This presentation may also include some non-GAAP financial measures. Reconciliation between non-GAAP financial measures and our GAAP financial measures can be found at our www.tellabs.com website and in our SEC filings.Having said that, I'll turn the call over to Rob. Rob Pullen Thanks, Tom, and thank you everyone for joining us on our Investor call. Today, I'll review Tellabs strategy, its customers and progress during the second quarter and the first half of 2010. If you look at our first half, we successfully executed Tellabs strategy and the results show. Our strategy is to focus on the mobile Internet and it's producing profitable revenue growth. Tellabs business continue to perform better and better. If you think about it, we're working now with over 140 customers around the world. Now let's turn to our progress. Our second quarter revenue grew 10% from a year-ago quarter. Our GAAP gross profit margins increased to 53.5% which is the highest since 2004. We are in $0.16 per diluted share on a GAAP basis and that's up from $0.04 a share in the year-ago quarter. In a few minutes, Tim's going to give you more detailed overview of the second quarter. Tellabs performance is driven by our focus on the growth of the mobile Internet. We're advancing our strategy by focusing on investments in growth products and services. Tellabs growth results from an understanding of our customer's businesses from bringing them new innovative ideas and for making Internet and IP technologies and our professional services. What sets us apart is our focus on best-agreed products for specific applications, and our goal is to drive high performance in networks. That particularly important is smart phones proliferate and create unprecendented demands on mobile networks. Today, 85% of our research and development investment goes into our growth products. These include bojecan (ph) and IP data products that power the mobile Internet such as the Tellabs 8600, 8800 Systems and the Tellabs SmartCore 9100 platform.
We're also investing in advancing our optical and business service solutions with the Tellabs 7100 Optical Transport System, and we continue to invest in growing Tellabs professional services. Our strategy is working. We're winning new customers for all of our growth products. Its result, in the second quarter, 58% of our revenue came from growth products, that's up from around 52% in the year-ago quarter where we actually had a revenue recognition, a big revenue recognition for a customer in Asia-Pac.We're now intensifying our focus on innovation and growth products. During 2010, we expect to invest about 17% of sales in Research and Development, and we're hiring and recruiting Engineers, sales executives and services professionals, all who have Internet and IP expertise, and we're doing this around the world. We're doing it in Finland, China, India, Silicon Valley and here in Naperville, just to name some of the locations. We're also advancing our strategy by innovating in growth markets. Our focus is squarely on the mobile Internet. Customers are rapidly building network capacity to keep up with surging mobile data traffics from BlackBerries, iPhones, Androids, dangles and iPads to name a few. And we're only seeing the infancy of mobile video in a JumpTap-Campbell ( ph ) networks. Tellabs is primely positioned in the mobile Internet market with our mobile backhaul and, increasingly, our mobile packet core solutions. During the quarter, as some of you saw, Tellabs' stock dropped and was based on information about one of our customers, AT&T. And I want to address this issue head on. While I can't speak for our customer, we do know that AT&T is trialing a third vendor in its mobile backhaul networks. At the same time Tellabs fee is good demand from AT&T. We're in the network now, we're seeing growth on the embedded base and we believe we offer the lowest risk and the least cost evolution to the long-term evolution in the mobile backhaul. Read the rest of this transcript for free on seekingalpha.com