BEKE(BEKE) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights Q2 2025 Key Financial & Operational Highlights In Q2 2025, the company's GTV and net revenues grew year-over-year, but net income and adjusted net income declined significantly, while its store and agent network continued to expand and active users slightly decreased Q2 2025 Key Financial Metrics | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | GTV | RMB 87.87 billion (US$12.27 billion) | +4.7% | | Existing Home Transaction GTV | RMB 58.35 billion (US$8.15 billion) | +2.2% | | New Home Transaction GTV | RMB 25.54 billion (US$3.56 billion) | +8.5% | | Net Revenues | RMB 26.00 billion (US$3.60 billion) | +11.3% | | Net Income | RMB 1.307 billion (US$182 million) | -31.2% | | Adjusted Net Income | RMB 1.821 billion (US$254 million) | -32.4% | Q2 2025 Key Operational Metrics | Metric | June 30, 2025 | YoY Change | | :--- | :--- | :--- | | Number of Stores | 60,546 | +31.8% | | Number of Active Stores | 58,664 | +32.1% | | Number of Agents | 557,974 | +21.6% | | Number of Active Agents | 491,573 | +19.5% | | Mobile Monthly Active Users (MAU) | 48.7 million | -2.0% (vs. 49.7 million in Q2 2024) | Management Commentary & Strategic Focus Management noted high-quality business development despite shifts in China's property market, transitioning to an efficiency-driven phase enhanced by AI, while diversifying growth and focusing on shareholder returns - The company maintained high-quality business development while recognizing significant shifts in consumer demand within China's real estate industry[10] - Following substantial expansion of its agent and store network, the platform is entering a new efficiency-driven development phase, with AI breakthroughs presenting significant opportunities for productivity enhancement[10] - In housing transaction services, the company is leveraging scientific management and AI to enhance service capabilities and explore new growth models driven by efficiency rather than scale[10] - Net revenues from non-housing transaction services reached a record 41% of total net revenues, highlighting diversified growth drivers[12] - The company has repurchased approximately US$394 million of its shares and approved an upsize of its existing share repurchase program from US$3.0 billion to US$5.0 billion, extending it to August 31, 2028[12] Detailed Financial Performance Net Revenues Analysis Q2 2025 net revenues increased by 11.3% YoY to RMB 26.0 billion, driven by growth in new home, home renovation, and home rental services, despite a decline in existing home transaction services Q2 2025 Net Revenues Composition | Service Type | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Existing Home Transaction Services | 6.72 billion (US$0.94 billion) | -8.4% | | New Home Transaction Services | 8.62 billion (US$1.20 billion) | +8.6% | | Home Renovation and Furnishing | 4.57 billion (US$0.64 billion) | +13.0% | | Home Rental Services | 5.68 billion (US$0.79 billion) | +78.0% | | Emerging and Other Services | 0.43 billion (US$0.06 billion) | -50.6% (vs. 0.87 billion in Q2 2024) | | Total Net Revenues | 26.01 billion (US$3.63 billion) | +11.3% | Existing Home Transaction Services Net revenues from existing home transaction services decreased by 8.4% YoY to RMB 6.72 billion, despite a 2.2% GTV increase, due to a higher contribution from transactions facilitated by connected agents Existing Home Transaction Services Key Data | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Net Revenues | 6.72 billion (US$0.94 billion) | -8.4% | | GTV | 58.35 billion (US$8.15 billion) | +2.2% | | Commission Revenue (Lianjia brand) | 5.40 billion (US$0.70 billion) | -10.4% | | GTV from Lianjia Stores | 21.31 billion (US$2.97 billion) | -8.6% | | Platform, franchise, and other value-added services revenue (Connected agents) | 1.40 billion (US$0.20 billion) | Flat | | GTV from Connected Agents | 37.04 billion (US$5.17 billion) | +9.7% | New Home Transaction Services Net revenues from new home transaction services grew 8.6% YoY to RMB 8.62 billion, in line with an 8.5% GTV increase, driven by the company's enhanced coverage capabilities New Home Transaction Services Key Data | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Net Revenues | 8.62 billion (US$1.20 billion) | +8.6% | | GTV | 25.54 billion (US$3.56 billion) | +8.5% | | GTV from Beike platform's connected agents and other channels | 20.82 billion (US$2.91 billion) | +8.2% | | GTV from Lianjia Brand | 4.71 billion (US$0.66 billion) | +10.1% | Home Renovation and Furnishing Net revenues from home renovation and furnishing services increased by 13.0% YoY to RMB 4.57 billion, driven by increased sales of furniture and home appliances and more orders referred by agents Home Renovation and Furnishing Net Revenues | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Net Revenues | 4.57 billion (US$0.64 billion) | +13.0% | - The growth was primarily attributable to increased contributions from sales of furniture, soft furnishings, and home appliances, as well as growth in renovation orders referred by agents from housing transaction services[15] Home Rental Services Net revenues from home rental services surged by 78.0% YoY to RMB 5.68 billion, primarily due to an increase in the number of rental units under the "Carefree Rent" model Home Rental Services Net Revenues | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Net Revenues | 5.68 billion (US$0.79 billion) | +78.0% | - The growth was mainly attributable to the increase in the number of rental units under the "Carefree Rent" model[15] Emerging and Other Services Net revenues from emerging and other services significantly decreased to RMB 0.43 billion in Q2 2025 from RMB 0.87 billion in the prior-year period Emerging and Other Services Net Revenues | Metric | Q2 2025 (RMB) | Q2 2024 (RMB) | | :--- | :--- | :--- | | Net Revenues | 0.43 billion (US$0.06 billion) | 0.87 billion | Cost of Revenues Analysis Total cost of revenues in Q2 2025 rose 20.5% YoY to RMB 20.31 billion, outpacing revenue growth, mainly driven by increased commission splits, internal commissions, and home rental service costs Q2 2025 Cost of Revenues Composition | Cost Type | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Commission - split | 5.93 billion (US$0.83 billion) | +9.1% | | Commission and compensation - internal | 4.73 billion (US$0.66 billion) | +6.4% | | Cost of home renovation and furnishing | 3.10 billion (US$0.43 billion) | +11.6% | | Cost of home rental services | 5.20 billion (US$0.73 billion) | +73.3% | | Store-related costs | 0.76 billion (US$0.11 billion) | +11.9% | | Other costs | 0.59 billion (US$0.08 billion) | +15.7% (vs. 0.51 billion in Q2 2024) | | Total Cost of Revenues | 20.31 billion (US$2.84 billion) | +20.5% | Gross Profit Q2 2025 gross profit fell 12.5% YoY to RMB 5.70 billion, with gross margin contracting to 21.9% from 27.9%, primarily due to a revenue mix shift and lower contribution margin from existing home services Q2 2025 Gross Profit and Gross Margin | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Gross Profit | 5.70 billion (US$0.80 billion) | -12.5% | | Gross Margin | 21.9% | -6.0 ppts (vs. 27.9% in Q2 2024) | - The decrease in gross margin was mainly due to a lower revenue contribution from existing home transaction services, which have a relatively higher contribution margin, and a decrease in the contribution margin of existing home transaction services due to a higher proportion of fixed compensation costs[19] Operating Expenses Total operating expenses in Q2 2025 were RMB 4.64 billion, remaining relatively flat year-over-year, with a notable increase in R&D expenses offset by stable G&A and S&M costs Q2 2025 Operating Expenses Composition | Expense Type | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Total Operating Expenses | 4.64 billion (US$0.65 billion) | +3.1% (vs. 4.50 billion in Q2 2024) | | General and administrative expenses | 2.08 billion (US$0.29 billion) | Flat | | Sales and marketing expenses | 1.90 billion (US$0.27 billion) | Flat | | Research and development expenses | 0.63 billion (US$0.09 billion) | +25.6% | - The increase in R&D expenses was primarily due to an increased headcount of R&D personnel and higher technical service fees[23] Income from Operations Q2 2025 income from operations dropped sharply by 47.5% YoY to RMB 1.06 billion, with the operating margin decreasing to 4.1% from 8.6%, mainly due to the decline in gross margin Q2 2025 Income from Operations and Margin | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Income from Operations | 1.06 billion (US$0.15 billion) | -47.5% | | Operating Margin | 4.1% | -4.5 ppts (vs. 8.6% in Q2 2024) | | Adjusted income from operations | 1.61 billion (US$0.22 billion) | -42.9% (vs. 2.81 billion in Q2 2024) | | Adjusted operating margin | 6.2% | -5.8 ppts (vs. 12.0% in Q2 2024) | | Adjusted EBITDA | 2.20 billion (US$0.31 billion) | -34.7% (vs. 3.37 billion in Q2 2024) | - The decrease in operating margin was mainly attributable to the decrease in gross margin, partially offset by improved operating leverage[23] Net Income & EPS Both net income and adjusted net income decreased significantly year-over-year in Q2 2025, leading to a substantial decline in both basic and diluted net income per ADS Q2 2025 Net Income | Metric | Q2 2025 (RMB) | YoY Change | | :--- | :--- | :--- | | Net Income | 1.31 billion (US$0.18 billion) | -31.2% (vs. 1.90 billion in Q2 2024) | | Adjusted Net Income | 1.82 billion (US$0.25 billion) | -32.4% (vs. 2.69 billion in Q2 2024) | | Net income attributable to KE Holdings Inc.'s ordinary shareholders | 1.30 billion (US$0.18 billion) | -31.2% (vs. 1.89 billion in Q2 2024) | | Adjusted net income attributable to KE Holdings Inc.'s ordinary shareholders | 1.82 billion (US$0.25 billion) | -32.4% (vs. 2.68 billion in Q2 2024) | Q2 2025 Net Income per ADS | Metric | Q2 2025 (RMB) | Q2 2024 (RMB) | | :--- | :--- | :--- | | Basic net income per ADS | 1.16 (US$0.16) | 1.67 | | Diluted net income per ADS | 1.11 (US$0.15) | 1.61 | | Adjusted basic net income per ADS | 1.62 (US$0.23) | 2.36 | | Adjusted diluted net income per ADS | 1.55 (US$0.22) | 2.28 | Financial Position & Shareholder Returns Cash and Investments The company maintained a strong liquidity position with a total of RMB 53.1 billion in cash, cash equivalents, restricted cash, and short-term investments as of June 30, 2025 Cash and Investment Balance | Metric | June 30, 2025 (RMB) | | :--- | :--- | | Aggregate amount of cash, cash equivalents, restricted cash and short-term investments | 53.1 billion (US$7.4 billion) | Share Repurchase Program The board upsized the share repurchase authorization from US$3.0 billion to US$5.0 billion and extended it to August 31, 2028, having repurchased a cumulative US$2.18 billion in ADSs since inception - The share repurchase authorization was increased from US$3.0 billion to US$5.0 billion[33] - The share repurchase program was extended to August 31, 2028[33] - Since the launch of the program, the company has repurchased a total of approximately 138.7 million ADSs for an aggregate consideration of approximately US$2.18 billion[32] - In the first half of 2025, the company repurchased approximately US$394 million of its shares, representing about 1.7% of the company's total outstanding shares as of year-end 2024[12] Supplementary Information Conference Call Information The company will host an earnings conference call on August 26, 2025, to discuss financial results, providing registration details, dial-in numbers, and replay information - The earnings conference call will be held on August 26, 2025, at 8:00 AM U.S. Eastern Time[40] - An online registration link is provided to obtain dial-in numbers, a passcode, and a unique access PIN[40] - A replay of the conference call will be accessible until September 2, 2025[40] Exchange Rate RMB amounts in this release are translated to U.S. dollars for convenience at a rate of RMB 7.1636 to US$1.00, the noon buying rate on June 30, 2025 - The exchange rate for RMB to USD translation is 7.1636 to 1.00 as of June 30, 2025[41] Non-GAAP Financial Measures The company uses non-GAAP measures like adjusted income from operations and adjusted net income to evaluate performance by excluding certain expenses to better identify underlying business trends - The company uses non-GAAP financial measures, including adjusted income from operations, adjusted net income, and adjusted EBITDA, to evaluate its operating performance and for business planning[42] - Non-GAAP measures exclude items such as share-based compensation expenses, amortization of intangible assets, changes in fair value of long-term investments, impairment of goodwill and other assets, and related tax effects[43] - These non-GAAP financial measures help identify underlying trends in the company's business and provide useful information about its operating results[42] Company Information & Legal Disclosures About KE Holdings Inc. KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services in China, operating the Beike platform and Lianjia brand across various housing-related sectors - KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services in China[45] - The company owns and operates Lianjia, a leading real estate brokerage brand in China and an integral part of its Beike platform[45] - Its services cover existing and new home sales, home rentals, home renovation and furnishing, and other services[45] Safe Harbor Statement This press release contains forward-looking statements protected under the U.S. Private Securities Litigation Reform Act of 1995, which involve inherent risks and uncertainties, and the company undertakes no obligation to update them - This press release contains forward-looking statements that can be identified by terminology such as "will," "expects," and "anticipates"[47] - Forward-looking statements involve inherent risks and uncertainties, including factors related to business development, financial condition, industry competition, government policies, and cyber-attacks[47] - The company does not undertake any obligation to update any forward-looking statement, except as required under applicable law[47] Investor and Media Inquiries This section provides contact information for KE Holdings Inc.'s investor relations and Piacente Financial Communications for investor and media inquiries - Email contact information is provided for KE Holdings Inc.'s Investor Relations department[49] - Contact names, phone numbers, and emails are provided for Piacente Financial Communications in both China and the United States[49] Unaudited Condensed Consolidated Financial Statements Balance Sheets As of June 30, 2025, the company's total assets were RMB 123.69 billion, a decrease from December 31, 2024, with corresponding declines in total liabilities and shareholders' equity Condensed Consolidated Balance Sheets Summary (in thousands) | Metric | December 31, 2024 (RMB) | June 30, 2025 (RMB) | June 30, 2025 (US$) | | :--- | :--- | :--- | :--- | | Total Assets | 133,149,283 | 123,691,043 | 17,266,602 | | Total Liabilities | 61,701,288 | 54,851,358 | 7,656,955 | | Total Shareholders' Equity | 71,447,995 | 68,839,685 | 9,609,647 | Statements of Operations In Q2 2025, net revenues grew 11.3% YoY, but faster growth in cost of revenues led to significant declines in gross profit and income from operations, with net income falling 31.2% Condensed Consolidated Statements of Operations Summary (Q2, in thousands) | Metric | Q2 2024 (RMB) | Q2 2025 (RMB) | Q2 2025 (US$) | | :--- | :--- | :--- | :--- | | Net revenues | 23,370,430 | 26,010,636 | 3,630,944 | | Cost of revenues | (16,853,380) | (20,310,846) | (2,835,286) | | Gross profit | 6,517,050 | 5,699,790 | 795,658 | | Operating expenses | (4,501,931) | (4,640,334) | (647,765) | | Income from operations | 2,015,119 | 1,059,456 | 147,893 | | Net income | 1,900,404 | 1,306,644 | 182,400 | | Net income attributable to KE Holdings Inc.'s ordinary shareholders | 1,892,061 | 1,301,071 | 181,622 | | Basic net income per ADS | 1.67 | 1.16 | 0.16 | | Diluted net income per ADS | 1.61 | 1.11 | 0.15 | Reconciliation of GAAP and Non-GAAP Results This section provides a detailed reconciliation of GAAP to non-GAAP financial measures, including adjusted income from operations, adjusted net income, and adjusted EBITDA, which also showed significant declines in Q2 2025 GAAP to Non-GAAP Reconciliation Summary (Q2, in thousands) | Metric | Q2 2024 (RMB) | Q2 2025 (RMB) | Q2 2025 (US$) | | :--- | :--- | :--- | :--- | | Adjusted income from operations | 2,812,558 | 1,606,758 | 224,294 | | Adjusted net income | 2,693,338 | 1,820,979 | 254,198 | | Adjusted EBITDA | 3,371,925 | 2,203,097 | 307,539 | | Adjusted net income attributable to KE Holdings Inc.'s ordinary shareholders | 2,684,988 | 1,815,399 | 253,419 | | Adjusted basic net income per ADS | 2.36 | 1.62 | 0.23 | | Adjusted diluted net income per ADS | 2.28 | 1.55 | 0.22 | Segment Contribution Measure This section presents the contribution measure for each business segment, reflecting the revenue and cost structures of the existing home, new home, home renovation, home rental, and other services Segment Contribution Summary (Q2, in thousands) | Segment | Q2 2024 (RMB) | Q2 2025 (RMB) | Q2 2025 (US$) | | :--- | :--- | :--- | :--- | | Contribution from existing home transaction services | 3,483,102 | 2,684,041 | 374,677 | | Contribution from new home transaction services | 1,985,965 | 2,103,438 | 293,629 | | Contribution from home renovation and furnishing services | 1,263,873 | 1,466,644 | 204,736 | | Contribution from home rental services | 186,215 | 474,422 | 66,227 | | Contribution from emerging and other services | 789,592 | 321,529 | 44,883 | Statements of Cash Flows In Q2 2025, net cash from operating activities decreased substantially, net cash from investing activities shifted to an inflow, and net cash used in financing activities increased, resulting in a net decrease in cash Condensed Consolidated Statements of Cash Flows Summary (Q2, in thousands) | Cash Flow Type | Q2 2024 (RMB) | Q2 2025 (RMB) | Q2 2025 (US$) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 4,104,624 | 826,213 | 115,335 | | Net cash (used in)/provided by investing activities | (8,134,019) | 1,664,823 | 232,401 | | Net cash used in financing activities | (3,262,930) | (6,182,037) | (862,978) | | Net decrease in cash, cash equivalents and restricted cash | (7,256,659) | (3,685,811) | (514,519) |