 30, 2024, this value increased to $115,918 thousand, indicating a partial recovery or reinvestment in property and equipment assets.
- Depreciation and Amortization on Property and Equipment
- The depreciation and amortization expense steadily declined over the years, decreasing from $24,200 thousand in 2019 to $9,400 thousand in 2024. This consistent reduction suggests either a slowdown in asset aging or changes in depreciation policies.
- Estimated Total Useful Life
- The estimated total useful life of property and equipment remained relatively stable at about 7 years from 2019 through 2022. However, beginning in 2023, it increased significantly, first to 10 years and then to 12 years in 2024. This change likely reflects revisions in asset lifespan assumptions, either due to new asset acquisitions with longer useful lives or reassessment of existing assets.
- Overall Analysis
- The combination of a decreasing gross asset base until 2023, coupled with declining depreciation expense, indicates that the company may have been divesting or fully depreciating older assets. The subsequent increase in asset value in 2024, aligned with the extended useful life estimates, points to recent capital investments or revaluation efforts that extend the productive period of property and equipment. This adjustment in useful life also explains the reduced depreciation charges, as costs are spread over a longer period.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
2024 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization on property and equipment
= ÷ =
- Accumulated depreciation and amortization
- The accumulated depreciation and amortization decreased consistently from 119,048 thousand USD in 2019 to 77,453 thousand USD in 2024. This downward trend suggests a reduction in the book value of property, plant, and equipment, possibly due to asset disposals, write-offs, or changes in accounting estimates. The decline is fairly steady across the periods, indicating ongoing adjustments over time.
- Depreciation and amortization expense
- The annual depreciation and amortization expense also showed a clear decreasing trend over the six-year period. Starting at 24,200 thousand USD in 2019, the expense dropped to 9,400 thousand USD by 2024. This significant reduction may reflect older assets nearing the end of their useful lives, lower capital expenditures on new assets, or changes in depreciation policies. The most notable decreases occurred between 2021 and 2024, with expenses nearly halving from 20,300 to 9,400 thousand USD in this timeframe.
- Time elapsed since purchase
- The average elapsed time since asset purchase increased from 5 years in 2019 through 2021 to 8–9 years in the later periods. This finding aligns with the declining depreciation expense, as older assets typically incur lower annual depreciation. The increase suggests a potential slowdown in acquiring new property and equipment or retaining assets longer in service.
Estimated Remaining Life
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
2024 Calculations
1 Estimated remaining life = Property and equipment, net ÷ Depreciation and amortization on property and equipment
= ÷ =
- Property and Equipment, Net
- The net value of property and equipment demonstrates a fluctuating downward trend from 2019 through 2023, declining significantly from 53,027 thousand USD in 2019 to 10,966 thousand USD in 2023. However, a notable rebound occurs in 2024 with an increase to 38,465 thousand USD, indicating potential capital investment or asset additions during the final period analyzed.
- Depreciation and Amortization on Property and Equipment
- Depreciation and amortization expenses decline steadily over the six-year horizon, starting at 24,200 thousand USD in 2019 and decreasing to 9,400 thousand USD by 2024. This consistent decrease reflects the reduction in the net book value of the property and equipment and possibly accelerated asset depreciation or the disposal of assets over time.
- Estimated Remaining Life
- The estimated remaining life of the property and equipment shows a significant drop from 2 years in 2019 and 2020 to 1 year from 2021 through 2023. This suggests that the assets were depreciating rapidly during this period and nearing the end of their useful lives. Interestingly, in 2024 the estimated remaining life rises sharply to 4 years, which aligns with the observed increase in net property and equipment value, implying the acquisition of newer assets with longer useful lives.
- Overall Analysis
- The data suggest a period of asset write-down or disposal from 2019 to 2023, reflected by decreasing net asset values and shortening asset lives, coupled with declining depreciation expenses. The reversal in 2024, with increased asset values and extended remaining life, indicates a shift in asset management strategy, possibly reflecting new investments or capital expenditures to refresh or expand the asset base.