Okay, welcome to the interim report for Itera Third Quarter. My name is Arne Mjøs. I'm the Chief Executive Officer. We will have the same agenda as we normally do. We start with the highlights for the Third Quarter, and then CFO Bent Hammer will take the financial review. I will continue with the business review and some comments about the outlook. In the Third Quarter, we delivered NOK 121 million in revenue compared to NOK 108 million last year. That represents a 12% organic growth year over year. The EBIT was NOK 6.4 million, same as last year. That represents a margin of 5.3% compared to 5.9% margin last year. If I look at the core business of Itera, we also have data center. I'll come back to that.
But if I look at the core digital business, which represents about 75% of the business, we have a year-to-date revenue growth of 23% and an EBIT margin of 10.5%. Itera's data center, we have been in the data center business for a very long time, and we see that the public cloud is actually accelerating. So, about 50% of the data processing power in the market is already on the public cloud. So, that's why we accelerate the transformation into cloud. So, that is also hitting the margin and the growth. But we will look into that part more in detail later.
We also have a very significant interest in our scalable hybrid model, and we are also happy to win a very prestigious award called Experience Provider of the Year by the Global Sourcing Association, which is a very important milestone in the delivery model that we have established, and last but not least, we also have a successful employee stock purchase program in this Third Quarter. Okay, so that was the summary for the Third Quarter, so please go into the financial review.
Thank you, Arne, and good morning to all. As Arne mentioned, we had a 12% growth in the quarter to NOK 121.3 million of revenues, an EBITDA of NOK 11.8 million, and an EBIT of NOK 6.4 million, which was on par with last year's performance, though the margin is slightly less as the top line is higher. And I will come back to more details about that later. The cash flow from operations was NOK 1.5 million, which was approximately NOK 10 million lower than last year. And that's due to the fact that most of the receivables from the August invoicing fell due over the last weekend of September. So, the inflow came on Monday, October 1st instead. We had a cash balance of approximately NOK 20 million at the end of the quarter, and that's a full NOK 40 million below last year.
That can be attributed to the fact that we've paid out two rounds of dividends and also repurchased own shares, all in all to a value of more than NOK 50 million. That also puts a toll on the equity ratio. That was down to 18.1% from 30% last year. We grew the number of employees at the end of the quarter by 4% to 493 employees and had on average 485 employees in the quarter. Looking a bit more into the details of the cost side, we had a substantial growth in the cost of sales, which is attributable to the use of more subcontractors. Personnel expenses grew by 8%, which is pretty much in line with the headcount growth. Depreciation, lower growth than the top line suggests of only 5%.
That reflects a bit less investments that we do in the data centers these days. Other operating expenses were up by 31%. There are three main components of that. One is that we have moved into a new and expanded facility in Kyiv that will accommodate a lot of the growth we had towards the end of 2017, as well as possibilities to grow further in a good market. Moreover, we spent more money on competence development in the period, as well as on professional services. Referring back to Arne's opening statements about the data centers and the other core digital business, if we break down the financial performance year-to-date, we can see that this core digital business had a substantial growth rate of 23% and an EBIT margin of 10.5%.
This goes to show that our scalable hybrid delivery model is producing both excess growth as well as very good levels of profitability. On the other hand, we've seen for a period of time that the margins in the data center operations have been declining, and we have not been able to attract a lot of new business on form. Arne will come back to a bit more about the industry trends in that respect as well, but the fact of the matter is that this business isolated had a negative growth of 2% and also produced a negative EBIT margin of 1.1%, so this part of the business currently constitutes about 25% of the business volume as measured in gross profit terms, so we will do an investment into new cloud offerings and lift-and-shift customers one by one and sunset any residual business as contracts are expiring.
Just to show even more detail about the impact this data center operations have on our total profitability, we have a fairly flat development in the total EBIT for the nine months to date, starting off with NOK 25.5 million last year. This data center operations had a negative impact of NOK 9.6 million in change of profitability in that period, whereas the digital business had a positive change of NOK 10.1 million.
Also, it was a positive margin development of two points for the core digital business, whereas the data center operations had a reduction in their margins of 9.1 percentage points. The Third Quarter revenues are, as usual, the lowest in the year because of the vacation period in July in our Nordic business. Still, we see that there's a substantial growth from the same quarter of last year. The number of employees has been rather flat during the year.
We had a tremendous growth in 2017, which is now posted so far this year. That's at least in part attributable to one large nearshore account that we are currently in the process of scaling down due to the fact that this customer has been acquired by another player that already had a full nearshore setup and wants to continue using this. That's kind of eliminated the other underlying growth that we had on the nearshore operations in 2018. As mentioned, this data center takes its toll on our margins, just partially compensated by improved margins in the core digital business. Breaking down the revenue into service offerings, we see that our own service deliveries have increased by 11% to 75 million NOK, whereas the subscription revenue has increased by 5% to 34 million NOK. The third-party services, including subcontractors, have almost doubled to 8 million NOK.
So, not a large volume in total, but nevertheless, high growth in percentage terms. Other revenue, like hardware and software sales, has been rather flat at 4 million NOK. Referring back to the statement of cash flow, as mentioned, 1.5 million NOK generated from operating activities. We invested 2.3 million NOK in the quarter, which is down 1.7 million from the corresponding quarter last year. And that's a reflection on the less investments that we are taking in data center operations. We had a positive inflow from financing activities as we had this employee share purchase program for our key employees. I will come back to that in a minute. So, all in all, a net positive change of 4.2 million NOK on cash in the quarter and an ending balance of 19.6 million in cash.
On top of that, we have currently just over 1.2 million treasury shares that at quarter end were valued at NOK 14.2 million. We're holding those for future incentive programs that are already in place, like the option programs from 2015, 2016, and 2017, as well as planned share purchase programs for employees next year and thereafter. Our shareholders have had a tremendous journey in the last 12 months. Share price ended at NOK 11.4 per share end of quarter, which was up from NOK 6.21 per share at the same time last year, and in this period, we also paid out NOK 0.5 in dividend payments, so, all in all, a 92% payback or yeah, what's it called? 92% on these investments.
We have, over the past three years, had a very aggressive dividend policy where we have distributed more than 100% of earnings on average over these three years. And then, on top of that, we also repurchased some of our own shares. So, currently, we have 1.2 million shares in our holdings, and that's down almost a million from the end of last quarter as we had this employee share purchase program that consisted of 22 people that bought these 172,000 shares. And we had, at the very end of Q2, also 98 employees in a general program who bought close to 200,000 shares. So, there are a lot of people, a lot of our employees now that are holding Itera shares. And I should mention for these key employees, their shareholding is with a three-year lock-up period and also dependent on retaining their employee status.
Otherwise, we have an option to repurchase the shares if they leave within these three years. The balance sheet is slimmer than the same period of last year, despite impacts of the new income recognition standard, IFRS 15, which inflated the balance sheets on both sides. We see that the main reduction in the balance sheet is, of course, on cash on one hand and equity on the other side, reflecting again the aforementioned dividend payments and purchase of own shares. We had NOK 14 million more customer receivables outstanding at the end of the quarter, again due to the last couple of days falling over a weekend. The mentioned IFRS 15 implementation has not had any great impacts on our results and probably will have less such in the future as well, other than what's already been recognized as balances that will be amortized over the contract periods.
But these are very much linked to the data center operations. So, there will probably come fewer new projects that will be impacted by this new standard. That was it for me. So, I will hand back to Arne. We will give you more update of the business and the industry trends that we're operating under. Thanks a lot. Thank you, Bent. Okay, then we continue with the business review section. I guess you have heard me talking about the platform economy. Yes, that's for sure. Everything is going in that direction. So, the platform economy, which is also a new kind of business model, but also the technology challenges all business logic in all the industry. That is what's actually really happening.
If you look at the data, the amount of data that will be consumed, this is a very nice picture by 2020 showing that every person will have produced about 1.5 gigabytes per day in data. In the home, there will be 50 gigabytes per day produced. I'm talking about only two years ahead. In the car, there will be five terabytes of data produced per day, etc., etc. Also, if you look at the number of IoT devices, there are coming one million new devices online every hour by 2020. As we had talked about earlier, it's actually that our position is to be the number one in creating digital business. We have four pillars in our strategy. We should focus on our customer-customer. We work in multidisciplinary teams.
We take the full lifecycle responsibility, and we have a very value-added hybrid scalable model where we have more or less unlimited access to resources, so the business model we have is actually to be both fast and agile, but also have the scalability in terms of what we call the hybrid, and if you break down the typical services or features that we put into the project, we can do for the customer everything from customer journey design. We are making a proof of concept using new technology like artificial intelligence, whatever, based on a very customer-centric approach and in a Nordic culture environment, and then we have high mobility of the resources across the Nordics, but also to nearshore, so the scalability in Itera is very high.
When we're delivering these kinds of solutions, we are using platforms, cloud, all kinds of new stuff that is coming into the market to enable new digital businesses. Our scalability has gained a lot of traction in the market. We have a visit by the Norwegian Minister of Trade and Industry, Torbjørn Røe Isaksen, at our office in Kyiv. I think he was very happy to see how this model really empowers the players or the businesses, both on the private side and the public side in Norway, but also in the Nordics, with the capacity so they can continue with all kinds of digitalization projects that they have, because the access to digital talents is really a bottleneck in order to continue this development.
He also said that this is no kind of brain drain from the country, and we don't have any kind of social dumping locally. You have these kinds of criteria, which is very important also from a political point of view. We are very happy that this quarter also won the award by the Global Sourcing Association as the Customer Experience Provider of the Year 2018. That's a very prestigious award that we managed to win. The summit was actually in Cape Town in South Africa. The whole world of players are representing, and we really won the category, which is the most important for us, really to have the best customer experience with a global sourcing model. The model that we have established, and somebody believes it's just to have some services totally different. You need to become a mature player.
It takes you five to six years. We have more or less used that. We had a 10-year anniversary, but as you see the progress of the journey we have been through, we started with the first office in Kyiv in 2008, and we would like to make innovate the Nordic setup. So, we have always started from a Nordic perspective. And then we had another office in Ukraine, in Lviv, in 2010. And in 2014, we established the first office within the E.U. in Bratislava. And now we have, based on this, when we established the first office in Kyiv, that was the main office. So, we established all kinds of structure, capital, etc. So, now we are in a position to establish a new office by nine to 12 months. And it could be everywhere in Eastern Europe.
So, we have the methodology, we have the people, and we have the knowledge. How do we do this in a very scalable way? In terms of GDPR security, we have the highest standard in place. We were certified as the Binding Corporate Rules Processor in 2017. 2016, started the project in 2016, managed to have the signed agreement with the national data authorities within the E.U., but also have the bridge to Ukraine. So, with Itera, it's very easy to consider all kinds of data processing of data, personal sensitive data across the border in terms of because we have this certification or this compliance on Binding Corporate Rules. And last but not least, in 2018, we won the global award as the Experience Provider of the Year. And going forward, we really believe we have the scalability.
We had a visit by the board for the first time, three days in Kyiv in September. And I really believe that the scalability that we established during these three years can actually bring Itera to 1,000, 2,000, 3,000 employees because we have everything in place to scale with new offices, etc. Okay, we have also to look at what I mentioned about the data. There will be a substantial growth of data, 35 times more data in five years than we have today. This is really a rapid growth. And if you look at the processing power we see today, that's about 50% today. It was 41% in 2018, but we estimated today to be about 50% of all data center processing power is in the hybrid scale data centers, this public cloud data center typically by Microsoft, Amazon, and Google. And it will increase to 69% in 2021.
So, in order to digitize, continue the digitalization of the world in every sector, in all industries, you can't do it on the traditional data center capability. So, everyone needs to move into the cloud. And that is also what we have seen in the transformation of Itera, as Bent told about, that we have the existing data center. We have customer data, which is very customized. And several of these customers have in the agreement that they will move into the cloud. And the speed to move into the cloud is faster than we thought in the beginning. So, now we are building what we call a Managed Cloud Services unit, which is everything based on a cloud approach.
We put the best practice cloud foundation, and then we bridge or lift-and-shift the customer from the data centers to the cloud through some kind of methodology that we have in place. That is also a great opportunity because we can look at our own customers. We have to make some kind of roadmap planning for each customer on the data center and do this sequentially. We can also use the same methodology when we look at other clients because they also need to go into the cloud. I will say that if you don't go into the cloud within two years in some way or others, you won't be able to be a part of the new digital world where we have all these kinds of IoT services coming in as part of your business model.
To show you one example, we have a project. We can't mention the customer because it's very strategic for the customer, but we are working for a very large Nordic company that would like to build their future e-health hub for Nordic citizens, so what they're planning is actually to look more on the data you have on your wearables. And by having a lot of data, you have about your body. For example, the Apple Watch, the new watch, also has this capability in order to look at your heart, etc., so that is just one example, but a lot of new technology will be placed inside or outside your body.
So, you have this information daily about your body, and then you use different kinds of tools, but not least artificial intelligence to be more proactive about your healthcare situation, but also make some kind of new services that are more within proactive care. So, this is a trend that we see that instead of going to the hospital with your pain, you actually are proactive in order to solve your problems or avoid problems before you, at the end, would need to go to the hospital. So, it's actually really reduced or disrupted the healthcare process that we have seen. So, of course, this is important for everyone. This is important according to the United Nations Sustainable Development Goals in terms of good health and well-being for everyone in the world.
We also have a project that also supports the same or different United Nations Sustainable Development Goals, but it's actually in terms of the energy where we are teaming up with Microsoft in Redmond to use their digital twins, so the new technology that really is building functionality that makes it easy to connect to cities, connect to buildings, connect to vehicles, etc. So, they make a very horizontal platform that others can play or plug into or deliver service on top in order to digitize different sectors and also across sectors. And these are also services supplying or supporting all the goals by the United Nations, for example, seven, nine, and 11. Of course, so these are just some examples. If I look at the order intake, we have both existing customers, but also some new ones.
So, the book-to-bill ratio in the Third Quarter was 0.9, and we have 1.1 book-to-bill ratio year-to-date. And also the customer development, as we have reporting for many quarters. So, we had 95% of the existing customers accounted for 95% of revenue in the Third Quarter. And we also look at, if you look at the top 30 customers, it's up by three points. So, now it's representing 82%. So, that means that we have long visibility in our portfolio project or customers and delivering more and more full range of services since we are growing each year. If you look at the nearshore ratio, it's representing 43% in this quarter. It's up by 1% the last 12 months. I believe it will increase further going forward.
The target is 50%, but I think we will pass that quite soon because that's a part of the strategy and the scalability of the group, and also in the Third Quarter, we have a lot of social activity. We have a students' project during the summertime, etc. So, we also use spending a lot of time as a part of the culture to build the culture within the country, but also across countries. To summarize the Third Quarter, what we will do is to continue the solid profitable growth path in our core digital business, representing 75% today, so that will continue to grow. We show very strong growth there year-to-date, 23% and 10.5%, so that's a very solid foundation of Itera.
Then we will continue our investment in the new managed cloud services unit and also lift-and-shift the Itera data center customer into this new unit and also reduce some assets that we have in the existing data center. So, we are moving a lot of people competence-wise from the data center to the new managed cloud services, but also investing a lot of time in order to build the new competence for all of the people in Itera, and last but not least, since we are integrating the company, we will also manage Itera into one Itera management team. So, that's also a cross-business unit. So, there will be some of the business units we don't need to have separate business units. We merge these together and then also will have some effects on the overhead of the group.
So, that was what we had in the business review. And to finalize the outlook, the market, of course, is very attractive with high demand for digitalization in all Nordic markets. We will focus on the profitable growth and cash flow. And we will, as I told you about, we will have some investments in the new managed cloud services unit and also transfer our own data center into the cloud. And last but not least, we will continue the journey by larger projects and customers that will increase again the revenue visibility, efficiency, and the scalability of Itera. So, that was what we had in this presentation. So, we're looking forward to seeing you again in February when we are presenting the Fourth Quarter and the full year report for Itera. Thank you for attending today.