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You should note that the guidance we provide today is based upon forecasts that require us to make certain estimates, judgments and assumptions using the information that is available to us at this time. It should be clearly understood that our actual performance and financial results may differ substantially from our forecasts and the other forward-looking statements we make today.Specific factors that may affect our business and future results, including among other things, general economic conditions, are discussed in the Risk Factors section of our 2009 annual report on Form 10-K and subsequent SEC filings. A partial list of these important risk factors is set forth at the end of today's earnings press release. As always, we undertake no obligation to revise or update publicly any forward-looking statement except as required by law. Please refer to the Investors section of our website for additional historical, financial and statistical information, including the information required by SEC Regulation G. In addition, we have placed a slide deck, which is available now in the Investor Relations section of our website, that is on the right-hand side of the page under Q2 2010 Earnings Information. For increased transparency, we've incorporated additional tables, information regarding our future guidance, historical performance and segment operating income. With that, now let me turn the call over to Scott. Scott McGregor Good afternoon and thanks for joining us today. Broadcom continues to excel in both product leadership and financial discipline and we've performed particularly well in the June quarter, with better revenue and earnings than we originally anticipated, driven by upside demand in several of our largest businesses. Broadcom's quarterly total revenue of $1.6 billion and product revenue of $1.55 billion reached record levels. This is up more than 10% sequentially and over 60% from the strong sales growth quarter one year ago. Sequential revenue growth in the quarter was led by strength in our Broadband and Mobile & Wireless businesses, which were up 15% and 14% respectively. Our engineering investment in these areas over the last several years have enabled us to field an exceptionally strong product portfolio and we're now growing our market share. As a result of our solid cash flow from operations, Broadcom's cash position increased approximately $135 million sequentially to $2.5 billion, even after repurchasing over $120 million in stock and paying dividends of $40 million.
Broadcom is in the fast-growing wired and wireless communications markets, with cutting-edge solutions for a growing number of connected users who are demanding more content and bandwidth. Broadcom excels at silicon integration and our focus remains creating outstanding communication and connectivity products that enable us to grow our market share. We've also been extremely successful in generating profitable growth as both our Q2 and first half results delivered significant expansion in operating margin. Our outlook for Q3 indicates a continuation of this strong momentum going forward.I'll now turn the call over to Eric for details on the second quarter financial results and our third quarter guidance. Eric Brandt Thanks, Scott. Moving to the financial overview. To summarize for Q2, total revenue of $1.6 billion, including $1.55 billion in product revenue. Q2 total net revenue was up 54% from prior year and 10% from Q1 level. Total gross margin increased 10 basis points from Q1 to 52.6%. Product gross margin in Q2 increased 30 basis points to 50.8% versus 50.5% in Q1. Q2 2010 GAAP R&D plus SG&A expense was $565 million compared to $554 million in Q1 of 2010. These expenses increased only $11 million over Q1 due in part to several takeouts sliding into the beginning of Q3. GAAP earnings per share for Q2 were $0.52 compared to First Call consensus of $0.46 per share. Stock-based compensation dropped to 7.4% of net revenue to approximately $119 million and represented approximately $0.22 per diluted share. Cash flow from operations for Q2 was approximately $196 million. Our cash and marketable securities balance was up to approximately $2.5 billion at the end of the quarter. Read the rest of this transcript for free on seekingalpha.com