Chuck Swoboda, Chairman and CEO
Thank you, Raiford. Fiscal Q2 revenue was $413 million, which was on the upper end of our target range due to strong growth in LED lighting. Non-GAAP net income increased 28% sequentially to $38 million or $0.33 per diluted share due primarily to improved gross margins and an $0.08 per share tax benefit related to the retroactive reinstatement of the federal R&D tax credit. Excluding the catch-up tax benefit, non-GAAP earnings per share would have been $0.25 which was above our target for the quarter.
The sales trends for Q2 were as follows: lighting revenue increased 33% year-over-year and 3% sequentially to $230 million, driven by double-digit growth in LED fixtures, which more than offset the expected lower LED bulb sales. LED revenue decreased 29% year-over-year and 13% sequentially to $152 million due to the lower LED demand primarily in China. Power and RF revenue increased 18% year-over-year and was similar to Q1 at $31 million. Q2 non-GAAP gross margin increased 150 basis points sequentially to 33.9%, due primarily to improved lighting margins, which more than offset the lower mix of LED sales.
The gross margin trends were as follows: Lighting segment margins increased to 28.1%, driven by improved lighting execution and a more favorable mix. LED segment margins were similar at 39.1% due to strong factory cost management, which offset significantly lower factory utilization. Power and RF segment margins were slightly lower at 55.5% primarily due to product mix. Q2 non-GAAP operating margin was the same as Q1 at 8.2%. This is better than targeted and reflects the improvement in our lighting business and ability to offset the slowdown in LEDs. Company backlog for Q3 is slightly behind this point last quarter. We target flat to higher lighting demand in the quarter to be offset by slightly lower LED demand due to normal seasonality and the Chinese New Year holiday.
We are well-positioned to continue to win in LED lighting. Our product pipeline is strong. We’re building good sales momentum and our brand is growing in the market. While the LED competitive environment remains challenging, we believe that our high power LED technology positions Cree for long term success in high performance LED lighting applications. The power and RF product line also continues to deliver good revenue and profits. Based on our view that we’re well-positioned to continue to grow the company and increase profits over the next several years, we spent $266 million on share repurchases in the quarter. I will now turn the call over to Mike McDevitt to review our second quarter financial results in more detail as well as our targets for the third quarter of fiscal 2015.
Mike McDevitt, Chief Financial Officer
Thank you, Chuck. I will be providing commentary on our financial statements on both a GAAP and non-GAAP basis, which is consistent with how management measures Cree’s results internally. However, non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered as supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. A reconciliation of non-GAAP information to the corresponding GAAP measures for all quarters mentioned on this call is posted on our website along with a historical summary of other key metrics.
For the second quarter of fiscal 2015, revenue was $413 million, which was on the upper- end of our targeted range of $400 million to $420 million. GAAP earnings increased 9% sequentially to $12 million or $0.10 per diluted share for the second quarter of fiscal 2015, and non-GAAP earnings increased 28% sequentially to $38 million or $0.33 per diluted share. Non-GAAP earnings exclude $26 million of expense net of tax or $0.23 per diluted share from the amortization of acquired intangibles, asset retirement charges, fair value accounting on our Lextar investment%
