* Prepared Remarks
* Questions and Answers
* Call Participants
Prepared Remarks:
Operator
Good afternoon. Welcome to the Data I/O Corporation Third Quarter 2022 Earnings Conference Call.
Joining us today are Data I/O's President and CEO, Anthony Ambrose, and Senior Vice President and CFO, Richard Sferra.
Following their prepared remarks, we will open the call for questions. I would like to remind everyone that this call is being recorded and will be available for replay on our website later today.
I would also like to call your attention to the fact that today's discussion contains forward-looking statements. These statements are based on the company's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
The company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of today's call. Additional information concerning these risks can be found in the company's filings with the Securities and Exchange Commission.
With that, I would like to turn the call over to Anthony Ambrose. Please go ahead, sir.
Anthony Ambrose -- President and Chief Executive Officer
Thank you, Kevin, and good afternoon, everyone. Welcome to Data I/O's third quarter 2022 earnings conference call.
As our press release issued earlier today indicates, we experienced a sequential decline in revenue during the third quarter. The primary driver of this decline was a significant slowdown in automotive production, particularly in China, and to a lesser extent in Europe, which impacted our EMS customers.
Despite these headwinds, I am pleased to report that we achieved record quarterly bookings during the third quarter, driven by strength in semiconductor and industrial markets, as well as continued momentum in our core automotive segment.
Total revenue for the third quarter was $33.2 million, a decrease of 11.7% compared to the prior quarter, but an increase of 12% compared to the third quarter of 2021. Product revenue was $30.2 million, a decrease of 12.1% compared to the prior quarter, but an increase of 13.1% compared to the third quarter of 2021.
Service revenue was $3 million, a decrease of 8.2% compared to the prior quarter, but an increase of 4.5% compared to the third quarter of 2021.
As I mentioned, the automotive market, which typically represents around 50% of our revenue, experienced a significant slowdown during the quarter, primarily due to COVID-related lockdowns in China, which impacted production schedules and customer demand for our products.
Despite this slowdown, we are encouraged by the strength of our core automotive business, and we believe that the long-term growth trajectory remains intact. We continue to see strong demand for our high-pin-count programming solutions, particularly in the electric vehicle market, which is expected to continue to grow rapidly in the coming years.
In the semiconductor market, we saw continued strength in demand for our memory programming solutions, particularly in the automotive and industrial segments. We are also seeing increased demand for our semiconductor test solutions, as customers seek to improve the quality and reliability of their devices.
The industrial market also remained strong during the quarter, driven by continued investment in automation and digital transformation. We are seeing increased demand for our programming and test solutions in a variety of industrial applications, including factory automation, robotics, and medical devices.
Now, let me turn the call over to Richard to discuss our financial results in more detail. Richard?
Richard Sferra -- Senior Vice President and Chief Financial Officer
Thank you, Anthony, and good afternoon, everyone.
As Anthony mentioned, we achieved record quarterly bookings during the third quarter, driven by strength in semiconductor and industrial markets, as well as continued momentum in our core automotive segment. Total bookings for the third quarter were $39.3 million, an increase of 23.3% compared to the prior quarter, and an increase of 47.2% compared to the third quarter of 2021.
Our backlog at the end of the third quarter was $55.1 million, a decrease of 1.8% compared to the prior quarter, but an increase of 50.9% compared to the third quarter of 2021.
Gross margin for the third quarter was 60.8%, a decrease of 200 basis points compared to the prior quarter, but an increase of 20 basis points compared to the third quarter of 2021. The decrease in gross margin compared to the prior quarter was primarily due to a higher mix of lower-margin service revenue.
Total operating expenses for the third quarter were $14.1 million, an increase of 5.8% compared to the prior quarter, but a decrease of 1.7% compared to the third quarter of 2021.
The increase in operating expenses compared to the prior quarter was primarily due to higher research and development expenses, as we continue to invest in new product development.
Net income for the third quarter was $6.4 million, or $0.26 per diluted share, compared to net income of $7.2 million, or $0.29 per diluted share, in the prior quarter.
Adjusted net income for the third quarter was $7.4 million, or $0.30 per diluted share, compared to adjusted net income of $8.1 million, or $0.33 per diluted share, in the prior quarter.
Adjusted EBITDA for the third quarter was $10.2 million, a decrease of 6.
