The potential here on its own is tremendous. But in combination with eSports, MI translator, and CineQC, it could reshape our business and financial models in the future. We’ll keep you appraised as we hit milestones. As I mentioned on our previous call, we have accelerated our strategy to expand outside North America. The opportunities here encompass many products that we believe can smoothly transition to international markets, including our new and development product lines. Additionally, the cinema market in Europe is just starting to recover from the pandemic roughly 2 years after we did. So the timing for us to explore these opportunities couldn’t be better. Initially, we see the opportunity for LEA smart power amplifiers and have already received requests for quotes from cinemas in the U.K. and Germany.
We also see the opportunity for MI translator and CineQC to move to international markets in the years to come. And Sandbox, of course, already has a pipeline established outside North America. Finally, we have an active corporate development program that includes the business development deals we made with Sandbox and LEA acquisitions such as the ADA product line and other ongoing activities. In conclusion, we’re still in the early innings of our growth opportunity for our emerging technologies, while our legacy business continues to improve and grow. With that, I thank you, and I’ll turn it over to Brian.
Brian Siegel: Thanks, Joe, and thank you, everyone, for attending our earnings call. We’re going to spend a little time reviewing our model, and then I’ll take you through the quarter, followed by Q&A. To date, our legacy FF&E projects have been the key driver for our business, making up roughly 60% to 65% of revenue on average. As Joe and Phil mentioned, FF&E projects are more cyclical and can often see start dates pushed out as we saw in fiscal year ‘23. We serve as a project manager, procuring and reselling FF&E and services for refurbishing, upgrading and building new theaters. [ This is ] a large part of these projects involve pass-through costs with a small margin added in, project margins are in the mid-teens. We have several routes to improve these margins, including upselling installation services, scoping our proprietary manufactured products into the project through the resale of higher-margin technology products, including projectors and servers and more recently sound system products through our relationship with LEA Professional.
Next, we sell our higher-margin proprietary manufacturing offering, a la carte, which have margins ranging from 35% to 55% that include our fabrication, caddie and ADA compliance products. Additionally, since we are in the early days of our multiyear technology upgrade cycle, we received discrete orders for servers projectors in LEA power amps, all of which have gross margins above the company average. In the near future, as our emerging products like MI translator, CineQC and E-caddy hit the market and start to scale, we expect our mix to shift even more significantly away from FF&E as these products will likely have 50-plus percent gross margins. Now moving to our second quarter results. We reported revenue of $3.3 million, down 33% versus last year.
On our last call, we said that we expected revenue to be down materially in the quarter as last year saw a benefit from the tail end of SVOG spending, we actually came in ahead of our internal forecast. Of note, projects represented about 1/3 of the quarter’s revenue mix. Gross profit decreased 42% to $0.8 million. Gross margin was down 390 basis points to 23.2% in the quarter, resulting from an unfavorable product mix as we sold a number of large projectors, which have lower margins and that negatively impacted the quarter. GAAP operating expenses were $1.6 million, up 10% versus last year, mainly due to higher compensation expense. GAAP operating loss was $0.8 million versus a loss of $0.1 million last year, demonstrating the downside of our high operating level.
Both GAAP and non-GAAP net loss was $0.8 million or $0.07 per share versus GAAP and non-GAAP net income of nil last year. Moving to the balance sheet. Our cash and cash equivalents were $5.1 million at the end of the second quarter, down $1.3 million from the first quarter, reflecting a decrease in payables and increase in prepaids related to a systems upgrade and increased receivables. Finally, even with lower liquidity, we bought back 109,000 shares during the quarter. Now I’ll provide an update on our fiscal year ‘24 outlook. The writers and actors strikes have impacted our customers by driving uncertainty into their 2024 budgeting process. For example, many of our customers have only recently finished this process while others are still working through the process.
As a result, we have less visibility than normal into the second half of the year beyond the projects we have received deposits on and existing orders. With that said, we do expect the top line for our third quarter to return to year-over-year growth. However, gross margins will likely be down from last year due to a large order for seats, which have very low pass-through gross margins for no incremental operating expense impact. Next, I will provide upside opportunities that were excluded from our forecast. I will now update these items. There is an ADA product refresh in a top 5 cinema circuit that should begin in the second half of fiscal 2024. While we are very well positioned to get this multimillion dollar order, the timing of the rollout is uncertain as this customer is still in their budgeting process for 2024.
For eSports, as Joe mentioned, we feel very optimistic about this opportunity, but are currently unsure of the timing of Sandbox raising funds. Again, anything over 8 systems sold in fiscal year ‘24 would be growth from last year. The pipeline and interest here remains very strong. And as Joe mentioned, we are looking into ways to jump-start sales here regardless of Sandbox raising funds. Next, as I discussed in our recent investor presentations, our incremental market opportunity for selling LEA smart power amplifiers is very significant. We do have this product scope into some upcoming projects for new builds, and we remain positive on the ability of this product line to ramp over the next few quarters. At this point, I would be remiss to set expectations for any incremental sales of CineQC or sales of MI translate during fiscal 2024.
