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    BEKE
    Earnings call· Dec 2025(Q4 FY25)

    KE Holdings Q4 FY25 earnings call BEKE

    Mar 16, 2026 Source

    Executive summary

    KE Holdings Inc. Q4 FY25 — Strategic Pivot to Efficiency-Driven Growth and Strong Shareholder Returns

    KE Holdings pivoted to an efficiency-driven growth model in Q4 FY25, focusing on service capability and operational efficiency rather than resource scale. Despite a challenging market and a high base leading to Q4 revenue and GTV declines, the company demonstrated improved operational efficiency across segments and delivered significant shareholder returns. The strategy emphasizes leveraging data and AI to enhance customer value and service professionalism, aiming for sustainable growth and profitability across its diversified residential service ecosystem.

    Highlights

    5

    • Fee revenue remained relatively stable in FY25, outperforming industry trends, with non-housing transaction business accounting for a record high of 41% of total revenue.

    • Operational efficiency improved across segments, with existing home contribution margin rebounding sequentially in Q4, new home contribution margin up 2.6 percentage points YoY, and home rental services turning profitable for the full year 2025.

    • Strong shareholder returns in FY25, including approximately USD 921 million in share repurchases and a USD 0.3 billion cash dividend, totaling USD 1.22 billion, representing 170% of non-GAAP net profit.

    • Managed rental units exceeded 700,000 by year-end 2025, a 62% YoY increase, with rental services contribution margin up 5.9 percentage points YoY in Q4.

    • Existing home sales transactions increased by over 10% YoY in 2025, reaching a record high, with platform-connected store transaction volume up 15% YoY.

    Concerns

    5

    • Q4 GTV decreased by 36.7% YoY to RMB 724.1 billion, and revenue decreased by 28.7% YoY to RMB 22.2 billion, due to a high base in Q4 2024.

    • Q4 GAAP net profit was RMB 82 million, down 85.7% YoY, and non-GAAP net profit was RMB 517 million, down 61.5% YoY, partially affected by one-off cost optimization expenses.

    • Gross profit margin in Q4 was 21.4%, a YoY decrease of 1.6 percentage points, mainly due to declining revenue contribution from existing and new home segments.

    • Home renovation and franchise services revenue decreased by 12% YoY in Q4 to RMB 3.6 billion, reflecting a prudent balance between scale and risk.

    • Q4 GAAP operating losses were RMB 147 million, compared to a profit of RMB 1.01 billion in Q4 2024, with operating margin at negative 0.7%.

    Guidance & targets

    3
    CategoryTargetConfidence
    Financial Discipline and Growth Balance
    Maintain prudent financial discipline and strike a balance between efficiency and growth
    medium materiality
    Medium
    Decision Support Service Model Validation
    Validate decision support service model, testing improvements in conversion rates and unit economics
    medium materiality
    Medium
    Home Renovation Business Transformation
    Transform home renovation from a project-based business into a replicable and scalable industrialized capacity system
    low materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Existing Home Business
    Q4 GTV and revenue declined due to a higher base in the prior year. GTV outperformed revenue YoY due to higher GTV contribution from connected agents (net revenue recognition). QoQ, GTV outperformed revenue due to decreased rental brokerage services revenue amid seasonal fluctuations. Contribution margin remained stable YoY and rose QoQ, reflecting disciplined headcount control and organizational efficiency.
    Q4 GTV: RMB 482 billionQ4 GTV growth: -35.3% YoYQ4 GTV growth: -4.7% QoQQ4 Platform service revenue growth: -19.9% YoYFY25 GTV: RMB 2.15 trillionFY25 Sales transactions: up >10% YoYFY25 Platform connected store transaction volume: up 15% YoYConnected stores (year-end): >58,000Agents (year-end): >445,000FY25 Average in-home transaction per connected agent: >3 (up 6% YoY, from <2 in 2022)Q1 Agent activity (excluding Beijing/Shanghai) digital conversion rate for in-home sales: up ~8% QoQQ1 Average per agent commission income (existing/new home): up 2% QoQFY25 Active connected stores: up 29% YoYFY25 Active connected agents: up 27% YoY
    		RMB 5.4 billion-39%-9.2%40.4% contribution margin
    New Home Business
    Q4 GTV and revenue declined YoY due to a high base, but increased sequentially. GTV outperformed revenue YoY due to a higher base of monetization rate. Revenue outperformed GTV QoQ due to seasonal factors. Contribution margin rose YoY and QoQ, benefiting from cost structure optimization.
    Q4 GTV: RMB 207 billionQ4 GTV growth: -41.7% YoYQ4 GTV growth: 5.5% QoQFY25 GTV: RMB 890.9 billion
    		RMB 7.3 billion-44.5%9.4%28.3% contribution margin
    Home Renovation and Franchise Services
    Q4 revenue softened due to a prudent balance between scale and risk, as the company optimized channel structure. Contribution margin decreased YoY and QoQ mainly due to a provision for potential warranty costs, but core cost structure continues to improve from centralized procurement.
    FY25 Revenue: RMB 15.4 billionFY25 Revenue growth: 4.4% YoYFY25 Contribution margin: 31.4% (up 0.7 percentage points YoY)FY25 Operating losses: narrowed significantlyFY25 Centralized procurement for key materials: ~80%FY25 Centralized procurement for auxiliary materials: ~60%
    		RMB 3.6 billion-12%-15.9%28.8% contribution margin
    Home Rental Services
    Revenue growth was driven by rapid growth in managed rental units. Sequential decrease in revenue was due to a change in accounting method (gross to net revenue recognition) for a lighter product model. Contribution margin improved significantly YoY and QoQ due to structural shift towards lighter product models and operational efficiency gains, including improved productivity of property managers and AI technology penetration.
    Rental units under management (end of Q4): >700,000Rental units under management growth: 62% YoYProportion of rental units with net revenue recognition (end of 2025): >30%FY25 Contribution margin: 8.6% (up 3.6 percentage points YoY)FY25 Operating level: profitableFY25 Average monthly units acquired per property manager: up 7% YoYFY25 Units managed per person: up 42% YoY
    		RMB 5.4 billion18.1%-5.5%10.4% contribution margin
    Emerging and Other Services
    Revenue increased both year-on-year and quarter-on-quarter.
    		RMB 459 million4.5%16%—

    Operational metrics

    20
    Total Share Repurchase
    USD 921 millionup 29% YoY
    FY25

    Representing approximately 4.1% of total shares outstanding at the end of 2024.

    Final Cash Dividend
    USD 0.3 billion
    FY25

    To be funded by surplus cash on the balance sheet.

    Total Shareholder Return
    USD 1.22 billionup 9% YoY
    FY25

    Significantly exceeded non-GAAP net income, representing around 170% of non-GAAP net income for the year.

    Gross Transaction Value (GTV)
    RMB 724.1 billiondown 36.7% YoY
    Q4 FY25

    Overall company GTV.

    Revenue
    RMB 22.2 billiondown 28.7% YoY
    Q4 FY25

    Overall company revenue.

    Gross Profit Margin
    21.4%down 1.6 percentage points YoY
    Q4 FY25

    Mainly due to declining revenue contribution of the existing home and the new home segments, partially offset by home rental business gross profit margin expansion.

    GAAP Net Profit
    RMB 82 milliondown 85.7% YoY and 89% QoQ
    Q4 FY25

    Bottom line performance in Q4 was partially affected by one-off expenses related to cost optimization initiatives.

    Non-GAAP Net Profit
    RMB 517 milliondown 61.5% YoY and 59.8% QoQ
    Q4 FY25

    Bottom line performance in Q4 was partially affected by one-off expenses related to cost optimization initiatives.

    Store Costs
    RMB 710 milliondown 9.6% YoY, up 7.2% QoQ
    Q4 FY25

    Primarily driven by optimization of rental cost for Lianjia stores and refinement of store structure. Sequential increase due to one-off expenses from store closures.

    GAAP Operating Expenses
    RMB 4.9 billiondown 20.4% YoY, up 13.3% QoQ
    Q4 FY25

    Quarter-on-quarter increase mainly due to one-off expenses related to cost optimization initiatives.

    G&A Expenses
    RMB 2.3 billiondown 23.9% YoY, up 20.8% QoQ
    Q4 FY25

    YoY decrease due to reduced bad debt provisions and lower share-based compensation. Sequential increase due to one-off optimization costs.

    Sales and Marketing Expenses
    RMB 1.9 billiondown 17.7% YoY, down 11.7% QoQ
    Q4 FY25

    YoY decrease due to lower personnel-related expenses. Sequential decrease due to seasonal marketing and promotion expenses.

    R&D Expenses
    RMB 715 millionflat YoY, up 10.3% QoQ
    Q4 FY25

    Sequential increase mainly due to one-off optimization costs.

    GAAP Operating Losses
    RMB 147 millionvs profit of RMB 1.01 billion in Q4 2024 and RMB 608 million in Q3
    Q4 FY25

    Operating margin was negative 0.7%, a year-on-year decrease of 3.9 percentage points and a sequential decrease of 3.3 percentage points.

    Non-GAAP Income from Operations
    RMB 323 milliondown 81.6% YoY and 72.5% QoQ
    Q4 FY25

    Non-GAAP operating margin was 1.5%, a year-on-year decrease of 4.2 percentage points and a sequential decrease of 3.6 percentage points.

    Net Operating Cash Inflow
    RMB 1.9 billion
    Q4 FY25

    Full year net operating cash flow was below profit performance, mainly affected by timing factors in working capital.

    New Home Accounts Receivable Turnover Days
    44 daysdown ~10 days QoQ
    Q4 FY25

    Remaining at a healthy level.

    Share Repurchase
    USD 246 million
    Q4 FY25

    Part of the total share repurchase program.

    Total Cash Liquidity
    RMB 68.7 billion
    Q4 FY25

    Excluding customer deposit payable, with a robust cash reserve.

    Total Shares Repurchased (since Sep 2022)
    USD 2.5 billion
    End of 2025

    Representing a total reduction of approximately 12.6% of company's total issued share prior to the program launch.

    Industry KPIs

    1
    MetricValueDetails
    Resilient vs transactional revenue split41%%

    Risks & headwinds

    4
    High base in prior yearQ4 FY25

    Q4 GTV decreased by 36.7% YoY; revenue decreased by 28.7% YoY

    One-off expenses related to cost optimization initiativesQ4 FY25

    Partially affected Q4 profitability; Q4 GAAP operating losses of RMB 147 million

    Mitigation: These adjustments are helping to streamline cost structure and position the company with greater operating leverage going forward.

    Market volatility and liquidity challenges for industry playersQ4 FY25

    New home business scale declined YoY; home renovation revenue softened by 12% YoY

    Mitigation: Proactively optimized channel structure and moderated pace in home renovation, prioritizing underlying profitability structure.

    Timing factors in working capitalFY25

    FY25 net operating cash flow was below profit performance

    Mitigation: Excluding impact of accrued bonus payments and change in contract liability, net operating cash flow was broadly consistent with profitability.

    What to watch in Q1 FY26

    5

    Decision Support Service Model Validation

    2026
    CurrentUnder validation
    TargetImproved conversion rates and unit economics

    Why it matters

    This model is central to the company's strategic pivot to efficiency-driven growth and long-term profitability.

    For Beike, 2026 will be a year of validating our decision support service model. We will focus on testing how this model improves conversion rates and unit economics.

    Q&A highlights

    6

    After restructuring and investments, have agent efficiency changed? If the market recovers, does the company have enough power to gain share? What are the execution plans for future efficiency-driven growth?

    The strategic upgrade is about value creation and improving penetration, conversion efficiency, and unit outputs, not capacity cutting. Resources are reallocated to effective capacity, focusing on high-performing stores and agents. Data and AI are key drivers for redesigning platform operations. Active connected stores and agents grew significantly YoY, and per-agent commission income increased sequentially in Q1.

    “What we are doing is reallocating resources from nominal capacity to effective capacity, concentrating our organizational efforts on areas that generally solve customer problems.”

    asked by Timothy Zhao · answered by Tao Xu

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Pivot to Efficiency-Driven Growth

    KE Holdings is undergoing a strategic pivot from a sales-driven to an efficiency-driven growth model, emphasizing service capability and operational efficiency over resource scale. This transformation involves rebuilding service logic around customer value, aiming to improve platform customer coverage, resource conversion efficiency, and unit outputs. The company is leveraging data and AI to systematically redesign platform operations and reallocate resources from nominal to effective capacity, concentrating efforts on areas that solve customer problems and enhance decision support.

    02

    Evolution of China's Housing Market

    The Chinese residential market is experiencing significant structural changes, with existing home transactions reaching a historical high in 2025 and the new home market showing increased differentiation towards higher quality projects. Customer transaction behavior is also evolving, with buyers and sellers taking longer to complete transactions due to increased complexity and the need for careful asset reallocation. This shift highlights a strong consumer demand for safe, professional, transparent, and reliable services, moving the industry towards a new stage where service capability and operational efficiency define core competency.

    03

    AI Integration in Operations

    AI is being embedded directly into core operational scenarios across the platform to enhance productivity and service professionalism. In housing transactions, AI acts as a 'copilot' for agents, automating tasks like marketing material generation, property interpretations, and preliminary risk checks, allowing agents to focus on complex decision-making and client interaction. For the rental business, AI assists in property acquisition decisions, rental pricing recommendations, and leasing matching, leveraging historical data to improve efficiency, optimize cost structures, and reduce operational risk.

    04

    New Home Business Transformation

    The new home business is transitioning from a traditional channel distribution model to an integrated capability platform. This involves enhancing online decision-making support for homebuyers through stronger data and product capabilities, and optimizing traffic resource allocation to improve structural matching efficiency between projects and potential buyers. For developers, the company aims to provide integrated solutions covering product acquisition, customer acquisition, matching, and sales pace management, evolving beyond a traffic distribution model to an efficiency-enhancing platform for the entire ecosystem.

    05

    Home Renovation & Rental Business Maturation

    Both the home renovation and home rental businesses are entering a healthier stage of development, with a strong emphasis on profit quality and building sustainable operating models. Home renovation focuses on product standardization, design digitalization (e.g., 'packager' system), supply chain integration, and standardized delivery systems, leading to improved profitability and narrowed operating losses. The home rental segment, which achieved full-year profitability in 2025, is driven by improved unit economics through workforce productivity gains, lower customer acquisition costs, and product structure optimization towards lighter, more resilient models.

    AI-generated summary of the company’s earnings call. Not investment advice.