Our team achieved another quarter of strong revenue growth across the portfolio driven by superb performance in the mask category particularly in the U.S. market with good performance across the 140 countries where we provide our solutions.
We have sold nearly 11 million 100% cloud connectable medical devices into the market and Air Solutions, our cloud-based ecosystem manages more than 12 million patients.
In the last 12 months, we have changed over 15 million lives by providing a person with a ResMed device or complete ResMed mask system to help them breathe better and live better lives.
In addition, our Brightree and MatrixCare software systems are helping to manage 19 [Phonetic] million more people outside the hospital.
We now have over 5.5 billion nights of respiratory medical data in the cloud and we are analyzing these data to derive actionable insights for the benefit of patients, physicians, providers and healthcare systems.
We were up 14% in constant currency across our portfolio.
We continue to deliver operating leverage with non-GAAP operating profit growth of 21% year-over-year and non-GAAP diluted earnings per share of $1.21.
In the devices category, we delivered a good quarter with year-over-year constant currency device growth of 8% globally supported by strong 9% device growth in the United States, Canada and Latin America geographies, as well as by improving, Europe, Asia and rest of world growth, which was at 6% constant currency in the device category.
Underlying patient growth remains healthy around the globe and we continue to benefit from strong market dynamics with over 900 million people worldwide suffering from undiagnosed and untreated sleep apnea.
We were up 16% constant currency globally in this category, well ahead of market growth rates, indicating that we gained significant market share with our latest patient interface innovations.
We have launched a steady rhythm of mask innovation over the past 15 months.
We have just lapsed the successful launch of the F30 in the December quarter and we will lap the launch of the N30 the N30i and the P30i during the coming 12 months.
We have well over 2 million patients using myAir and leveraging its insights and personalized feedback through coaching algorithms.
Our digital end-to-end solutions combined with available 100% cloud connectivity as well as information provided to patients on their own smartphones are all leading to significant improvements in cost, improvements in healthcare outcomes, and improvements in quality of life.
There are nearly 400 million people suffering from chronic obstructive pulmonary disease or COPD worldwide.
We will be there with stage 1 and stage 2 COPD patients as they commence inhaled pharmaceutical therapy managed by the Propeller platform.
We will be there with stage 2 and stage 3 COPD patients as they add portable oxygen therapy to their care.
We will also be there with stage 3 and stage 4 COPD patients as they commence non-invasive ventilation therapy and ultimately life support ventilation therapy.
Our SaaS portfolio revenue grew 37% year-on-year this last quarter, benefiting from the MatrixCare acquisition that we lapped during November.
It took around 24 months to see strong sustainable returns from our investments in R&D and our management team at Brightree.
Just this week, Brightree signed an agreement to acquire a company called SnapWorx.
Group revenue for the December quarter was $736 million, an increase of 13% over the prior year quarter.
In constant currency terms, revenue increased by 14%.
Excluding revenue from acquisitions, group revenue increased by 11% on a constant currency basis.
Taking a closer look at our geographic distribution and excluding revenue from our software as a service business, our sales in U.S., Canada and Latin America countries were $408 million, an increase of 14% over the prior year quarter.
Sales in Europe, Asia and other markets totaled $242 million, an increase of 5% over the prior year quarter.
However, in constant currency terms, sales in combined Europe, Asia and other markets increased by 8% over the prior year quarter.
Breaking out revenue between product segments, U.S., Canada and Latin America, device sales were $204 million, an increase of 9% over the prior year quarter.
Masks and other sales were $204 million, an increase of 19% over the prior year quarter.
Revenue in Europe, Asia and other markets device sales were $162 million, an increase of 4% over the prior year quarter or in constant currency terms, an increase of 6%.
Masks and other sales in Europe, Asia and other markets were $79 million, an increase of 8% over the prior year quarter or in constant currency terms, an increase of 11%.
Globally, in constant currency terms, device sales increased by 8% while masks and other sales increased by 16% over the prior year quarter.
Software as a service revenue for the second quarter was $87 million, an increase of 37% over the prior year quarter.
Our non-GAAP gross margin improved to 59.7% in the December quarter compared to 59.1% in the same quarter of last year.
Compared to the prior year, our non-GAAP gross margin increased by 60 basis points.
Moving on to operating expenses, our SG&A expenses for the second quarter were $171 million, an increase of 6% over the prior year quarter.
SG&A expenses increased by 8%.
Excluding acquisitions, SG&A expenses increased by 2% on a constant currency basis.
SG&A expenses as a percentage of revenue improved to 23.3% compared to 24.8% that we reported in the prior year quarter.
Looking forward, subject to currency movements and taking into account recent acquisitions, we expect SG&A as a percentage of revenue to be in the range of 23% to 25% for the remaining two quarters of fiscal year 2020.
R&D expenses for the quarter were $50 million, an increase of 16% over the prior year quarter or on a constant currency basis, an increase of 18%.
Excluding acquisitions, R&D expenses increased by 4% on a constant currency basis.
R&D expenses as a percentage of revenue was 6.8% compared to 6.6% in the prior year.
Looking forward, subject to currency movements, we expect R&D expenses as a percentage of revenue to be in the range of 7% to 8% for the balance of fiscal year 2020.
Total amortization of acquired intangibles was $20.6 million for the quarter, an increase of 30% over the prior year quarter reflecting the impact from our recent acquisitions.
Stock-based compensation expense for the quarter was $14.1 million.
Our non-GAAP operating profit for the quarter was $218.5 million, an increase of 21% over the prior year quarter while non-GAAP net income for the quarter was $176.3 million, an increase of 22% over the prior year quarter.
On a GAAP basis, our effective tax rate for the December quarter was 10.2% while on a non-GAAP basis, our effective tax rate for the quarter was 11.6%.
Our tax rate was favorably impacted by a tax benefit of $20.3 million associated with the vesting of employee share-based compensation, in particular, the tax deduction associated with the vesting of executive performance stock units in November.
Excluding the impact from this benefit, our GAAP effective tax rate would have been 21.6% and our non-GAAP effective tax rate would have been 21.8% [Phonetic].
Looking forward, we estimate our effective tax rate for the second half of fiscal year 2020 will be in the range of 19% to 21%.
Non-GAAP diluted earnings per share for the quarter were $1.21, an increase of 21% over the prior year quarter while GAAP diluted earnings per share for the quarter were $1.10.
Excluding the impact of this gain, our non-GAAP earnings per share would have been $1.07.
Cash flow from operations for the second quarter was $69.9 million reflecting robust underlying earnings, partially offset by the timing of tax payments with $111 million in tax paid in our second quarter.
Additionally, we made the payment for our settlement to the U.S. Department of Justice of $40.6 million this quarter.
Capital expenditure for the quarter was $25.1 million.
Depreciation and amortization for the December quarter totaled $45.5 million.
During the quarter, we paid dividends of $56.1 million.
We recorded equity losses of $6.9 million in our income statement in the December quarter associated with the Verily joint venture.
We expect to record approximately $6 million of equity losses each quarter for the balance of fiscal year 2020 associated with the joint venture operations.
Our Board of Directors today declared a quarterly dividend of $0.39 per share.
At December 31, we have $1.3 billion in gross debt and $1.1 billion in net debt.
Our total assets were $4.4 billion and our balance sheet remains strong with modest debt levels.
As a result, we are continuing to drive operating leverage with Q2 non-GAAP operating profit up 21% year-on-year.

Summary:
We continue to deliver operating leverage with non-GAAP operating profit growth of 21% year-over-year and non-GAAP diluted earnings per share of $1.21.
Just this week, Brightree signed an agreement to acquire a company called SnapWorx.
Non-GAAP diluted earnings per share for the quarter were $1.21, an increase of 21% over the prior year quarter while GAAP diluted earnings per share for the quarter were $1.10.