We're piloting our Xplora Premium and content last year. As Jason will present a little bit later, we have learned how to monetize those additional services. Adding more content have allowed us to increase the monthly price and add Xplora Premium on top. That's the key reason why we, as I would say, very few telcos are able to increase the ARPU. 10% uplift in our ARPU year-on-year from this year versus last year, from NOK 90 - NOK 100 per month. The second slide I would like to highlight as what we believe is a key accomplishment this half of the year, is that we have always been seen as a very strong company in the Norwegian market. A lot has been questioning what is our ability to scale the model into the global international market.
If we take a look at the watches sold in Q2, roughly 130,000 watches, as we now can see, only 14% stemmed from watches being sold in the Norwegian market. The rest from our remaining other global markets. Also, as we just said, more or less during Q1, but really going into Q2, we have been able to increase our MVNO footprint from 4 - 9 market. Not even all are properly live yet. The infrastructure is ready, now we can already see that almost 50% of our service revenue also now comes from market outside Norway. Previously, majority of this came from the Norwegian market, and we soon expect to other markets to be bigger than the Norwegian market. We are successful seeing the right trend of replicating our model globally.
We had some pretty specific goals and focuses for 2023. If you see from our capital markets day in April, we provided you with some specific focuses. We would like to revise our distribution agreement to have fewer distributors, better terms, and more efficiency on the distribution. We also said we would have significantly less CapEx this year versus last, because we said we should have completed MVNO setup, new product, and Xplora Premium. We also said we would like to increase the ARPU and OpEx in percentage of revenue should go down. So far, we can report that we have managed to get a new master distribution agreement. We had a message on that, and we will also come back to some of the details. We have seen a CapEx-- or we said we should have a CapEx reduction.
Last year, we had roughly NOK 40 million, targeting this year a range of NOK 20 million-NOK 25 million. Far, first half, we are around NOK 11 million, so we are well aligned with that target. Already said we had a ARPU increase of 10% and OpEx last year it was 54% of the revenue in Q2. This quarter, it's 45% of the revenue. I will also address some revision on the outlook statement at the end. One last slide before Jonas will take us through more some of the details. I think it makes sense to just have a look what was our vision and aspiration prior our IPO. If you look back into our visual official investment case presentation from October 2020, one of the most important slides was related to our business model. We said we should have a compelling model with annual recurring revenues.
We also said we would target to have a consumer product at roughly a price point, EUR 150 or EUR 125, minus VAT, ex VAT, with a target of having roughly 20% margin on our hardware. Before we ever had any MVNO mobile setup, we also targeted that we would like to have a subscription revenue per user per month, roughly at EUR 10, with a target to have margin 50%-80%. If you look into our reports from Q2 2023, we have a product portfolio of products from a end retail price at EUR 125 plus VAT, we now reported hardware margin at 35%. Also, if you take our subscription revenue, the average price, plus VAT was EUR 8.7.
Now, for the first time, we are also presenting, which Jonas will show you afterward, our margin on our services, arriving at very strong 83%. With that, Jonas will take you through some of the details.
Thank you, Sten. Good morning, everyone. Thank you for being here with us today. As Sten said, Q2 was an incredibly positive quarter for Xplora. In fact, it was the quarter in which we have had the highest revenue ever. It's even surpassed Q4, which is seasonally a very good quarter for Xplora. As we've mentioned previously, part of that is due to our master distribution agreement. It is valued at up to NOK 30 million in this quarter. However, it's likely that some of that would have been revenue regardless of this agreement. We also wanted to highlight that this revenue is up 72% quarter-over-quarter. As we showed last time we were here, we have had an incredible growth in annual recurring revenue.
If you look at the last four quarters, we have had recurring revenue of NOK 181 million , which at a gross margin of 83%, is pretty spot on, 150 million in gross margin. When Xplora listed on Euronext Growth, we were trading at an equity value over ARR of 20 times, now that is down to just 2 times our annual recurring revenue. This growth has been pretty solid, and looking at where that comes from, we had service revenue of 49 million in Q2. 53% of that was from Norway, with Sweden at 24%. In total, a little more than 75%. We see that outside of the Nordics, it's actually the U.S. that is the biggest market in terms of service revenue for Q2.
We also have had robust device sales in this quarter and in the first half of 2023. This is the historic breakdown of unit sales per quarter. Looking at activations per country for this quarter, the first time, we would like to highlight that we had 53% of the activations in Germany, with Norway and Sweden coming in pretty close at 14% and 12% respectively. In the place or tie for fourth place, we have both Spain and Finland at 6%, and we have currently, in terms of activations, the U.S. at 2% of our new devices or our new units. Going back to the P&L, we would like to highlight a few key figures first.
As I've mentioned, it was the revenue with the single, single highest revenue in that quarter, due to the implementation of the master distribution agreement and strong revenue growth. We also wanted to highlight a few other key numbers. As we mentioned, the gross profit was NOK 89 million, resulting in gross margin of 47%, and our EBITDA was NOK 17 million. We had operational expenses as a percentage of revenue, down from 54% in the same quarter the year before, and down to now just 38% in this quarter. As the master distribution agreement was a part of this year, Sten highlighted earlier that excluding that, it would have been 45% of revenue. We exit the year, the quarter, with NOK 99 million in cash and cash equivalents.
We also wanted to bring your attention to a fact that due to a report, reporting error from a service provider in Q1 2023, Xplora unfortunately reported about NOK 4.2 million as service revenue that should have been periodized and reported as deferred income on the balance sheet. The correct Q1 2023 service revenue was NOK 45.3 million, which is still up 35% year-over-year. Diving further into the P&L, we had device sales of NOK 141 million, which is up 90% year-over-year. We had service sales of NOK 49 million, up 42%. We wanted to highlight also that we had cost of sales at NOK 102 million, which is up 112%. This is explained by the composition of that revenue.
We now have, in this quarter, a much higher share of device revenue, which has a lower margin. So the revenue cost of sales looks like it's increasing more than revenue, but it just has to do with the composition of the two revenue lines. Payroll for the quarter was NOK 23 million, which is seasonally lower due to release of Norwegian vacation payment. Marketing was up 27% year-over-year, but down as a percentage of revenue from 15% to 11%. Other OpEx was at NOK 28 million, which is up just 14% year-over-year, and as a percentage of revenue, it was down from 22% last year to 14% this year, in the same quarter-over-quarter.
EBITDA, as we've mentioned, and we wanted to highlight again, was NOK 17 million for Q2, which is up from NOK 3 million in the restated Q2 2022 number. For the first half of the year, this brings the EBITDA to NOK 14 million, and the EBITDA margin for Q2 alone was 9%. We also wanted to highlight that depreciation from the Xplora Mobile acquisition still makes up the majority of our depreciation and amortization, and it currently comes in at about NOK 9.3 million every quarter. In terms of the balance sheet, there are a few items that we wanted to highlight as well. First of all, is the NOK 22 million decrease in inventories as a result of the new master distribution agreement.
Other receivables also has decreased, and they've largely consists of prepayment for goods in production that is to be sold in the second half of 2023. In total, we had an increase of cash of NOK 45 million in a quarter that also reduced debt by NOK 11 million. That is down payment for production of goods that we've already secured. This results in now a net working capital of NOK 70 million. Just highlighting the cash flow and the cash balance. As you can see, we started the quarter with about NOK 55 million in cash. There was a NOK 2 million negative profit before tax, and then, sorry, NOK 14 million in depreciation and amortization. Then the majority of this improvement in cash comes from working capital changes.
As Sten mentioned, we had about NOK 7 million in CapEx and NOK 11 million in change in debt, a down payment, which gives us a total cash of NOK 99 million exiting Q2. We hope to have, as I, as I've said, the cash flow from operating activities was at NOK 36 million year to date, and we expect this to increase throughout the second half of 2023. My colleague, Kjetil, will take you through the details on recurring revenue. Operational update.
Thank you, Jonas. Good morning, everyone. I will start by summarizing the highlights of the development of our four key revenue streams, and then I will go into each of them a little bit more in detail. If we start with the smartwatches, we had a tremendous growth of 90%, as Jonas already stated, from NOK 75 million-NOK 141 million. The service revenue is combined by three factors. One is the mobile subscription plans, there is the Premium service plan revenue, and we have a new revenue stream that we want to discuss a little bit this time, which is the telco revenue share model that we have now introduced.
When it comes to the service revenue stream, recurring revenue, it increased year-over-year for the quarter from NOK 35 million-` NOK 49 million, which is an increase of 42%. The mobile subscriber base increased from 134,000 to 170,000, a growth of 27%, and we ended the quarter with close to 17,000 Xplora Premium. The telco revenue share means that the telcos, who so far have been buying only smartwatches from us, now also are willing to do a revenue share, meaning paying a percentage of their recurring revenue to Xplora. I'll come back to that a little bit more in detail, but I think it's a very interesting development. We have done a model change, a portfolio change, when it comes to our smartwatch portfolio.
We introduced XGO3 and X6 Play to the market, and after the quarter ended, we have also started selling the new top-of-the-line model, the X6 Pro. We have three different positions for these products. We have XGO3, which is the entrance model to the consumers. We have the CES award-winning model, X6 Play, and we have the flagship model, X6 Pro, that we will also shortly introduce in the Nordic market. These are placed with a recommended retail price, which starts at EUR 149, EUR 199, and EUR 249. The revenue split or sales split between the two models, XGO3 and X6 Play, is 46% and 54%, respectively.
The blended gross margin on those models is 37%, and we sold in total in Q2, 127,000 units with a revenue of NOK 141 million, which again, almost 90% growth. When it comes to the mobile subscription base, there is a quite a big seasonality in the sales development, and we have already a quite a big base. We increased the subscriber base by 27% year-over-year for the quarter, ending at 170,000 mobile subscription plans. That was a net growth of 36,000 or equivalent to 27%. On top of that, we sold or have a subscription base of 17,000 Xplora Premium. We also report a strong growth in the service revenue, plus 42% year-over-year.
You see here that the growth in the service revenue is higher than than the net growth indicate something on the ARPU development that I will show on the next page. We had close to NOK 50 million service revenue in Q2. We said 83% margin, and this is very, very high, both compared to regular telcos and very much more than a traditional MVNO can deliver. You may ask, what is the reason for that? It's the way we have optimized the price versus the data consumption of our products. That's the key reason for the very high margin that we have on our mobile subscription plans. On top, of course, the Premium service, which also contributes to a very, very strong gross margin.
42% year-over-year growth for the service revenue. When it comes to the ARPU, we monitor this over a long time period, which you can see on the graph on the left-hand side of this picture, where we have done multiple price increases over the years. You will see that we show for the quarter-over-quarter, 2022 versus 2023, an accelerated ARPU growth and recurring revenue growth. The reason for that is that we have now introduced and got a certain volume of the Premium service. There is a price difference between the basic service subscription and the Premium service subscription, and we also did a general price increase on the basic services from the 1st of January this year.
You see that the graph on the right-hand side, shows a stronger growth year-over-year, Q2 last year versus this year, than that we have over the last 4 years. Something that will explain why on the next page, when we come to the telco revenue share, why this is possible. Let's have a look at the subscription rev number overall in the Norwegian market. There are roughly 6 million mobile subscriptions, including machine-to-machine, in the Norwegian market. The 3 network operators over the last 3 years have basically just moved in between them the difference in the growth and decrease of the customer bases. While there is an other there at the bottom, that shows some growth.
There are 420,000 subscriptions in the Norwegian market that are served by other MVNOs, of which we are one of those. You will see on the right-hand side that the blue one is the development over the same period for the Norwegian market, where we have more than doubled our customer base in Norway. On top of that, having MVNO operations now in 9 markets, we have grown from 53,000 subscriptions into 170,000 subscriptions. This development, of course, triggers a certain interest among the telcos. We talked about on the previous quarterly presentation, that we are entering into this new revenue stream, and we can announce that we have succeeded to secure, implement, and launch 2 of these deals.
Both are in the Scandinavian, or let's say Nordic market, where we actually, the telcos come to us and ask, "Can we start selling Xplora?" We have been a bit reluctant to that, of course, because we have, in all the Nordic countries, our own mobile subscription. They are now willing to do a revenue share. That means that we have given 2 telcos access to our products in the Nordics. We have agreed with them that instead of having the traditional hardware stream, we need more revenue and margin on top of it. We have succeeded going from the blue pie, which was the previous telco hardware margin from a traditional sale, into the full pie, splitted by different recurring revenue streams.
We have four times the gross margin over the customer lifetime, compared to only selling hardware to them. That's a new revenue stream for us, that we have successfully launched in the Nordics, and the goal is then to also introduce this to other telcos in Europe. On top of the regular hardware margin, there is an additional hardware margin. We receive a revenue share on the telcos' SIM revenue, and we sell the Premium service directly through the app. This sums up to four times the margin that we used to have previously over the customer's lifetime. I guess you're curious about how this is going forward.
We have now tried to place the different operations in a market maturity curve, where we have placed Norway in the maturity section, with ±20% of the kids in the age group being an Xplora subscriber customer. We don't know if this 20% is the point where we'll actually flatten out or we will have further growth. We know that close to 100% of all 11-year children have a smartwatch. What about the gap between 20% and 100%? We don't know yet. Norway is the market where we have the highest penetration among children for our products. We see that we have introduced, quite recently, the MVNO operation and the sales in France, UK, U.S., and Spain.
We have been in the market for a longer period in Germany, Sweden, Finland, and Denmark. Then, of course, we also have what Sten will come back to in the summaries, outlook, that we have additional plans for, for, building to, to further growth.
That concludes my section. I will introduce hand over to Jason.
Good morning. Thank you for all joining us today. What I'm gonna do to start off today is I'm gonna start just by giving you a quick overview of the Platform and Services division, what we do in Xplora, and the three main software elements of our business. On the left-hand side, we have our Xplora app, which is our core IoT. In the middle there, you can see our Activity Platform, and newly released is our Xplora Premium model, where we're now monetizing our services, as you've heard some of that so far today. First of all, the app itself. The app is there as the core product in connection with the child's smartwatch. This allows the parent to ensure safety and security is met all the time.
One of the key things of this as well, which I'm really pleased to announce, is we're now kidSAFE listed and certified that we are a smartwatch and family product in the market. Within that app itself, you can have the regular products and services available to yourself, so parents can call children, send and receive messages, set safe zones, and create location services to track where a child is, so they never get lost. We have 1.6 million active app users in the app at the moment. On a daily basis, we average 493,000 calls, with 3,357,000 messages sent every single day. We have a very good traction in volume. This is the gateway to everything we do. On to our Xplora Activity Platform.
In 2022, we went through a major upgrade, redesigning our platform, looking at new user experience, and introducing a whole host of new content, as you can see on screen in front of you. In doing this, we also introduced a layer of Xplora Premium, which is the first element of our test pilot in our services to our customers or with us already, 238,000. The 179,000 you can see on screen there. Through the back end of this, this year, this last year, we piloted the content, we piloted the subscription services, different pricing models, to make sure that the data was telling us what was the best service for our customers. The way the Activity Platform works is back off, it's off the back of the watch.
Every 1,000 steps a child makes, we reward them with an Xplora Coin. Those Xplora Coins are then exchanged onto the activity platform for children to have fun, learn, and play. They can play games. They can join adventures. We now have a new e-learning section where they can learn about anything and everything in the world. That led us into Q1 of this year. We then decided we wanted to really release this to all markets to make a very simple and easy service. We brought everything together as 1. We now have 1 SIM product with 2 price plans. You buy a basic price plan, or you buy a Premium price plan. The difference between the 2, the Premium price plan gives you access to the whole Xplora universe, giving you all the content, all the features and services with that. We have that.
That's now integrated with our app as well, so a new customer can onboard with us as far as buying the basic or Xplora Premium, or they can upgrade at a later stage. Which leads us into Q2, the results. We now have 17,000 paying subscribers. On average, when a new customer onboards with us, they average between 20% and 30% choosing Premium. That has now increased our ARPU per customer per month around NOK 30. As you can see on the right-hand side, we now have all our areas covered. We can sell online, via retailers, in our via telcos, and through our applications itself.
The last page I'm going to leave you with is this: In analyzing the data, because everything has been driven by data analysis over the last 12 months, we have learned when a child and a parent signs up to the Xplora Premium, they're actually walking and being active 60% more than a basic child. On a daily basis, each one of those Premium children are walking 5,938 steps more. It's proved that the content we've provided and the service we've provided that they're paying for, is actually keeping children active. Which goes right back to the start of when we started our business as a mission statement, introducing children to the digital world in a safe and secure way, but making sure they keep active. Thank you very much.
Thank you. Allow me to just provide 2 slides, looking a little bit forward, the road ahead. Status quo entering into second half of this year. As Jonas mentioned, we had roughly NOK 100 million cash in the bank. It's also worth mentioning that on top of NOK 100 million in the bank, we also have a net inventory value of additional NOK 45 million. If you take all our inventory we keep ourselves, minus all the debt related to it, it's also plus NOK 45 million on top. With the growth of recurring revenue from our new services, SIM and the new Xplora Premium, entering into September, we are actually generating NOK 18 million of monthly service revenue when the month start growing. More than NOK 200 million annual recurring revenue so far. Again, 83% margin, highly prioritized focus for us.
When it comes to R&D, our 9 MVNO setups invested, ready, generating revenue. We have built our 3 new product with a longer lifetime on the new product, hence the reduced CapEx requirement this year, and we have built it to scale, which I will come back to. It's difficult to predict anything related to the market, so we definitely should not we either. It seems that the market for kids wearable seems to be more resilient than in general other tech categories, which most analytics still refer to roughly 15% of CAGR, increasing the category. Very importantly, to mention as well, there is, or there seems to be, new upcoming, very exciting verticals, categories within the wearable category in general. With that status quo, we have learned the hard way. I would say we do not take nothing for granted when it comes to sale.
We have never been fighting harder for any contract sales whatsoever. We'll keep on pushing. However, I think it's also fair to say we have never been better positioned than now either. We'll continue a strong focus on our core, which is three new products in nine market where we have SIM connectivity, trying to increase ARPU. We will have a laser focus to optimize cost and efficiency to drive profitability. We will do this 80% of the time of what we are doing. The remaining 20%, we are investing in our future. On the last capital markets day, as well as Q1, we also stated in our outlook that we will be exploring options for future family IoT growth. We would like to make a additional nuance detail to that statement.
As Kjetil mentioned, we have now launched recently our new X6 Pro hardware platform, which is the most sophisticated hardware platform within our category. That platform is also geared and suited toward meeting the requirement from the senior market. We are targeting to complete prototyping for the senior market in Q4, only to be in a position to potentially explore and test that market 2024 going forward. We are disclosing information that a prototype will be arriving in Q4. One additional nuance to the statement, exploring future family IoT growth. We do potentially see, for the future, a opportunity for our now finally invested, ready platform within wearable IoT. Remember, for every 100,000 kid watch we are selling in our core market, give and take, 500 to 1 million other units are being sold, kid smartwatches.
The majority of that proposition is typically a standalone hardware product. It could be someone selling 10,000 on Amazon, 50,000 in another market, having a retail agreement, and so on. The majority of those sales is a standalone hardware, roughly at a price point at $100, with a roughly 20% margin. That leaves $20 as a profit. We know that's a very, very tough business model to make money on if you don't have all the services, and those units are being sold regardless. What we would like to be in a position to test 2024 and forward, is to ask all those player to do exactly what they are doing today, sell 50,000 units, whatever that might be, do exactly the same thing, but gently add our SIM and services into the same box.
By doing so and nothing else, having a rev share from Xplora, they might triple to 5 times increase their current gross margin by doing nothing else. We believe potentially that should be a win-win. This will not be introduced this year, but we are preparing our platform. We are focusing on some effort to potentially in 2024 forward, test that value proposition. Takes us to the outlook. This is the same outlook statement we had in Q1. We are now doing 3 minor comments to it. Number 1, the market's still expecting 50% CAGR or growth. Our objective now will be to beat the average of the market. We also said we had a target entering this year to have 175,000 paying subscriptions. We are now increasing that slightly to 220,000.
We are continue to focus on our OpEx reduction, again, in a % of our revenue. The revenue is growing, but as a %, we'd like to reduce it, as also Jonas stated. We remain very focused, extremely focused on driving profitability, and we are making those two additional nuances on our comment regard exploring option, future or future options for family IoT growth. We're focusing now to prepare ourself within senior category and a pure business-to-business software as a service proposition for testing in 2024 going forward. With that, quite spot on time, I would like to move into our Q&A session. I will have Jonas and Kjetil on the stage with me, and... A lot of question already coming in. In order to make this as efficient as possible, I think we will start with the questions that has already come in online.
I will address the questions, we'll run through them, and then we'll circle questions to the audience. Let's see. All right. First one for you, Kjetil: Which country contributed most to growth in revenue, service, service revenues? Which country contributed most to the growth in service revenues?
That is actually U.S. We have, of course, it's a huge market. We're starting to see the uptake, and we also have a very high ARPU, average revenue per user in the U.S. It's, it's the U.S.
Okay. Jonas, what's the key drivers for being able to reduce OpEx? Then OpEx in % of revenue, first half year.
Yeah. I mean, this quarter, we have been very focused on looking at all the different operational costs that we had last year, eliminating what we can, where we can, without reducing the impact on revenue. That's been our main priority. In terms of specifics, we've seen it marketing to get as high ROI as possible for the marketing budget we have, and also looking at other operating expenses, such as offices and other licenses.
Okay. back to you, Kjetil, again. Which country has performed, surprised the most in terms of new watch sales? Not service revenue, but watch sales.
Well, I would actually highlight Spain. I guess you have all been on vacation in Spain and are very familiar with El Corte Inglés, leading retailer. We have invested quite a lot in training in Spain. I think we can report that we are very happy with the development. Post the quarter, we also see very good development in Finland.
Thank you. All right, another one coming in. Yeah, that's a good one. That's for you, Kjetil, as well. Any thoughts about eSIM in the future?
Oh, yeah. Yeah, the X6 Pro is a pure eSIM product. That's the reason why we introduced it in Germany first in July. We will introduce it in the Nordic countries. We are just in the process of finalizing the eSIM profile on our MVNO platform in 3 of the 4 Nordic countries. We'll very soon launch it in the Nordics as well.
All right. Jonas, yes. Why did you have to restate Q1?
Well, it was a reporting error from our service provider for telecommunications services and subscription management. Unfortunately, there were some new products that we launched, including subscription with Premium, that were not accounted for in the usual manner. As such, they were reported as revenue when they should have been reported as deferred income on our balance sheet.
All right. again, Jonas, what's Xplora's liabilities in short and long, long term?
If you refer to debt here, we have a long-term liability to Innovation Norway, which we are very linearly paying off, and the short-term liability is to Nordea, the short product financing that we have agreed with them from the November of last year in the NOK 100 million range.
Okay. All right, one more question. First, a good intro there: "Amazing results so far." Good. "Can you elaborate on the distribution level in U.S. and next step in U.S., online versus retail, brick-and-mortar?
Yeah, in the, the U.S., we currently sell through our own webshop. That's the smallest channel we, channel we have. We have been on Amazon for a while, showing a very good development also in Canada, by the way. Then we sell in some of the larger retailers online so far. We have, we had a big campaign with Sam's Club, that I guess you are familiar with, and that has also has proven, proven successful. It's quite not, not huge market, could have been better, but I think realistically it's a very big players that takes time. We see it's going in the right direction, definitely.
Excellent. I think that was all the questions. Might give the word to the audience, if any questions not been addressed, we are happy to do so.
Mm-hmm.
Yeah, I understand that, NOK 30 million was related to this agreement, with the distribution agreement. Can you, say how much of that was affected of the EBITDA? Also, is that a kind of buildup of inventory so that will reduce future sales, or, or can you just explain a little bit around that?
Yeah. I can do a first comment, and then you can elaborate. It's a good question, and it's difficult to give an exact number because what we are doing is going from quite a few different distributors, six to seven, down to one. Meaning that part of that sale, as you wanna show it on the graph, potentially a little bit more than half, would have been sold to the various retailers in any way. The effect we had immediately was to get one shipment to the now one big distributor, that again, will sell, sell it or deliver it directly to the retailer. Best estimate would be to say slightly over 50% we would have sold directly in any way, so some direct effect.
We haven't calculated the direct EBITDA effect, since it's a little difficult to be specific on, on the number, and also the contribution of other OpEx costs related to it. At least we can say a little bit more than half of the sales would have been provided to the different retailers, regardless. Maybe you, Kjetil, can elaborate a little bit more on the inventory and how they cycle and project?
I mean, we, we, we see also post the quarter that the amount that the difference was, was sold very quickly in July anyway. We, we see a very positive development in many markets. As we stated in the previous quarterly report, we said up to NOK 60 million, there are different phases of this. We transferred the volume related to distributors. We have an additional volume related to the Nordic that we didn't transfer in the quarter, we also have the Amazon and the web fulfillment business that will follow. We do it gradually. That was the main reason why we didn't transfer, let's say, all NOK 60 million of the up to NOK 60 million that we stated. Parts of it.
I have a question related to the depreciations, regarding the mobile company that you bought.
Mm-hmm.
You said that the quarterly depreciations is NOK 9.3 million.
Yep.
How much is remaining, and for how long time will we keep on deducting depreciations?
I currently don't have the specifics on exactly how much is remaining, but I know that we will keep, reducing that value, over the next few years. I can look into that and give you the updated numbers.
Okay, thank you.
Øystein Lodgaard, ABG. I have several questions. First, regardless of the Brodos agreement or not, sales growth picked up quite significantly this quarter. Was that market-driven? Did you see an improvement in the market, or was that due to several, like, initiatives that you initiated?
We have widened the distribution. I talked a little bit about Spain. We have a tremendous growth on Amazon across several markets.
Mm-hmm.
U.S. volume is growing, web sales is growing. Finland, Denmark, Sweden, show very positive development. We really see that some of the markets where we entered into some time ago are following that growth curve that I showed in my last slide in my presentation.
Mm-hmm.
I also think it's worth mentioning and add to that, that our competitive position is getting even stronger due to the fact that we mention our competitors primarily have only hardware, 20% margin. We have the ability to have multiple times that revenue and can invest more in marketing. Also invest more jointly with the telco and retailer to drive further growth. Also some of the competitors that's been in the market has also been less visible over the last quarters, and some even have disappeared. Our position in market is definitely getting stronger as well.
Mm-hmm. Is it, is it your impression that the category that you are in, kids' smartwatch, specifically improved during the quarter? Or is it the strong improvement that you've seen, is that primarily related to you taking market share?
I think it's difficult to be specific, but I try to showcase it with the fact that the kids' smartwatch category has seemed to be more resilient. In a time where it's a lot of uncertainties, you seem to focus more on security in general. We saw that previously as well, meaning that when you have to more prioritize your investment as a family, you continue to keep the investment in your kids' safety. I think that's why it's been more steady in our category, while other tech categories has declined. At least that one of the reasons. Like Kjetil mentioned, we are just becoming more visible and have a even stronger brand recognition in more markets. Also what we have tried to say for the previous quarter reports as well, it takes time in the larger market.
As Jonas pointed out, now it's very interesting to see that Sweden becomes at the same level as Norway, finally. Sweden is 2x the size. It's really when these big markets are really starting to generate awareness, we will see bigger and bigger results as well.
Mm-hmm. In the U.S., can... Kjetil, you were quite positive on the development in the U.S.. Still we haven't seen an improvement in, in the number of subscribers there, quarter-over-quarter. Can you just explain why that is?
Well, we will in Q3, or let's say, half, second half of the year, introduce our own MVNO service, and we know that we will have a higher gross margin when we introduce MVNO. So we are also preparing really to focus our marketing efforts from the time when we introduce the MVNO service in the U.S.. So actually, we get a revenue share from the setup that we have, but it's really from the time when we introduce our own MVNO services in the U.S., that we can invest and grow the customer base. The ARPU is, if not the highest in, among the portfolio, it is a very high ARPU in the U.S. market.
Last question from me, on, on costs. You, you previously stated that you were expecting to reduce cost by 10%-20% compared to the 2022 level. Now we see costs are increasing. Have you moved away from this target, or, or are there still more cost improvement initiatives that we should expect in the second half of the year?
I can take that. We've always tried to say that we will reduce OpEx as a percentage of revenue and try to eliminate some of the OpEx that we had in 2022 to reduce that. As Kjetil may have mentioned previously, he has done a fantastic job of cutting some of those costs. As our revenue keeps increasing substantially, there will be new operational costs that is coming in addition to what it's previously been. We will work as diligently as possible to get operational expenses as a percentage of revenue to below 50%, where in Q2 last year, it was at 54%.
Thank you.
All right. Any last questions? If not, we will be available, however long it takes, to have a 1-to-1 conversation. We very much thank you everyone for joining us. We are happy to see more people joining live here. Also thank you for everyone logging in online. Yeah, we welcome a good conversation afterward.
Thank you.
Thank you so much.