KE Holdings Inc. (BEKE) Q4 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

Despite AI-driven efficiencies and profitability in home rental services, the company faces significant revenue declines and increased operating losses. The Q&A reveals a shift towards efficiency, but management's avoidance of specifics raises concerns. The negative financial performance, especially with declining gross profits and net income, outweighs the positive AI integration and rental growth. The overall sentiment is negative, predicting a stock price decrease of -2% to -8%.

Key Financial Performance

Fee Revenue Remained relatively stable year-over-year, with revenue from non-housing transaction business accounting for 41% of total revenue, a record high. This stability was due to a diversified and countercyclical business structure.

Existing Home GTV Accounted for 67.6% of total GTV, with connected brands contributing approximately 63% of existing home GTV. This reflects a focus on market segments with structural growth potential.

Operational Efficiency Improved with fixed labor costs in the existing home business declining sequentially for four consecutive quarters. Contribution margin for the existing home business rebounded sequentially in Q4.

New Home Business Contribution Margin Increased by 0.2 percentage points year-over-year due to decreased variable cost ratio and fixed personnel expenses.

Home Renovation Business Contribution Margin Increased by 0.7 percentage points year-over-year, with operating losses significantly narrowed.

Home Rental Services Contribution Margin Increased by 3.6 percentage points year-over-year, turning profitable at the operating level for the full year.

Operating Expenses Ratio Decreased by 1.4 percentage points year-over-year, reflecting improved operational efficiency.

Share Repurchase Totaled approximately USD 921 million in 2025, a year-over-year increase of around 29%. This accounted for approximately 170% of the 2025 non-GAAP net profit.

Q4 GTV RMB 724.1 billion, a year-over-year decrease of 36.7% due to a high base in 2024.

Q4 Revenue RMB 22.2 billion, a year-over-year decrease of 28.7% due to a decline in transaction scale.

Q4 Gross Profit Margin 21.4%, a year-over-year decrease of 1.6 percentage points due to declining revenue contribution from higher-margin segments.

Q4 GAAP Net Profit RMB 82 million, a year-over-year decrease of 85.7%, partially affected by one-off expenses related to cost optimization initiatives.

Q4 Non-GAAP Net Profit RMB 517 million, a year-over-year decrease of 61.5%, also impacted by one-off expenses.

Existing Home Business GTV in Q4 RMB 482 billion, a year-over-year decrease of 35.3%, with revenue at RMB 5.4 billion, down 39% year-over-year.

New Home Business GTV in Q4 RMB 207 billion, a year-over-year decrease of 41.7%, with revenue at RMB 7.3 billion, down 44.5% year-over-year.

Home Renovation and Franchise Services Revenue in Q4 RMB 3.6 billion, a year-over-year decrease of 12%, reflecting a prudent balance between scale and risk.

Home Rental Services Revenue in Q4 RMB 5.4 billion, a year-over-year increase of 18.1%, driven by a 62% increase in rental units under management.

Emerging and Other Services Revenue in Q4 RMB 459 million, a year-over-year increase of 4.5%.

Store Costs in Q4 RMB 710 million, a year-over-year decrease of 9.6%, driven by optimization of rental costs and store structure.

Q4 Gross Profit RMB 4.8 billion, a year-over-year decrease of 33.7%, with gross margin down 1.6 percentage points year-over-year.

Q4 GAAP Operating Expenses RMB 4.9 billion, a year-over-year decrease of 20.4%, reflecting cost optimization efforts.

Q4 GAAP Operating Loss RMB 147 million, compared to a profit of RMB 1.01 billion in Q4 2024, due to increased operating expenses ratio.

Q4 Non-GAAP Operating Income RMB 323 million, a year-over-year decrease of 81.6%, impacted by increased operating expenses ratio.

Q4 GAAP Net Income RMB 82 million, a year-over-year decrease of 85.7%, impacted by one-off expenses.

Q4 Non-GAAP Net Income RMB 517 million, a year-over-year decrease of 61.5%, impacted by one-off expenses.

You have reached the limit. Sign up to access full content

Get started

Operating Highlights

AI integration in housing transactions: AI is being embedded into core operational scenarios, such as marketing, customer interaction, and decision support, to enhance service quality and efficiency.

Home renovation and furnishing: The business is evolving towards standardized and scalable service models, with improved profitability and reduced service variance.

Existing home market: The platform facilitated RMB 2.15 trillion in GTV, with a 10% year-over-year increase in transactions, highlighting resilient demand.

New home market: Facilitated RMB 890.9 billion in GTV, focusing on structural efficiency and sustainable growth.

Operational efficiency: Cost structure optimization led to improved profitability across segments, including a 1.4 percentage point reduction in operating expenses ratio year-on-year.

AI-driven efficiency: AI is improving resource allocation, customer matching, and operational workflows, enhancing productivity and reducing costs.

Shift to efficiency-driven growth: Transitioned from sales-driven to efficiency-driven growth, focusing on technology and cost optimization.

Focus on customer value: Strategic pivot to enhance customer decision-making support and improve service certainty.

You have reached the limit. Sign up to access full content

Get started

Risk or Challenges

Market Fluctuations: Fee revenue remained relatively stable, but market fluctuations impacted overall performance, with a notable year-on-year decline in Q4 GTV and revenue.

Cost Optimization Initiatives: One-off expenses related to cost optimization weighed on near-term profitability, despite positioning the company for greater operating leverage in the future.

Existing Home Business Decline: The scale of existing home transactions declined significantly in Q4, with a 35.3% year-on-year decrease in GTV and a 39% year-on-year decrease in revenue.

New Home Business Challenges: New home business faced a 41.7% year-on-year decrease in GTV and a 44.5% year-on-year decrease in revenue in Q4, driven by high base effects and market volatility.

Home Renovation Business Risks: Revenue from home renovation services decreased by 12% year-on-year in Q4, with additional provisions for potential warranty costs impacting profitability.

Home Rental Services Model Shift: The shift towards a lighter product model temporarily impacted revenue scale, despite profitability improvements.

Operating Expenses: Q4 operating expenses increased sequentially by 13.3%, driven by one-off costs, impacting profitability.

Profitability Decline: Q4 GAAP net profit decreased by 85.7% year-on-year, and non-GAAP net profit fell by 61.5% year-on-year, reflecting challenges in maintaining profitability.

Economic Uncertainty: The company maintains a neutral market view for 2026, citing continued differentiation in demand structures and the scale of China's real estate market as potential risks.

You have reached the limit. Sign up to access full content

Get started

Guidance & Outlook

2026 Financial Discipline and Growth Balance: The company will maintain prudent financial discipline and strike a balance between efficiency and growth. It aims to improve earning qualities, optimize capital-efficient structures, and safeguard long-term competitiveness to create sustainable shareholder value.

2026 Decision Support Service Model Validation: The company will focus on testing how the decision support service model improves conversion rates and unit economics. This will be a key focus area for 2026.

2026 Strengthening Service and Organizational Capabilities: The company plans to strengthen service and organizational capabilities to demonstrate greater operational resilience as the industry stabilizes.

AI Integration in Operations: AI will be embedded into core operational scenarios, including demand identification, precise matching, pricing decision support, and process automation. This will enhance service provider capabilities and improve customer experience.

Existing Home Business Focus: The company will focus on delivering greater certainty in transactions for customers, improving matching precision, and strengthening unit economics. It aims to upgrade transaction services into full-process decision support services.

New Home Business Strategy: The company is transitioning from relying on channel distribution advantages to driving growth through structural efficiency improvements. This includes optimizing customer, project, and service provider mix and improving matching precision.

Home Renovation and Furnishing Business: The company is advancing product standardization, design digitalization, and supply chain integration to improve profitability and scalability. It aims to establish a clear path toward long-term profitability.

Home Rental Services: The company is upgrading product structures towards lighter, more resilient models and embedding AI capabilities into key areas to improve operational efficiency and profitability. It aims to form a stable profitability profile and consistent cash flow.

You have reached the limit. Sign up to access full content

Get started

Shareholder Return Plan

Final Cash Dividend Plan for 2025: Approximately USD 0.3 billion, bringing the full year total shareholder return to approximately USD 1.22 billion, a year-on-year increase of around 9%. This accounts for approximately 170% of the 2025 non-GAAP net profit.

Total Share Repurchase in 2025: Approximately USD 921 million, a year-on-year increase of around 29%. This represents approximately 4.1% of total shares outstanding at the end of 2024.

Cumulative Share Repurchase since September 2022: Approximately USD 2.5 billion, reducing the company's total issued shares by approximately 12.6% since the program's launch.

You have reached the limit. Sign up to access full content

Get started

Key Q&A

Q:What changes have been observed in agent efficiency after restructuring and investments, and what is the future efficiency-driven growth strategy?

A:The company has shifted from scale-driven growth to efficiency-driven growth, reallocating resources to improve operational efficiency. By 2025, active connected stores and agents grew by 29% and 27%, respectively. The company is leveraging AI-driven tools and focusing on high-performing stores and agents to enhance efficiency and customer service.

Q:How will innovations in the new home business marketing model change company dynamics and relationships with developers?

A:The company is transitioning from a channel player to an integrated capability platform, focusing on digitalization and online decision-making support. It aims to provide developers with integrated solutions, improve traffic resource allocation, and enhance matching efficiency. The goal is to evolve into an efficiency-enhancing platform for developers and homebuyers, diversifying revenue streams and sustaining competitiveness.

Q:What is the potential impact of AI on the real estate sector, and how is the company using AI to empower its business lines?

A:AI is expected to reshape the division of labor and value creation in the real estate sector. The company uses AI for tasks like information gathering, demand matching, and workflow coordination, improving efficiency and enabling agents to focus on complex decision-making. AI also enhances rental business operations and amplifies the value of professional services, aiming to integrate AI with organizational culture and customer trust.

Q:How does the company view the influence of new media and KOLs on property transactions?

A:The company sees new media and KOLs as addressing customer needs by providing decision support and reducing decision costs. It views this as an opportunity to combine content capabilities, professional services, and customer trust to build a competitive advantage. The focus is on understanding the person behind the transaction and providing trustworthy services.

Q:What is the current status and future outlook for the home renovation and furnishing business?

A:The company has focused on improving unit economics and profitability by optimizing product structure, reducing costs, and enhancing delivery efficiency. Centralized procurement and digital tools have improved cost structure and productivity. In 2026, the company plans disciplined scale expansion, leveraging data integration and modular components to transform the business into a scalable industrialized system.

Q:What is the long-term trajectory and potential for improvement in the home rental business?

A:The rental business has turned profitable, with managed home units growing by 62% in 2025. Improvements in unit economics are driven by workforce productivity, lower customer acquisition costs, and optimized product structure. The company aims for sustained scale expansion, improving profitability quality, and stable cash flow.

Q:Review of Unclear Management Responses

A:Management avoided providing specific timelines or quantitative details for certain initiatives, such as the exact timeline for achieving profitability in the home renovation business or the precise impact of AI on long-term organizational efficiency. Responses often focused on broad strategies and qualitative improvements without concrete metrics.

You have reached the limit. Sign up to access full content

Get started

Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

BEKE Transcript

KE Holdings Inc. (BEKE) Q4 2025 Earnings Call Transcript

Unknown3-16

KE Holdings Inc. (BEKE) Q3 2025 Earnings Call Transcript

Unknown11-10

The earnings call presents a mixed outlook. Positive aspects include strong growth in home rental services and cost control measures. However, the decline in gross profit and operating margins, coupled with unclear guidance on new home business growth, tempers enthusiasm. The Q&A section reveals concerns about market volatility and management's vague responses, which may cause investor uncertainty. The expanded share repurchase program is a positive signal, but without market cap information, the overall impact remains neutral.

KE Holdings Inc. (BEKE) Q2 2025 Earnings Call Transcript

Unknown8-26

The earnings call presents a mixed picture. While there are positive aspects like growth in new home transactions and home renovation revenue, there are significant declines in gross margin and net income. The Q&A highlights management's focus on efficiency and AI, but also reveals concerns over policy uncertainties and vague responses on future market trajectories. The shareholder return plan and cash liquidity are positives, but the overall sentiment, considering the market outlook and financial metrics, remains neutral.

KE Holdings Inc. (NYSE:BEKE) Q1 2025 Earnings Call Transcript

Unknown5-17

The earnings report shows mixed signals: strong revenue growth and a significant increase in net income, but a decline in gross margins and net operating cash outflow raise concerns. The Q&A section reveals cautious optimism with some uncertainty in the housing market due to international trade frictions. The share repurchase program is a positive, but the lack of clear guidance on market impact and future margins tempers enthusiasm. Overall, the sentiment remains balanced, leading to a neutral prediction for stock price movement.

BEKE Report

Frequently Asked Questions

Where does this earnings call transcript come from?

All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.

How soon is the transcript available after the earnings call ends?

Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.

Is the transcript edited or altered in any way?

No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.

Why do some answers appear as “Unclear” or “Inaudible”?

When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.

Who creates the AI Summary and Key Q&A highlights shown above the transcript?

They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.