Bernie Blegen
VP and CFO at Monolithic Power Systems
Thanks, Jen. First of all, today, I'm greeting you from Europe. We held our third quarter Board of Directors meeting in our Barcelona office. We have our Board members tour of the facility and oversee the operations here. Now to the financial results. MPS achieved record third quarter revenue of $495.4 million, 7.5% higher than revenue in the second quarter of 2022 and 53.1% higher than revenue in the third quarter of 2021. This broad-based year-over-year revenue growth was the result of consistent execution against our strategies.
Looking at our third quarter 2022 revenue by market. Third quarter automotive revenue of $87.1 million increased 42.7% from the second quarter of 2022, due primarily to new platform launches. Third quarter 2022 automotive revenue was up 60.0% year-over-year. Automotive revenue represented 17.6% of MPS' third quarter 2022 revenue compared with 16.8% in the third quarter of 2021. Third quarter 2022 communications revenue of $72.3 million was up 21.9% from the second quarter of 2022.
Most of this sequential revenue increase was related to the continued communications infrastructure ramp. Third quarter 2022 communications revenue was up 61.8% year-over-year. Communications sales represented 14.6% of our total third quarter 2022 revenue compared with 13.8% in the third quarter of 2021. In our enterprise data market, third quarter 2022 revenue of $75.3 million increased 15.5% from the second quarter of 2022, primarily due to continued strength in our data center and workstation computing sales.
Third quarter 2022 revenue represented 15.2% of MPS' third quarter 2022 revenue compared with 9.2% in the third quarter of 2021. Third quarter 2022 industrial revenue of $58.7 million increased 5.1% from the second quarter of 2022. Third quarter 2022 industrial revenue was up 12.5% year-over-year. Industrial revenue represented 11.8% of our third quarter 2022 revenue compared with 16.1% in the third quarter of 2021. Storage and computing revenue of $112.9 million decreased 7.7% from the second quarter of 2022. The sequential revenue decline was primarily due to softening of customer demand for notebooks.
Third quarter 2022 storage and computing revenue was up 63.9% year-over-year. Storage and computing revenue represented 22.8% of MPS' third quarter 2022 revenue compared with 21.3% in the third quarter of 2021. Third quarter consumer revenue of $89.2 million decreased 8.4% from the second quarter of 2022. The sequential quarterly revenue decline was primarily due to softening of overall demand. Third quarter 2022 consumer revenue was up 21.1% year-over-year.
Consumer revenue represented 18.0% of MPS' third quarter 2022 revenue compared with 22.8% in the third quarter of 2021. Let's talk about the general business conditions. For the prior six quarters, we have faced product shortages, especially in consumer, storage, and computing. Now we have started to see our customers reduce their orders and push out shipments. We've experienced similar patterns in the past. We anticipate order patterns might oscillate in the near future. This is not a surprise to us.
As a result of this change in ordering patterns, our inventory levels will catch up to our target of 180 to 200 days and possibly be higher in the near term. In addition, we have over 4,000 different products which are required to support thousands of our customers' applications. On average, our product life cycles exceeds six to eight years. so we are not concerned with carrying an inventory level above target. MPS' business is in a better position today rather than managing product shortage problems, we can now focus on long-term business development.
For longer cycle business like automotive, enterprise data, comms infrastructure, and industrial both our customers and MPS have expended significant effort and made joint investments in the development of multiple leading-edge products and applications. As a result, we have secured business which we believe will ramp over the next several years driving revenue growth. For shorter cycle, consumer-related business, will continue to proactively support our customers' needs. We've established MPS as a reliable supplier with excellent customer support during this extended period of product shortages.
Accordingly, we believe both longer and shorter cycle customers value MPS as a strategic partner. We are cautious about the overall business conditions and believe we can swiftly adapt to market changes as we have done successfully during similar macroeconomic changes in the past. There have been recent changes to export controllables and additional companies have been added to the entities list. As of today, we see immaterial revenue impact directly or indirectly from those new trade restrictions. Our products utilize process nodes in excess of 40 nanometer, which falls well outside the current restrictions.
Moving now to a few comments on gross margin and operating income. Third quarter 2022 GAAP gross margin was 58.7%, which was 10 basis points lower than the second quarter of 2022 and 110 basis points higher than the third quarter of 2021. Our GAAP operating income was $151.9 million compared to $141.9 million reported in the second quarter of 2022. Non-GAAP gross margin for the third quarter of 2022 was 59.0%, essentially flat from the gross margin percentage reported in the second quarter of 2022 and 120 basis points higher than the third quarter from a year ago.
Our non-GAAP operating income was $193.7 million, compared to $179.4 million reported in the second quarter of 2022. Let's review our operating expenses. Our GAAP operating expenses were $139.0 million in the third quarter of 2022 compared with $129.1 million in the second quarter of 2022 and $109.2 million in the third quarter of 2021. Our non-GAAP third quarter 2022 operating expenses were $98.4 million, up from $92.7 million in the second quarter of 2022 and up from the $78.7 million reported in the third quarter of 2021.
The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock compensation expense and income or expense from an unfunded deferred compensation plan. For the third quarter of 2022, total stock compensation expense, including approximately $1.2 million charge to cost of goods sold was $43.0 million compared with $42.9 million recorded in the second quarter of 2022.
Switching to the bottom line. Third quarter 2022 GAAP net income was $124.3 million or $2.57 per fully diluted share compared with $114.7 million or $2.37 per share in the second quarter of 2022 and $68.8 million or $1.44 per share in the third quarter of 2021. Q3 2022 non-GAAP net income was $170.7 million or $3.53 per fully diluted share compared with $157 million or $3.25 per share in the second quarter of 2022 and $98.6 million or $2.06 per share in the third quarter of 2021. Fully diluted shares outstanding at the end of Q3 2022 were $48.3 million.
Now let's look at the balance sheet. Cash, cash equivalents, and investments were $738.1 million at the end of the third quarter of 2022 compared to $814.1 million at the end of the second quarter of 2022. For the quarter, MPS generated operating cash flow of about $18.2 million compared with Q2 2022 operating cash flow of $105.2 million. The decline in operating cash flow and increase in other long-term assets reflected a $170 million prepaid payment made during the quarter to secure a long-term purchasing commitment. Accounts receivable ended the third quarter of 2022 at $153.4 million, representing 28 days of sales outstanding which was three days higher than the 25 days reported at the end of the second quarter of 2022 and six days higher than the 22 days at the end of the third quarter of 2021.
Our internal inventories at the end of the third quarter of 2022 were $397.4 million, up $37.8 million from the $359.6 million reported at the end of the second quarter of 2022. Inventory at the end of the third quarter of 2022 represented 167 days, which were five days lower than at the end of the second quarter of 2022. Historically, we have calculated days of inventory on hand as a function of the current quarter revenue. We believe comparing current inventory levels with the following quarter's revenue provides a better economic match. On this basis, you can see inventory at the end of the third quarter of 2022 represented 189 days, 29 days higher than 160 days at the end of the second quarter of 2022 and 56 days higher than the 133 days at the end of the third quarter of 2021.
I would now like to turn to our outlook for the fourth quarter of 2022. We are forecasting Q4 revenue in the range of $450 million to $470 million. We also expect the following. GAAP gross margin to be in the range of 58.1% to 58.7%, non-GAAP gross margin in the range of 58.3% to 58.9%, total stock-based compensation expense of $37.7 million to $39.7 million, including approximately $1.1 million that would be charged to cost of goods sold. GAAP R&D and SG&A expenses should be between $131 million and $135 million. Non-GAAP R&D and SG&A expenses are expected to be in the range of $94.4 million to $96.4 million.
Litigation expense is expected to be in the range of $1.3 million to $1.7 million. Interest income is expected to be in the range from $1.1 million to $1.5 million. Fully diluted shares are expected to be in the range of $48.2 million to $49.2 million shares. In conclusion, even though business conditions are softening, our market share gains continue to expand, reflecting high customer engagement and our ability to secure design wins. We can now focus on growing our long-term business. I will now open the webinar up for questions.