We finished the year strong in fiscal Q4 with record revenue of $307 million and non-GAAP net income of $29 million, or $0.25 per diluted share. Revenue was slightly higher than the midpoint of our target range as LEDs, lighting and power and RF delivered solid growth in Q4. Non-GAAP earnings per share were also on the high-end of our target range for the quarter, primarily due to continued improvement in gross margins at a lower tax rate than we had forecast.
The revenue trends in Q4 were as follows: lighting sales increased more than $14 million, or 16% from Q3 as we regained momentum with our agents and saw the initial benefits of our new product launches. LED sales increased $4 million from Q3, which was driven by growth in LED components. Power and RF sales increased almost $4 million from Q3, driven by growth in both product lines.
Non-GAAP gross margin increased 70 basis points to 36.3% in Q4, which was on the high side of our target for the quarter. The overall improvement in margin was driven by a combination of factory cost reductions, lower cost new products and slightly higher factory utilization. While the LED market remained very competitive, pricing declines were in line with our targets for the quarter. We continued to closely manage inventory across our factories, while working to respond to short lead time expectations in both the LED and lighting markets and support a significant number of new product launches.
Overall, we reduced inventory in Q4 by $8 million to 85 days. Cash and investments increased to $745 million due to solid execution, reduced capital spending, and higher profitability. Free cash flow was $47 million in Q4, and we remain in a good capacity position to support future increased demand in our LED product line. Overall, our strong balance sheet gives us the ability to continue to invest in growing our business and the market for LED lighting.