Depreciating faster than they reinvest

580 companies above $1bn in revenue recorded more depreciation and amortisation than capital expenditure in their most recent annual filing.

Depreciation is the cost of assets already bought, spread over their lives. Capital expenditure is the cost of replacing them. When the first exceeds the second for long, the productive asset base is being consumed faster than it is renewed.

The effect on reported cash flow is flattering while it lasts. Depreciation is a non-cash charge added back to operating cash flow, and capital expenditure is a real outflow. So a company that cuts investment reports stronger free cash flow in exactly the years it is underinvesting.

This is not always underinvestment. A business shifting from owned infrastructure to leased or cloud-based capacity will show the same pattern while becoming less capital intensive on purpose. Amortisation of acquired intangibles also inflates the charge without describing any physical asset at all -- and for acquisitive companies that is most of the gap.

What this is usually called

The comparison is usually quoted as the capex-to-depreciation ratio, and a reading below one is described as underinvestment or as harvesting the asset base. Depreciation, depletion and amortisation are grouped as D&A, and the amortisation portion relates to acquired intangibles rather than to physical assets -- which is why acquisitive companies sit here without underinvesting in anything.

The question, as a query

This is the whole of the question. Nothing is filtered by hand afterwards, and the same text typed into the screener reproduces the table below exactly.

depreciation_amortization > capex AND revenue > 1b

Showing the 40 largest by revenue of 580. Open the full list in the screener.

What this does not show

Depreciation and amortisation are combined here as most filers report them together. Amortisation of intangibles from acquisitions is not a reinvestment requirement in the way depreciation of equipment is.

The measures behind this

Depreciation & amortization Capital expenditures Total assets

Related findings

• Spending more on assets than the business brings in
• When most of the balance sheet is goodwill
• Growing five years running on almost no capital

Citing this

SequelSEC, “Depreciating faster than they reinvest”, 7 November 2026. https://sequelsec.com/findings/depreciation-above-capital-expenditure
Figures are recomputed on every view from SEC filings, so a number quoted from this page should carry the date it was read.