Hi, welcome to the Q2 presentation of the Atea Group numbers. We have no heat wave here in Oslo, we have a beautiful summer day with the crisp air and the long summer nights, so something to look forward to. I also want to remind you that we do take a Q&A in the end, so please put in your questions. In this quarter, we delivered on all what we promised: a good growth, normalizing working capital, and EBIT growth higher than the revenue. Let's take a look at the numbers. Revenue, net revenue that is, came in at NOK 8.9 billion, a growth of more than 17%. EBIT of NOK 291 million, up 21%.
Operating cash flow of NOK 340 million, up more than NOK 900 million, and that leaves us with a net debt balance of almost zero, down NOK 1.1 billion. We look at this as a very, very solid and good quarter, but as always, I leave it to Robert to give you all the good news.
Thank you, Steinar. Q2 was another solid quarter of revenue and profit growth for Atea. Total revenue increased by 16.9% to NOK 8.9 billion. After adjusting for currency movements and for a small acquisition, organic revenue growth in constant currency was 7.7%. Revenue growth was strong across all lines of business. Hardware revenue grew by 15.3%, with very strong growth in networking solutions. Software revenue increased by 17.3% based on higher volumes and price increases. Services revenue grew by 21.0%, with higher demand for both consulting and managed services. Gross profit increased by 20.1% to NOK 2.7 billion. Gross margin improved from last year based on an increased proportion of services in the revenue mix.
Total operating expenses were NOK 2.4 billion, up from NOK 1.9 billion last year. In Q2 last year, Atea had an extraordinary net gain of NOK 40 million from the sale of Atea's mobile business in Norway. This was reported as a reduction in operating cost. Adjusting for this extraordinary gain and for the impact of a weaker Norwegian krone, operating expenses grew by 10.8% in constant currency from last year, mainly due to growth in the services workforce and to higher salary costs. Based on strong revenue growth, Atea had another quarter of record-high operating profit in Q2. Atea's EBIT in the second quarter was NOK 291 million, compared with NOK 281 million last year.
If we exclude the sale of Atea's mobile business in Q2 last year from these numbers, EBIT in the second quarter grew by 20.9%. Well, now to take a closer look at revenue and profit development across the countries in which we operate. All business units contributed to Atea's strong financial performance in Q2. In Norway, revenue grew by 6% to NOK 2.0 billion, based on strong demand for services. EBIT was NOK 81 million. Last year's EBIT in Norway was impacted by an extraordinary gain from the sale of Atea's mobile business. Excluding this extraordinary item, Atea's EBIT in Norway grew by 3% from last year. In Sweden, revenue increased by 10%, with solid growth across all lines of business. Based on higher sales, EBIT grew by 9% to a record high, SEK 152 million.
In Denmark, Atea continued to make steady progress in its turnaround. The revenue mix shifted to higher margin services. Based on strong performance and services, EBIT grew to DKK 17 million, up from DKK 2 million last year. In Finland, sales grew by 26% to EUR 87 million, primarily driven by very high hardware deliveries on new frame agreements to the public sector. EBIT grew by 60% to a record high, EUR 3.8 million. In the Baltics, revenue increased by 2% to EUR 32 million based on increased sales of services. EBIT grew by 3% to EUR 1.4 million. Atea Group functions, which include shared services and group costs, had a net operating expense of NOK 31 million, compared with a net operating expense of NOK 11 million last year.
The difference was primarily due to lower profits in Atea's logistics operation, and higher share-based compensation costs as a result of an increase in Atea's share price during the quarter. Now, a word on our cash flow and balance sheet. Atea's cash flow from operations was an inflow of NOK 340 million in the second quarter. Cash flow was driven by solid earnings and a flat development in working capital during the quarter. Cash flow from operations was NOK 919 million higher than in Q2 last year, when Atea accumulated higher inventory to secure customer deliveries during a period of supply constraints in the electronics industry. During the past year, Atea has reduced its inventory back to a normalized level relative to its hardware sales.
Moving on to our debt balance, Atea had a net debt of NOK 46 million at the end of Q2, as defined by Atea's loan covenants. This corresponds to a net debt/EBITDA ratio of approximately 0. Atea's loan covenants require the company to maintain a net debt/EBITDA ratio of less than 2.5, which would mean that the maximum net debt balance allowed by Atea's loan covenants was NOK 4.8 billion at the end of Q2. Atea's net debt balance was therefore NOK 4.8 billion less than the maximum allowed by its loan covenants at the end of Q2. The company has significant additional debt capacity before its loan covenants would be reached. That concludes the presentation of the second quarter results. I'll now hand the podium back over to Steinar to discuss the outlook for Atea's business as we head into the second half of 2023.
Thank you, Robert. Another solid quarter. We're very happy with it. I wanna discuss with you some of the angles into how our revenue is developing, how we look at it, and how we drive it, and what you can take from the history when you look forward and try to predict our revenue going into second half. The last year, actually the last year and a half, we've experienced hyper-growth in Atea. We've taken market share. It's important to remember that even though some places in the world there was a spike in the revenue, especially for portable PCs, when the pandemic hit in 2020, we didn't really see that. In our part of the world, most people were prepared, if I want to say it that way, at least digitally.
We did see a growth, as I call it, a hyper-growth, when people started going back to the office in Q1 of 2022, especially when we came to Q3 of 2022. If there was one thing we learned during the pandemic, it was to go digital. It was kind of a new digital awakening, as you see, it gave us extraordinary growth the last 12 months. If you divide it into quarters, you see that in this quarter, in Q2, growth in constant currency is normalizing. This is what we've said over the last two or three presentations, that a growth of more than 20% in constant currency is not sustainable.
If you look at how the growth varies and how it's divided into the three business areas that we talk about, you see that hardware over the last 12 months consists of 50%, or 50% of our revenue consists of hardware. Software 32%, and services 18%. I know that a lot of you are really focusing on this split. We actually don't. The way we look at it is from a customer point of view. We are looking at customers' need and how we can help them grow their value for their customers, and how can we become more important to our customers. Sometimes that is more hardware, sometimes it's more software, and sometimes it's more services.
The most important thing for us is that we take market share, and we measure it, and if we don't, we have to do something, invest in value or be more price sensitive. It's the customer that drives our mix, not initiatives from management. It's also one thing that is important for all of you when you benchmark companies, is that people report revenue differently. If you're a software company, you report your revenue more leaning towards software. If you're a service company, you report your revenue leaning more towards reporting as service, and so on. We try to report it where it actually sits. If there's one thing we have learned over the last many, many, many years, it's that all platforms that customers use, local, regional, or international, is that it consists of hardware, software, and services.
If we look back the last 10 years, it is sometimes important to remember your history to know the future. If you look at the last 10 years, the average growth in revenue have been 8.7% every year for 10 years. It's not linear, but it looks very close. The EBIT have grown by 14.5%, and it should. It should grow faster than the revenue, as we are scaling the revenue as we go forward. Actually, if we add 2023 to this slide, which I will not do, but just give you the thoughts, and we use the analyst expectation, the average analyst expectations of revenue this year will be more than NOK 53 billion, and EBIT between NOK 1.4 billion- NOK 1.5 billion. It will actually add to the average of the last 10 years.
We feel pretty confident that even though revenue are normalizing between 5% and 10% growth, that we are taking market share and adding to the value that we have for our customers. That is how we steer the company, market share and value, that's what you should be looking at going forward. If we summarize first half, IFRS revenue comes in at NOK 17.6 billion, up 21%. EBIT of NOK 541 million, up 28%, and operating cash flow of NOK 545 million, up NOK 1.8 billion. There you have it, another solid quarter and half year for Atea, and we will go for some Q&A before we take a summer vacation.
Thank you, Robert, for the presentation. First question, in the presentation, you commented on the inventory. Can you comment further, and do you have any take on losses in regards to that?
Yeah. As we have said over the last, I think, two and a half years, we did build up inventory as supply chain constraints hit us back in 2020. As we passed a year ago, the summer of 2022, we started discussing that constraints in the supply chain would ease over the next 12 months, this is 12 months ago, and especially around New Year, and that's exactly what happened. From the beginning of this year until now, we have normalized the inventory. In % of the revenue, inventory is actually now lower than what it was when before we started increasing it. When it comes to losses or possible write-downs, we have had no such. Our inventory, when we have it, is specifically geared towards certain contracts or certain customers.
We steer the company on customers, and so it's not a open stock inventory where we don't know where it should go. No, losses that I'm aware of taken and no, write-downs in the second half.
Right. Thank you. Second question here is on cost. Can you make some comments on how you see this going forward?
Yeah, I think Robert commented very briefly on cost.
As the revenue is normalizing, cost increases can't be as they have been with revenue growing by more than 20%, and for us, most of cost is employees. What you'll see going forward is that we will not increase the number of people as quickly as we have over the last year and a half. Actually, for the last six months, the number of new people into Atea has already been normalizing, so we're around 90 people, new people, and you'll see in the second half, very few new heads coming in, as we scale even better than what we used to on the 8,100 people we are already having.
Thank you. Next question is, you noted a consensus for the 2023 EBIT is, between NOK 1.4 billion and NOK 1.5 billion. Are you saying this is what you expect for the year?
I said that was the consensus, and I don't think, or we hope not to disappoint our friends in the among the analysts.
Last question we have here, last month's, there's been a lot of talk about AI, and it's been on everybody's mind. Do you have any further comments or views you can share with us?
Yeah, it's interesting when a new technology takes on a user interface where normal people can interact with it. It's kind of a new world. AI has been around for a long time. There's a lot of issues to solve. There are technologies that need to be developed, it's extremely promising. For us, it gives an opportunity to sell consultancy, to sell managed services, AI as a service. Maybe most importantly, it drives the infrastructure. It drives the licenses, it drives the hardware. You'll see that the average price of computers, desktops or servers, but also networking, will increase because you need more power to do something like AI meaningful. First of all, we think it'll take a little longer than what people say.
As always, with technology, humans overestimate the importance in the short run and underestimate it in the long run. It will change materially how we interact with a computer over time, and that will drive infrastructure. As always, we are adapting to new technology. We're not leading and bleeding, but we are adapting to it, and that's how we scale.
Right. That concludes our questions for a very sunny July day here in Oslo.
Okay. Thank you to everybody that follow us, and to everybody out there, have a great summer.