HomeSupply and SpendingCapEx Structure and the Earnings Hit
CapEx Efficiency and the Race Against Depreciation
CapEx Efficiency: New Annualized Cloud Revenue per $1 of Earlier CapEx#
New annualized cloud revenue per $1 of earlier CapEx: Google rose from 0.25 to 0.42, Microsoft hugs the 0.33 three-year payback line.Draft, pending review
How to read this chart
Trailing-four-quarter incremental cloud revenue divided by trailing-four-quarter CapEx four quarters earlier; Meta has no cloud segment and is excluded. The 0.33 line is a three-year revenue payback, a pass mark rather than excellence: it recovers revenue, not profit, and at roughly 35% cloud operating margin the profit payback is 8 to 9 years, beyond a server's six-year life. Judge by trend and by peers.
Source: FinSight compilation and estimates · Updated 2026-09-03
Standalone page ↗s2-efficiency-csp-01
D&A Growth vs Cloud Revenue Growth (YoY, Combined)#
Cloud revenue growth is still outrunning depreciation growth; read the trend, not any single quarter.Draft, pending review
How to read this chart
If depreciation growth stays above cloud revenue growth, margins come under pressure. The dashed line is the mechanically projected hurdle rate, same method as above. Read the trend, not single quarters; there is a model seam where actuals meet the projection.
Source: Company filings and analyst estimates (FinSight compilation and estimates) · Updated 2026-09-03
Standalone page ↗s2-efficiency-csp-02
CapEx ÷ D&A (x) = a Lead Indicator of Future Depreciation Pressure#
CapEx at 3 to 4 times depreciation means depreciation must accelerate; the investment cycle only ends when the ratio falls back near 1x.Draft, pending review
How to read this chart
Today's CapEx is the depreciation of the next two years.
Source: FinSight compilation and estimates · Updated 2026-09-03
Standalone page ↗s2-efficiency-csp-03
D&A ÷ Cloud Revenue (Company-Wide D&A ÷ Cloud Segment Revenue)#
D&A as a share of cloud revenue is falling, so the cloud is monetizing faster than depreciation arrives; worry only if it turns up.Draft, pending review
How to read this chart
The numerator includes non-cloud depreciation, so read the trend rather than the level.
Source: FinSight compilation and estimates · Updated 2026-09-03
Standalone page ↗s2-efficiency-csp-04