Revenues increased by 5% sequentially over the $26.6 million reported in the second quarter of 2001.
Pro forma net income for the third quarter of 2001, which excludes acquisition related charges and stock based compensation expense, decreased 14% to $5.3 million, or $0.08 per diluted share, compared to pro forma net income of $6.1 million, or $0.11 per diluted share in the same period a year ago. The net loss for the third quarter of 2001, which includes acquisition related charges and stock based compensation expense, was $5.2 million, or $(0.08) per share, compared to net income of $5.7 million during the same period of the prior year.
I am very encouraged by our third quarter financial performance and the progress we have made with our strategic initiatives, despite very difficult economic conditions which were made worse by the tragic events of September 11th, said Sreekanth Ravi, Chairman of SonicWALL. We achieved growth in our revenues and profitability, and we made further penetration into the large enterprise with our SSL and GX products. We were particularly encouraged by the growth in our license and service revenues, which represented 23% of our total revenues for the quarter, and which helped to boost our gross margins to 77% for the quarter.
Mr. Ravi added I am also very excited by the addition of Cosmo Santullo to our management team as our new President and Chief Executive Officer. Cos will further strengthen our proven executive team, and will provide us with significant expertise on several strategic fronts, including our expansion into the large enterprise market.
