KLA dividend: history, coverage and yield
KLA's dividend rose from $0.42 in FY2022 to $0.80 in FY2026. FY2026 free cash flow was $3.767 billion, and KLA paid out 96.8% of real free cash flow, covering the dividend within a broader shareholder-return program that included buybacks.
How much does KLA pay in dividends?
Dividends rise from $1.04 per share to $1.56 in the base case. The bear freezes the current annualized rate of $0.92, while the bull reaches $2.00. The base follows a history of annual increases from $0.42 in FY2022 to $0.80 in FY2026 and leaves room for buybacks under the target of returning more than 90% of free cash flow. FY2026 free cash flow was $3.767 billion.
| Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | |
|---|---|---|---|---|---|
| − Dividends paid, per share | 0.80 | 0.68 | 0.57 | 0.52 | 0.42 |
| − Share buybacks, per share | 1.74 | 1.61 | 1.27 | 0.94 | 3.21 |
| = FCF not paid out, per share | 0.32 | 0.51 | 0.38 | 0.92 |
Is KLA's dividend covered by its cash?
The share count fell from 1,337,502 thousand in FY2025 to 1,319,633 thousand in FY2026, but fewer shares alone do not prove that every repurchase created value. Employee equity also offset part of the reduction, and the 96.8% “real free cash flow” payout ratio cannot be fully assessed without its reconciliation. The fairest conclusion is therefore mixed: KLA funded continuing development, reduced debt after an aggressive 2022, and returned substantial cash, but the value of the full buyback program remains unproven.
| Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | |
|---|---|---|---|---|---|
| Free cash flow | 3,767,134 | 3,741,694 | 3,031,191 | 3,328,214 | 3,005,382 |
| − Dividends paid | 1,057,832 | 904,594 | 773,041 | 732,556 | 638,528 |
| − Share buybacks | 2,289,769 | 2,149,946 | 1,735,746 | 1,311,864 | 4,867,806 |
| = Free cash flow not paid out | 419,533 | 687,154 | 522,404 | 1,283,794 | |
| Paid out, % of free cash flow | 88.9% | 81.6% | 82.8% | 61.4% | 183.2% |
| Paid out, % of real free cash flow | 96.8% | 87.9% | 89.0% | 64.8% | 191.3% |
What could change KLA's dividend?
The bear case assumes export controls and a synchronized fab pause leave China orders unreplaced, while packaging qualifications take longer. Receivables and inventory weaken cash conversion, buybacks slow and the multiple contracts. It produces $104.02 in October 2027 and $105.17 in October 2029, with a 30% probability. China was 29.8% of FY2026 sales by destination, and receivables grew about 28% against 11.7% revenue growth.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 6,176 (5,184 / 6,800) | 7,180 (5,580 / 7,920) | 8,106 (6,192 / 9,200) |
| Dividends per share | 1.04 (0.92 / 1.12) | 1.28 (0.92 / 1.52) | 1.56 (0.92 / 2.00) |
| Net debt | -340 (-1,096 / 200) | -2,291 (-3,748 / -1,213) | -4,747 (-7,074 / -3,299) |
What is KLA's dividend yield today?
The low free-cash-flow yield means the buyer receives little current cash relative to the purchase price. The dividend yield is smaller still, and dividends are only one use of the cash KLA generates. The price therefore depends heavily on what comes next.