Cree, Inc. announced revenue of $415.1 million for its second quarter of fiscal 2014, ended December 29, 2013. This represents a 20% increase compared to revenue of $346.3 million reported for the second quarter of fiscal 2013, and a 6% increase compared to the first quarter of fiscal 2014. GAAP net income for the second quarter was $35.7 million, or $0.29 per diluted share, an increase of 75% year-over-year compared to GAAP net income of $20.4 million, or $0.18 per diluted share, for the second quarter of fiscal 2013. On a non-GAAP basis, net income for the second quarter of fiscal 2014 was $56.8 million, or $0.46 per diluted share, an increase of 54% year-over-year compared to non-GAAP net income for the second quarter of fiscal 2013 of $36.9 million, or $0.32 per diluted share.
"Fiscal Q2 was another strong quarter as revenue increased to a record $415 million driven by strong growth in LED fixtures and LED bulbs. For the first half of fiscal 2014, revenue is up 22% from the first half of fiscal 2013 and Non-GAAP operating profit is up 38%," stated Chuck Swoboda, Cree Chairman and CEO. "Our strategy is working, the business is growing and we've made great initial progress building the Cree brand."
Some key financial metrics include: Gross margin decreased 110 basis points from Q1 of fiscal 2014 to 37.5% on a GAAP basis and decreased 100 basis points to 38.2% on a non-GAAP basis. Cash and investments increased by $95.6 million from Q1 of fiscal 2014 to $1.2 billion. Accounts receivable (net) increased by $4.3 million from Q1 of fiscal 2014 to $213.5 million, with days sales outstanding of 46. And Inventory increased $17.1 million from Q1 of fiscal 2014 to $234.5 million, with days of inventory of 81 days.
For its third quarter of fiscal 2014 ending March 30, 2014, Cree targets revenue in a range of $390 million to $420 million with GAAP gross margin targeted to be 37.7%+/- and non-GAAP gross margin targeted to be 38.5%+/-. Our GAAP gross margin targets include stock-based compensation expense of approximately $3.2 million, while our non-GAAP targets do not. Operating expenses are targeted to be similar to Q2.
GAAP net income is targeted at $24 million to $32 million, or $0.19 to $0.26 per diluted share. Non-GAAP net income is targeted in a range of $42 million to $51 million, or $0.34 to $0.41 per diluted share. The GAAP and non-GAAP net income per diluted share targets are based on an estimated 123.5 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to the amortization of acquired intangibles and stock-based compensation expense of $0.15 per diluted share.