Ralph will now provide an overview of the quarter. Ralph.Ralph Quinsey Thank you, Steve. I am very pleased with TriQuint’s results this quarter. We delivered $207 million in revenue, non-GAAP gross margin of 42%, non-GAAP operating margin of 16%, and non-GAAP earnings of $0.20 per share, $0.05 above our previous guidance. Our strong earnings results were due to a higher mix of networks, defense, and aerospace revenue, improved factory performance, and lower legal expenses than expected. Steve will provide more details of our financial performance during his comments. Within Mobile Devices, the largest of our three major markets, revenue is up 10% sequentially, and 31% year to date as compared to the first six months of 2009. Consumer demand for wireless broadband is fueling rapid Smartphone growth bringing four to six times the RF dollar content per Smartphone as compared to a voice only phone. Additionally, we have wide customer penetration. In fact, we have content with all leading Smartphone providers. The RF section has become more complex within Smartphone with requirements for voice, multiple databands, Wi-Fi, and GPS. TriQuint is unique as a single supplier for this complete solution, regardless of standard, band, or technology. For example, integrating duplexers with amplifiers for improved size and battery life is an area where TriQuint has a competitive advantage. It is clear to me the market is moving from discreet components to integrated solutions for one simple reason. Integration drives improvement of performance, cost, and size. Our breadth of technology, including gas, filtering, and switching gives us a competitive advantage to optimize these solutions true integration. I continue to expect solid revenue growth in mobile devices driven by new opportunities in growth of existing platforms and products. Additionally, I want to say how proud I am of TriQuint recently winning a quality award in important design wins at Samsung. We greatly appreciate our customer’s recognition of our efforts.
Now, switching to our networks market where we saw recovery of demand, and stronger revenue than expected in the quarter. Networks revenue is up 53% year to date compared to the first six months of 2009. The networks market is composed of sub-markets where RF performance, such as high efficiency, high power, and superior linearity is critical for our customers. TriQuint is widely recognized as a performance leader in these markets.Our networks products typically generate higher-than-company average gross margins. The higher mix of networks revenue contributed to our improved gross margins at the company level in Q2. The three largest contributors to Q2 sequential growth in networks were filters for mobile Wi-Fi access points, driver amplifiers for 40-gigabyte optical networks, and amplifiers used in cable and fiber to the home networks. For the first application, our customers now combine Wi-Fi and 4G technology into a single portable unit providing the ability to create a mobile Wi-Fi hotspot just about anywhere. Some examples include the Sprint overdrive and the Spring EBL4G. The mobile hotspot had the capability to simultaneously create a wireless LAN and connect to the Internet through the 4G network. The technology challenge is the adjacency of 4G and Wi-Fi spectrum. This can cause significant interference and poor performance for the user. TriQuint’s BAW filter products prevent this interference and are in high demand for this application. A portable hotspot requires multiple filters, and we typically have several dollars of content in this type of application. In the second growth area, 40-gigabyte optical drivers, TriQuint is now seeing the revenue growth anticipated last year when we announced that TriQuint was selected as Whyway’s key supplier for optical products. In addition to Whyway, we are now winning designs with other customers for our 40 gigabyte products. These products are used in metro area upgrades to support the increasing data traffic driven by social networking, rich multimedia services, and increased Internet usage.
Lastly, as cable and fiber to the home networks evolve to support video-on-demand, data and voice, new technologies are needed, such as Edge QAM. Edge QAM enables cable operators to increase and optimize the bandwidth of their networks by dynamically switching the flow of video data and voice to only those hubs and customers who need the service. TriQuint supplies some of the world’s best linear amplifiers optimized for this application.Read the rest of this transcript for free on seekingalpha.com