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KE Holdings (BEKE) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Real Estate· Mar 16, 2026

Source: earnings call transcript

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

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

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%—

BEKE operating KPIs by quarter

BEKE operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Dec 2025 Q4 FY25 Mar 2026 Q1 FY26Change vs prior quarter
Rental units under management Home rental services
700K+ At the end of Q4, we had over 700,000 rental units under management, a year-on-year increase of around 62%. Source: earnings call transcript
740K+ As of the end of the Q1, the number of rental units under our management exceeded 740,000 units representing an increase of around 47% year-over-year. Source: earnings call transcript
—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Risks & headwinds

High base in prior year Q4 FY25

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

One-off expenses related to cost optimization initiatives Q4 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 players Q4 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 capital FY25

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

Decision Support Service Model Validation

2026
Current Under validation
Target Improved 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.

Find out whether BEKE delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.