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: 2025-12-31), 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).
Property, plant, and equipment exhibited a consistent upward trend over the five-year period from 2021 to 2025. This growth was driven by increases across most individual asset categories, with computer equipment representing the most substantial portion of the overall investment. Accumulated depreciation also increased steadily, as expected with the addition of new assets and the continued depreciation of existing ones. Consequently, the net book value of property, plant, and equipment demonstrated significant growth throughout the period.
- Computer Equipment
- Computer equipment demonstrated the most significant growth, increasing from US$1,226 million in 2021 to US$3,332 million in 2025. This represents a compound annual growth rate of approximately 22.7%. The consistent increase suggests ongoing investment in technology infrastructure.
- Computer Software
- Investment in computer software also increased, albeit at a slower pace than computer equipment, rising from US$77 million in 2021 to US$126 million in 2025. This indicates a continued, though less substantial, investment in software assets.
- Leasehold Improvements & Other
- Leasehold and other improvements showed a notable increase, growing from US$200 million in 2021 to US$433 million in 2025. This suggests expansion or significant modifications to leased properties. The growth rate accelerated in later years.
- Furniture and Fixtures
- Furniture and fixtures experienced modest growth, increasing from US$74 million in 2021 to US$117 million in 2025. This category represents a relatively small portion of the total property, plant, and equipment balance.
- Construction in Progress
- Construction in progress fluctuated over the period, starting at US$14 million in 2021, peaking at US$63 million in 2024, and reaching US$117 million in 2025. This suggests ongoing building or expansion projects, with increased activity in the later years of the period.
- Gross Property, Plant & Equipment
- Gross property, plant, and equipment increased from US$1,591 million in 2021 to US$4,125 million in 2025, mirroring the growth observed in the individual asset categories. This represents a compound annual growth rate of approximately 21.7%.
- Accumulated Depreciation
- Accumulated depreciation increased consistently from US$825 million in 2021 to US$1,836 million in 2025. The rate of increase generally aligned with the growth in gross property, plant, and equipment, indicating a standard depreciation process.
- Net Property, Plant & Equipment
- Net property, plant, and equipment increased substantially, from US$766 million in 2021 to US$2,289 million in 2025. This growth reflects the combined effect of increased investment in assets and the ongoing depreciation of those assets.
Overall, the disclosures indicate a significant and sustained investment in property, plant, and equipment. The growth is concentrated in computer equipment and leasehold improvements, suggesting a strategic focus on technology infrastructure and leased facilities. The consistent increase in net book value suggests that these investments are contributing to the company’s asset base.
Asset Age Ratios (Summary)
ServiceNow Inc., asset age ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
The analysis of property, plant, and equipment reveals evolving characteristics regarding asset age and useful life estimations. A consistent pattern emerges across the observed period, indicating a generally decreasing average age ratio alongside adjustments to estimated useful life and remaining life calculations.
- Average Age Ratio
- The average age ratio demonstrates a declining trend, moving from 51.85% in 2021 to 44.51% in 2025. This suggests that, relative to the estimated total useful life, the average age of the asset base is decreasing over time. The most significant decrease occurred between 2021 and 2022, followed by a more gradual decline in subsequent years.
- Estimated Total Useful Life
- The estimated total useful life of the assets fluctuates throughout the period. It begins at 5 years in 2021, increases to 8 years in 2022, then decreases to 7 years in 2023, rises again to 9 years in 2024, and concludes at 8 years in 2025. These variations may reflect changes in asset acquisition strategies, technological advancements impacting asset obsolescence, or revisions to depreciation policies.
- Estimated Age & Remaining Life
- The estimated age, representing the time elapsed since purchase, increases steadily from 3 years in 2021 to 4 years in 2024 and remains at 4 years in 2025. Concurrently, the estimated remaining life also increases, starting at 2 years in 2021, reaching 4 years in 2023, and stabilizing at 5 years from 2024 onwards. The increasing remaining life, coupled with the decreasing average age ratio, suggests that newer assets are being added to the asset base, offsetting the aging of existing assets.
The interplay between these ratios indicates a dynamic asset management strategy. The company appears to be actively managing the age of its asset base, potentially through consistent investment in new property, plant, and equipment, and regularly reassessing the useful lives of its assets. The observed trends suggest a move towards a younger, more productive asset portfolio.
Average Age
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Property and equipment, gross | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Average age = 100 × Accumulated depreciation ÷ Property and equipment, gross
= 100 × ÷ =
The values for accumulated depreciation, gross property and equipment, and the average age ratio demonstrate consistent growth and a decreasing age profile over the five-year period. Accumulated depreciation increased steadily from US$825 million in 2021 to US$1,836 million in 2025, indicating ongoing utilization and depreciation of assets. Gross property and equipment exhibited a more substantial increase, rising from US$1,591 million in 2021 to US$4,125 million in 2025. This suggests significant investment in property, plant, and equipment during this timeframe.
- Accumulated Depreciation
- Accumulated depreciation shows a consistent year-over-year increase, growing at an accelerating rate. The increase from 2021 to 2022 was US$170 million, while the increase from 2024 to 2025 was US$328 million. This acceleration could be due to a larger asset base being depreciated, or a shift towards faster depreciation methods.
- Gross Property and Equipment
- Gross property and equipment experienced substantial growth each year. The largest single-year increase occurred between 2022 and 2023, with an addition of US$595 million. This suggests a period of particularly heavy investment. The growth rate appears to be moderating slightly in the later years, although still substantial.
- Average Age Ratio
- The average age ratio decreased consistently from 51.85% in 2021 to 44.51% in 2025. This indicates that, relative to the gross value of property and equipment, the accumulated depreciation is becoming a smaller proportion. This is consistent with a younger asset base, driven by the significant investments in property and equipment. A declining ratio suggests the company is actively renewing or upgrading its assets, preventing the overall age of the asset base from increasing.
The combined trends suggest a strategy of continuous investment in property, plant, and equipment, resulting in a relatively modern asset base. The increasing accumulated depreciation is expected given the growing asset base, and the decreasing average age ratio confirms that the company is maintaining a younger, more productive asset portfolio.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Estimated total useful life = Property and equipment, gross ÷ Depreciation expense
= ÷ =
Gross property and equipment values demonstrate a consistent upward trend over the five-year period, increasing from US$1,591 million in 2021 to US$4,125 million in 2025. Depreciation expense also generally increased, though not at a constant rate, moving from US$312 million in 2021 to US$508 million in 2025. The estimated total useful life of these assets has fluctuated during the same period.
- Gross Property and Equipment
- The substantial growth in gross property and equipment suggests ongoing investment in assets. The rate of increase appears to be accelerating, with larger absolute increases observed in later years. This could indicate expansion of operations or significant capital expenditures.
- Depreciation Expense
- While depreciation expense increased overall, the growth was not linear. A decrease was observed from 2021 to 2022, followed by increases in subsequent years. This fluctuation likely correlates with the timing of asset acquisitions and the application of depreciation methods. The significant increase in 2025 suggests a larger proportion of recently acquired assets are now being fully depreciated, or a change in depreciation policies.
- Estimated Total Useful Life
- The estimated total useful life exhibited variability. It began at 5 years in 2021, increased to 8 years in 2022, decreased to 7 years in 2023, rose to 9 years in 2024, and then decreased to 8 years in 2025. This fluctuation could be due to changes in the types of assets being acquired, revisions in depreciation policies, or adjustments based on actual asset performance. The lack of a consistent trend warrants further investigation to understand the underlying reasons for these changes. A longer useful life generally results in lower annual depreciation expense, while a shorter useful life results in higher annual depreciation expense.
The interplay between increasing gross property and equipment, fluctuating depreciation expense, and varying estimated useful lives suggests a dynamic asset base. Continued monitoring of these trends is recommended to assess the efficiency of capital expenditure and the appropriateness of depreciation policies.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
Accumulated depreciation exhibited a consistent upward trend over the five-year period, increasing from US$825 million in 2021 to US$1,836 million in 2025. This indicates a growing proportion of property, plant, and equipment has been utilized over time. Depreciation expense, however, did not follow a strictly linear pattern. While decreasing from 2021 to 2022, it increased significantly in 2023 and remained relatively stable through 2024 before rising again in 2025.
- Accumulated Depreciation Trend
- The continuous increase in accumulated depreciation suggests ongoing consumption of the asset base. The rate of increase appears to be accelerating, particularly between 2023 and 2025, with additions of US$323 million and US$328 million respectively. This could be due to a larger asset base being depreciated, or a shift towards faster depreciation methods for newer assets.
- Depreciation Expense Fluctuation
- The decrease in depreciation expense from 2021 to 2022 (US$312 million to US$261 million) may be attributable to fully depreciated assets being removed from the fixed asset register, or a slowdown in capital expenditures. The subsequent increase in 2023 (to US$372 million) and the further increase in 2025 (to US$508 million) likely reflect new asset acquisitions placed into service and subject to depreciation. The relatively stable expense in 2024 suggests a period of consolidation in asset additions.
- Time Elapsed Since Purchase
- The reported time elapsed since purchase fluctuates between three and four years. The consistent presence of both values suggests a continuous cycle of asset acquisition. The shift from predominantly three years in 2021 and 2023 to four years in 2022, 2024, and 2025 indicates a growing proportion of assets are beyond the initial three-year mark, potentially influencing depreciation calculations and future capital expenditure needs.
The combination of increasing accumulated depreciation and fluctuating depreciation expense suggests a dynamic asset base. Further investigation into the nature of asset acquisitions and depreciation methods would provide a more comprehensive understanding of the company’s investment and expense patterns.
Estimated Remaining Life
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Estimated remaining life = Property and equipment, net ÷ Depreciation expense
= ÷ =
Property and equipment, net, exhibited a consistent upward trend over the five-year period, increasing from US$766 million in 2021 to US$2,289 million in 2025. Depreciation expense fluctuated during this time, initially decreasing before increasing substantially in later years. The estimated remaining life of the property and equipment also demonstrated a clear pattern of extension.
- Property and Equipment, Net
- The net value of property and equipment increased significantly throughout the period, suggesting substantial investment in fixed assets. The growth rate appears to accelerate from 2023 onwards, indicating a potential increase in capital expenditure. This growth could be due to expansion initiatives or the acquisition of new assets.
- Depreciation Expense
- Depreciation expense decreased from US$312 million in 2021 to US$261 million in 2022. However, it then rose to US$372 million in 2023 and continued to increase, reaching US$508 million in 2025. This increase correlates with the growth in property and equipment, net, and suggests that a larger asset base is now subject to depreciation. The increase in depreciation expense from 2022 to 2025 is more pronounced than the increase in net property and equipment, potentially indicating a shift towards depreciating assets with shorter useful lives or a change in depreciation methods.
- Estimated Remaining Life
- The estimated remaining life of the property and equipment increased from 2 years in 2021 to 5 years in 2024 and remained at 5 years in 2025. This extension in estimated useful life would directly reduce the annual depreciation expense, all other factors being equal. The significant jump in estimated remaining life from 2021 to 2022, and again from 2023 to 2024, warrants further investigation to understand the underlying reasons. It could be due to asset refurbishment, technological advancements extending asset usability, or a reassessment of depreciation policies. The lengthening of the estimated remaining life partially offsets the impact of the growing asset base on depreciation expense.
The combined effect of increasing property and equipment, net, and extending the estimated remaining life results in a complex pattern for depreciation expense. While the asset base is growing, the extended useful lives moderate the increase in depreciation. Continued monitoring of these trends is recommended to assess the impact on profitability and cash flow.