Three key takeaways from Digi's Q4 numbers: Page 3 of 3

Growing sales and marketing spend moving forward?

During the Q4 2016, Digi spent 10% of its service revenue on sales and marketing activities.

From a first glance, it appears that Digi's sales and marketing expenditure has increased. However, when one looks carefully, the increase (in terms of amount spent as a percentage of the service revenue) was partly to do with its change in reporting format.

It was only in 2015 and 2016 that it calculated its sales and marketing spend as a percentage of its service revenue. Prior to that, it calculated the expenditure as a percentage of its total revenue.

Nevertheless, its Q4 2016 sales and marketing cost of RM156 million was 13.9% higher than what it spent in Q3 2016. It attributed the growing sales and marketing costs to its customer acquisition activities. 

How will the intense competition in the industry impact Digi's sales and marketing expenses moving forward? Only time will tell. 

Most of these slides and data are obtained from here.

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