# GP demand continued to steadily increase, driven by a healthy marketing environment and new applications that require GPUs. Our unprecedented investments in parallel computing are creating change and opportunity, and are the foundation of our growth in the coming year.
# We believe we are in the midst of a giant leap in computer graphics. The GPU continues to advance the most parallel of applications, 3-D graphics. And it is now poised to revolutionize a wide range of industries by making parallel computing mainstream.
# Movie production houses that worked on Terminator Salvation and Star Trek ran color grading and image processing 20 times faster using parallel computing on NVIDIA GPUs.
# We held our first GPU technology conference last month, and even after closing registration early, we were oversubscribed by 50%. 1,500 people from over 40 countries listened, learned, and shared during 200 hours of sessions. At one point, more than 35,000 people were watching online.
# (CFO) Revenue was $903.2 million, above our guidance and up 16% sequentially, making the third consecutive quarter of top line strong growth.
# Gross margin was 43.4%, 41% on a non-GAAP basis, significantly higher than guidance.
# GAAP operating expense was just under $284 million, marginally above guidance. And GAAP net income was $107.6 million or $0.19 per diluted share. Non-GAAP income was also $0.19 per diluted share.
# Our core GPU business was particularly strong, up almost 25% sequentially. Within that, our desktop and notebook GPU segments were up 19% and over 41% respectively quarter-over-quarter. While demand was strong, we were supply-constrained throughout the quarter, particularly in our 40-nanometer products. 40-nanometer products for desktop and notebook constituted 19% of our total GPU revenue in the quarter.
# Our professional business saw another quarter of growth, up 11% sequentially. While revenues in this business are still well below their levels of a year ago, quotation activity continues to gain momentum and is encouraging.
# Gross margin improved sequentially as a result of several factors: significantly higher than anticipated unit sales of GPUs; improved 55-nanometer yields, as well as other cost reductions; and more favorable product mix across businesses, and particularly better mix within the GPU business itself.
# Inventories at the end of the quarter were essentially flat compared with the prior quarter.
# Inventory days on hand improved to 47, calculated on a non-GAAP basis, a four-day improvement over Q2. Inventory in the channel remains very low at around a month.
# With demand outstripping supply, we don't see OEMs at the channel building inventory.
# Our outlook for Q4 of fiscal 2010 is as follows. Revenue is expected to be up slightly, approximately 2% from the third quarter. While revenue from 40-nanometer products is expected to grow significantly quarter-over-quarter, we expect 40-nanometer products to be supply-constrained throughout the quarter.
# GAAP gross margin is expected to be 40 to 42%, essentially flat with Q3, excluding the insurance reimbursement. GAAP operating expenses are expected to be in the range of 305 million. This is up from the third quarter, due primarily to our fourth quarter comprising 14 weeks versus the usual 13
weeks, as well as costs relating to a record number of product bring-ups.

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