Good day, and welcome to Cohu's 2026 annual meeting of stockholders. I would like to introduce the first presenter, James A. Donahue, Chairperson of the Board for Cohu.
Thanks. Good afternoon to all attending. I'm Jim Donahue, Chairperson of the Board of Cohu. It's a pleasure to welcome you to our virtual 2026 annual meeting of stockholders. I will act as chair of our annual meeting and will now call the meeting to order. This meeting is being held pursuant to the notice of annual meeting sent to Cohu shareholders on or around April 2nd, 2026. As is our practice, we will conduct the business portion of the meeting first, and then answer pertinent questions at the end of the meeting. You may submit questions through the virtual meeting portal.
Emily Lough, Cohu's Vice President, General Counsel and Secretary, has been appointed Secretary of this meeting and also appointed Inspector of Elections in order to determine the number of shares represented at this meeting and to tabulate the vote on the matters coming before this meeting. At this time, I would like to introduce our other Directors: William Bendush, Steven Bilodeau, Andrew Caggia, Yon Jorden, Andreas Mattes, Karen Rapp, Nina Richardson, and Luis Müller, also President and Chief Executive Officer of Cohu. Also present at the meeting are Ryan Roland from Ernst & Young and Larry Nishnick of the law firm DLA Piper. Ms. Lough informs me that notice of this meeting was duly given in accordance with the bylaws of the company. Ms. Lough, will you please report on the number of shares entitled to vote at this meeting and the number of shares represented at this meeting?
Mr. Donahue, as of March 23, 2026, the record date for this meeting, 47,166,278 shares are entitled to vote, and 42,490,768 shares, or 90.08%, are represented in person or by proxy, thereby constituting a quorum. Separately, I wanna confirm that the list of stockholders of record of the company as of the record date is available for inspection through the virtual meeting portal by any stockholder represented in person or by proxy.
Since a quorum is present, this meeting may proceed to transact business. We have six items on the agenda for the formal portion of this meeting. First, to elect three Class 1 directors for a term of three years each. Second, an advisory vote to approve named executive officer, or NEO, compensation. Third, to approve an amendment to our amended and restated certificate of incorporation to increase the number of authorized shares of common stock from 90 million to 150 million shares. Fourth, to approve the Cohu, Inc. 2026 equity incentive plan. Fifth, to approve the amended and restated Cohu, Inc. 1997 employee stock purchase plan. Finally, to ratify the appointment of Ernst & Young LLP as Cohu's independent registered public accounting firm for fiscal year 2026.
Each of these items is described in more detail in the proxy statement sent to stockholders with a notice of annual meeting. We will now open the polls. At this time, if anyone present holds proxies that they intend to vote, please submit your proxy via the virtual meeting portal. Please let me remind you that if you have already sent in a proxy, there is no need for you to cast a ballot unless you wish to change the vote you put on the proxy. Also, if your shares are held by a broker, bank, or other nominee, in order to vote at the meeting, you must have provided in advance a letter from your broker, bank, or other nominee confirming your beneficial ownership of the shares. The nominees for Class 1 directors listed in our proxy statement are William Bendush, Karen Rapp, and Nina Richardson.
In order to provide stockholders with the opportunity to consider all nominees, Article One, Section Two of our bylaws requires advance notice of stockholder nominations for director. Ms. Lough, did you receive any such notice?
Mr. Donahue, the company did not receive notice of any stockholder nominations for director.
While the inspector of elections completes the tabulation of the votes, Luis Müller will now present a brief business update, including a question and answer session at the end of his remarks.
Thank you, Jim. I'm joined today by Jeff Jones, our Chief Financial Officer, who will be available to answer questions with me after this presentation. We announced our first quarter 2026 financial results on April 30th, and I won't repeat that information here. Our earnings release is available on our website. Cohu is a leading technology company in semiconductor capital equipment. Our fiscal 2025 results show early success expanding sales in high-performance computing and the memory markets. Last year, revenue was $453 million, up 13% year-over-year, and a return to growth. Recurring business remains strong at 60% of consolidated revenue, supported by a large installed base of equipment at customers' factories.
We also finished the year with $454 million in cash and investments. We have a strong position in each of our business verticals, delivering differentiated solutions that optimize semiconductor manufacturing yield and productivity. Our products have growing exposure to AI computing, HBM inspection, power semiconductors, and software-enabled recurring revenue. Our global infrastructure delivers significant value to customers. We manufacture most of our products in Southeast Asia, close to our customers' factories. Equally important, our highly skilled field service team supports approximately 25,000 systems at customer sites worldwide, and they are key to Cohu delivering approximately $270 million in recurring revenue last year. We're targeting an expansion of our addressable market by $1.6 billion across four key growth areas.
We finished 2025 with strong momentum in high-performance computing, driven by the expansion of AI workloads and inference processing that require greater compute power. Our new products are gaining traction in testing high-performance processors and inspecting HBM memory, aligned with customer roadmaps in this $750 million addressable market. Our software initiative is also gaining traction as analytics moves from pilot deployments into broader production environments within a $600 million addressable market. Our tester was recently qualified for testing power devices used in the latest generation of rack-scale servers. Based on current engagements and design activity, we now see a computing segment opportunity pipeline of approximately $750 million. For fiscal 2026, we're increasing our high-performance computing revenue outlook to about $80 million-$100 million.
We're encouraged by this pipeline across 12 customers, five in qualification, another seven in early-stage engagement. In total, we expect fiscal 2026 revenue to grow 20%-25% year-over-year, validating the business strategy. Let's talk about where we're headed and why we're so excited about the future. In fiscal 2025, we delivered revenue of $453 million, up 13% year-over-year. We're already off to a strong start with fiscal 2026 revenue expected to grow 20%-25% year-over-year. Over the midterm, we're targeting 15% compound annual growth rate. We're also driving significant margin expansion with adjusted EBITDA scaling to 18%-26% as we leverage our operating model. In short, we have the products, the pipeline, and the operating leverage to deliver substantial value creation for shareholders over the midterm.
That concludes today's presentation, and I am now happy to take your questions. Thank you. That concludes the business update, and I will turn it back to Jim.
Thank you, Luis. The polls are now closed, and I will ask Ms. Lough to provide us with the preliminary voting results on the proposals.
The pre-preliminary voting results, as tabulated by our transfer agent and certified by me as Inspector of Elections, are as follows. Proposal number one: Mr. Bendush and Mrs. Rapp and Mrs. Richardson have been elected as Class 1 Directors. Proposal number two: the advisory vote on NEO compensation has been approved. Proposal number three: the amendment to our charter has been approved. Proposal number four: the Cohu, Inc. 2026 equity incentive plan has been approved. Proposal number five: the amended and restated Cohu, Inc. 1997 employee stock purchase plan has been approved. Proposal number six: Ernst & Young LLP has been ratified as Cohu's independent registered public accounting firm for 2026. The final vote will be included in the records of the meeting and in a Form 8-K to be filed within four business days.
Thank you, Ms. Lough. That completes the business scheduled for today, and our meeting is now concluded. Thank you all for joining us today, and we look forward to seeing you in 2027.
Cohu's annual meeting has now adjourned. For further information, please visit Cohu's website. Thank you for attending. You may now disconnect.