Today's presentation contains certain statements and information that are not based on historical facts and constitute forward-looking statements. These statements include our financial guidance summary for the third quarter of 2012 and commentary on our outlook and business drivers. Our forward-looking statements are based on a number of material assumptions including those listed on page 2 of the webcast presentation which could prove to be significantly incorrect and our forward-looking statements are subject to substantial known and unknown material risks and uncertainties. I draw your attention to a longer discussion of our risk factors on our annual information form and management's discussion and analysis which may be found on SEDAR and EDGAR as well as our other regulatory filings.This presentation webcast should also be viewed in conjunction with our press release and with the supplementary information on our website which provides a complete reconciliation of our GAAP and non-GAAP results. I will now turn the call over to Jason for the business overview. Jason Cohenour Thank you, Dave. I'll start with a high-level summary of our second quarter 2012 business highlights. Overall I'm very pleased to report that Q2 was an outstanding quarter for Sierra Wireless with operating results well above expectations. Revenue grew by nearly 20% on a year-over-year basis to $167.4 million in the quarter. Driving this growth was a combination of exceptional sales of 4% AirCard products, another quarter of strong demand from PC OEM customers, and steady growth in our machine-to-machine business. Non-GAAP gross margin improved to 30.7% and non-GAAP operating expenses were lower than expected at $38.8 million. The combination of strong revenue, higher gross margin and lower OpEx led to better-than-expected non-GAAP earnings from operations of $12.7 million and non-GAAP EPS of $0.30. While driving these great operational results, we were also busy on the strategic front, announcing and recently closing the acquisition of Sagemcom's M2M business, significantly bolstering our leadership position in the growing M2M market.
Keeping a closer look at our mobile computing line of business, Q2 was truly an exceptional quarter. Mobile computing revenue of $89.9 million represents 36% year-over-year growth compared to the second quarter of 2011 and gross margin was a very healthy 28.1%. AirCard and PC OEM sales each contributed significantly to the strong results.Revenue from our AirCard mobile broadband devices was up 32% year over year, driven by new product launches such as our unique Tri-Fi Hotspot at Sprint, new channel launches such as Virgin Mobile, and continued solid demand for our 4G AirCard products from key operator customers including AT&T, Sprint, Telstra, Rogers and DNA. Revenue from the sale of embedded modules to PC OEM customers continue to grow at a strong pace in Q2 and was up 50% on a year-over-year basis. During the quarter we experienced solid contribution from a broad range of PC OEM customers including HP, Fujitsu, Lenovo and Panasonic. Revenue contribution from Japan was once again exceptionally strong as we continue to benefit from large rollouts of LTE-enabled notebooks with enterprise customers in Japan. We also expanded our PC OEM product portfolio during Q2. In June we announced the introduction of the world's thinnest 4G LTE embedded module, the AirPrime EM7700. At only 2.5 mm thick, the EM7700 is designed specifically for us in ultra-portable notebooks, Win8 tablets, and other devices with thinness as a critical design criteria. In Q2 we secured new design wins for the EM7700 as well as other embedded module products with tier 1 PC OEMs for platforms that we expect to launch later this year and into 2013. Looking forward, we're optimistic about the continued growth prospects in our mobile computing business based on the strength of our channel position, our robust 4G product portfolio and pipeline, expanding LTE network deployments, and new pricing plans from operators. Read the rest of this transcript for free on seekingalpha.com