Analysis of Property, Plant and Equipment
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Property, Plant and Equipment Disclosure
ServiceNow Inc., balance sheet: property, plant and equipment
US$ in millions
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).
- Computer Equipment
- The value of computer equipment shows a consistent upward trend over the reported periods, increasing from $974 million in 2020 to $2,697 million in 2024. This represents a substantial growth pace, reflecting ongoing investments and upgrades in hardware assets.
- Computer Software
- Computer software values demonstrate a gradual but steady increase, growing from $72 million in 2020 to $106 million in 2024. This modest growth indicates continuous but controlled expenditure on software assets.
- Leasehold and Other Improvements
- Leasehold and other improvements also exhibit a positive trend, rising from $168 million in 2020 to $320 million in 2024. The steady incremental increase suggests ongoing enhancements and modifications to leased properties or facilities.
- Furniture and Fixtures
- Furniture and fixtures present a stable pattern, with minor fluctuations. The valuation moved from $69 million in 2020, peaked at $86 million in 2023, and slightly declined to $85 million in 2024. This slight decrease after a peak suggests limited replacement or addition activity in these assets.
- Construction in Progress
- Construction in progress shows variability, starting at $9 million in 2020, increasing notably to $53 million in 2022, then declining to $33 million in 2023 before rising again to $63 million in 2024. This pattern may indicate phased project development or variable levels of ongoing construction initiatives.
- Property and Equipment, Gross
- Gross property and equipment increase steadily from $1,292 million in 2020 to $3,271 million in 2024, reflecting cumulative asset acquisitions and capital expenditures. This growth aligns with the increases observed in the underlying asset categories.
- Accumulated Depreciation
- Accumulated depreciation rises consistently in magnitude from -$632 million in 2020 to -$1,508 million in 2024. This increase reflects the aging of assets and systematic allocation of depreciation expenses over time.
- Property and Equipment, Net
- The net property and equipment value demonstrate a steady upward trajectory, growing from $660 million in 2020 to $1,763 million in 2024. This increase indicates that asset additions and capital investments have outpaced the depreciation charges, resulting in a strengthening asset base.
Asset Age Ratios (Summary)
ServiceNow 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).
- Average Age Ratio
- The average age ratio demonstrated a fluctuating trend over the observed period. It increased from 48.93% in 2020 to a peak of 51.85% in 2021, indicating a higher proportion of older assets relative to total useful life during that year. Subsequently, the ratio decreased to 48.58% in 2022, remained relatively stable in 2023 at 48.62%, and further declined to 46.1% in 2024. This downward shift in later years suggests a gradual rejuvenation or replacement of assets.
- Estimated Total Useful Life
- The estimated total useful life of assets exhibited variability, starting at 6 years in 2020, declining to 5 years in 2021, then increasing substantially to 8 years in 2022, slightly reducing to 7 years in 2023, and rising again to 9 years in 2024. This pattern implies periodic reassessment or changes in asset longevity assumptions, with a general trend toward longer estimated useful life in recent years.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of assets remained relatively stable in two-year periods: it was consistently reported at 3 years in 2020, 2021, and 2023, increased to 4 years in 2022 and 2024. This modest variation suggests a moderately steady rate of asset acquisition or a mix of asset ages within the portfolio.
- Estimated Remaining Life
- The estimated remaining life of the assets exhibited a slight increase over the period. Beginning at 3 years in 2020, it decreased to 2 years in 2021 but then increased to 4 years for both 2022 and 2023 and finally reached 5 years in 2024. The overall increase in remaining life suggests management's expectation of longer continued utility from the assets or extension of asset life spans.
Average Age
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| 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
= 100 × ÷ =
- Gross Property and Equipment
- The gross property and equipment value exhibits a consistent upward trend over the five-year period. It increased from 1,292 million US dollars in 2020 to 3,271 million US dollars in 2024, representing a significant growth of approximately 153%. This indicates ongoing investments in property and equipment assets.
- Accumulated Depreciation
- Accumulated depreciation also rose steadily each year, increasing from 632 million US dollars in 2020 to 1,508 million US dollars in 2024. The growth in accumulated depreciation closely parallels the increase in gross property and equipment, suggesting systematic depreciation practices aligned with asset additions.
- Average Age Ratio
- The average age ratio remained relatively stable but showed a slight decline in the latter years. Starting at 48.93% in 2020, it peaked at 51.85% in 2021, then gradually decreased to 46.1% by 2024. The decreasing trend in recent years may reflect the acquisition of newer assets or accelerated depreciation methods, effectively lowering the average age of the asset base.
Estimated Total Useful Life
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 Estimated total useful life = Property and equipment, gross ÷ Depreciation expense
= ÷ =
- Property and Equipment, Gross
- The gross value of property and equipment exhibited a consistent and significant upward trend over the five-year period. Starting at $1,292 million in 2020, the value increased to $3,271 million by 2024. This reflects more than a twofold growth, indicative of substantial investment in fixed assets, likely to support business expansion or operational scaling.
- Depreciation Expense
- Depreciation expense showed variability across the years. From $225 million in 2020, it rose sharply to $312 million in 2021, then declined to $261 million in 2022. Subsequently, it increased again to $372 million in 2023, remaining nearly stable at $371 million in 2024. These fluctuations may suggest changes in the asset base composition or revisions in depreciation policies, possibly driven by asset additions or disposals.
- Estimated Total Useful Life
- The estimated total useful life of the assets changed over the observed period, initially decreasing from 6 years in 2020 to 5 years in 2021, then increasing to 8 years in 2022, slightly declining to 7 years in 2023, and rising again to 9 years in 2024. These adjustments imply periodic reassessment of asset longevity, which affects depreciation calculations and may reflect changes in asset quality, technology upgrades, or shifts in asset utilization strategies.
- Overall Analysis
- The steady increase in gross property and equipment values suggests vigorous capital expenditure activity. The variable depreciation expense alongside fluctuating estimated asset life indicates active management of the asset portfolio, with possible replacement or enhancement of assets over time. The pattern of increasing useful life in later years may also be associated with investments in more durable or technologically advanced equipment.
Estimated Age, Time Elapsed since Purchase
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 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation shows a consistent upward trend over the examined periods, increasing from $632 million in 2020 to $1,508 million in 2024. This gradual rise indicates continued depreciation of property, plant, and equipment assets, reflecting ongoing usage and aging of these assets.
- Depreciation Expense
- Depreciation expense exhibits fluctuations throughout the years. It increased from $225 million in 2020 to a peak of $312 million in 2021, followed by a decrease to $261 million in 2022. The expense then rose significantly to $372 million in 2023, before marginally declining to $371 million in 2024. These variations suggest irregular purchasing or disposal of fixed assets and possibly changes in depreciation methods or asset mix.
- Time Elapsed Since Purchase
- The average time elapsed since purchase remained relatively stable, varying between 3 and 4 years over the five-year period. A slight alternation between 3 and 4 years indicates consistent asset renewal or replacement cycles without significant acceleration or delay.
Estimated Remaining Life
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 Estimated remaining life = Property and equipment, net ÷ Depreciation expense
= ÷ =
- Property and equipment, net
- The net value of property and equipment shows a consistent upward trend over the five-year period. Starting at 660 million US dollars at the end of 2020, the value increased moderately to 766 million in 2021, followed by a more substantial rise to 1,053 million in 2022. This growth accelerated further in subsequent years, reaching 1,358 million in 2023 and 1,763 million in 2024. This pattern indicates ongoing investment in property and equipment, reflecting expansion or upgrading activities.
- Depreciation expense
- The depreciation expense shows some variability during the observed period. It increased from 225 million US dollars in 2020 to 312 million in 2021, then dropped to 261 million in 2022. From 2022 onwards, there was another increase to 372 million in 2023, which remained essentially flat at 371 million in 2024. The fluctuations may suggest changes in asset acquisition timing, usage patterns, or depreciation policy adjustments.
- Estimated remaining life
- The estimated remaining life of property and equipment exhibits fluctuations over the period. It decreased from 3 years at the end of 2020 to 2 years in 2021, then increased to 4 years in 2022 and remained stable through 2023. In 2024, the estimated remaining life further extended to 5 years. This trend could reflect the replacement of older assets with newer ones having longer useful lives or reassessments of asset longevity.