To facilitate a comparison between the reported periods, the company has presented both GAAP and non-GAAP financial measures. GAAP financial measures include expenses related to non-cash compensation, changes in the fair value of warrants, severance costs and the benefit from the sale of certain state income tax benefits derived from net operating losses. Operating income, net income and diluted income per share have been adjusted to report non-GAAP financial measures that exclude these items.
These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and the company's prospects for future. These measures should be considered in addition to result prepared in accordance with GAAP, but should not be considered as a substitute or superior to GAAP results. A reconciliation between GAAP and non-GAAP financial measures is included in the press release issued earlier today.
With me on the call are Jesse Sutton, Chief Executive Officer; and Mike Vesey, Chief Financial Officer. I'd now like to turn the call over to Jesse.
Jesse SuttonThanks, Todd. I'll open the call with some highlights and an overview of our performance in the second quarter. Mike will follow with a financial review, and I'll conclude with an update on our product slate for the rest of the year, after which, I'll be happy to take questions. Despite facing a very challenging retail environment, we are pleased to report that Zumba Fitness continues to sell, and we delivered another profitable quarter in Q2. While we anticipate the current slowness for the industry at retail to continue throughout next fiscal quarter, we're excited about our upcoming release slate and expect another strong holiday season for Majesco. In the second quarter, we reported revenue of $30.4 million, down 5% from last year. Keep in mind, according to NPD, the U.S. software market declined roughly 30% over that same time period. Our gross margin of 40% was up from 35% last quarter, and off slightly from 42% a year ago.