Q2 FY2026
Filed Aug 24, 2026KE Holdings reported second-quarter net revenues of RMB24.5 billion (US$3.6 billion), down 5.7% year-over-year, while net income increased 100.8% to RMB2,624 million (US$387 million) as gross margin rose to 28.6%.
Housing transaction-service revenues and GTV increased, while broad cost optimization lifted gross margin by 6.7 percentage points and more than doubled net income. The result remained mixed at the revenue level because home renovation and furnishing and home rental services declined, producing a 5.7% decrease in total net revenues.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Gross transaction value (GTV)other | RMB933.8 billion (US$137.6 billion) | – | increase of 6.3% year-over-year |
| GTV of existing home transactionsother | RMB629.9 billion (US$92.8 billion) | – | increase of 8.0% year-over-year |
| GTV of new home transactionsother | RMB258.4 billion (US$38.1 billion) | – | increase of 1.2% year-over-year |
| Total net revenuesGAAP | RMB24.5 billion (US$3.6 billion) | – | decrease of 5.7% year-over-year |
| Total cost of revenuesGAAP | RMB17.5 billion (US$2.6 billion) | – | decrease of 13.7% year-over-year |
| Gross profitGAAP | RMB7.0 billion (US$1.0 billion) | – | increase of 23.1% year-over-year |
| Gross marginGAAP | 28.6% | – | – |
| Total operating expensesGAAP | RMB4.0 billion (US$0.6 billion) | – | decrease of 14.1% year-over-year |
| Sales and marketing expensesGAAP | RMB1.4 billion (US$0.2 billion) | – | decrease of 26.1% year-over-year |
| General and administrative expensesGAAP | RMB2.0 billion (US$0.3 billion) | – | decrease of 2.1% year-over-year |
| Research and development expensesGAAP | RMB549 million (US$81 million) | – | decrease of 13.4% year-over-year |
| Income from operationsGAAP | RMB3,026 million (US$446 million) | – | – |
| Operating marginGAAP | 12.3% | – | – |
| Adjusted income from operationsnon-GAAP | RMB3,592 million (US$529 million) | – | – |
| Adjusted operating marginnon-GAAP | 14.6% | – | – |
| Adjusted EBITDAnon-GAAP | RMB4,175 million (US$615 million) | – | – |
| Net incomeGAAP | RMB2,624 million (US$387 million) | – | increase of 100.8% year-over-year |
| Adjusted net incomenon-GAAP | RMB3,185 million (US$469 million) | – | increase of 74.9% year-over-year |
| Net income attributable to KE Holdings Inc.'s ordinary shareholdersGAAP | RMB2,623 million (US$387 million) | – | – |
| Adjusted net income attributable to KE Holdings Inc.'s ordinary shareholdersnon-GAAP | RMB3,184 million (US$469 million) | – | – |
| Basic net income per ADS attributable to KE Holdings Inc.'s ordinary shareholdersGAAP | RMB2.43 (US$0.36) | – | – |
| Diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholdersGAAP | RMB2.35 (US$0.35) | – | – |
| Adjusted basic net income per ADS attributable to KE Holdings Inc.'s ordinary shareholdersnon-GAAP | RMB2.95 (US$0.43) | – | – |
| Adjusted diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholdersnon-GAAP | RMB2.85 (US$0.42) | – | – |
| Net cash provided by operating activitiesGAAP | RMB6,612,138 thousand (US$974,510 thousand) | – | – |
| Number of storesother | 60,274 as of June 30, 2026 | – | 0.4% decrease from one year ago |
| Number of active storesother | 57,803 as of June 30, 2026 | – | 1.5% decrease from one year ago |
| Number of agentsother | 540,634 as of June 30, 2026 | – | 3.1% decrease from one year ago |
| Number of active agentsother | 454,571 as of June 30, 2026 | – | 7.5% decrease from one year ago |
| Mobile monthly active users (MAU)other | 45.7 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Existing home transaction servicesAn 8.0% increase in GTV of existing home transactions and a 27.8% increase in platform service, franchise service and other value-added-services revenues, partially offset by a 1.4% decrease in commission revenue. | RMB7.0 billion (US$1.0 billion) | – | increased by 4.5% |
| New home transaction servicesDeeper coverage of high-quality projects contributed to a 1.2% increase of GTV of new home transactions. | RMB8.9 billion (US$1.3 billion) | – | increased by 3.8% |
| Home renovation and furnishingThe Company proactively optimized its customer acquisition channel mix and moderated the pace of certain non-brokerage channels. | RMB3.2 billion (US$0.5 billion) | – | decreased by 30.1% |
| Home rental servicesAn increasing proportion of the new Carefree Rent product offering recognizes revenue based on net service fees; the decrease was partially offset by an increase in rental units under the Carefree Rent business. | RMB4.8 billion (US$0.7 billion) | – | decreased by 14.8% |
| Emerging and other servicesIncrease of revenues from financial services. | RMB546 million (US$80 million) | – | increased by 26.4% |
Capital returns
- The Company repurchased approximately US$250 million of its shares in the second quarter of 2026 and conducted share repurchases in Hong Kong for the first time.
- The share repurchase program permits repurchases of up to US$5 billion worth of Class A ordinary shares and/or ADSs until August 31, 2028, subject to the stated shareholder mandate conditions.
- As of June 30, 2026, the Company had purchased approximately 185.4 million ADSs, representing approximately 556.3 million Class A ordinary shares, on the New York Stock Exchange for approximately US$2,967.7 million.
- As of June 30, 2026, the Company had purchased approximately 4.9 million Class A ordinary shares on the Hong Kong Stock Exchange for approximately HK$201.5 million.
What drove it
- Existing-home GTV increased 8.0% year-over-year, and GTV served by connected agents increased 14.3%, driven by improved productivity per connected store.
- New-home revenue growth reflected deeper coverage of high-quality projects.
- Contribution margins increased year-over-year in each major business line: existing home transaction services to 46.1% from 39.9%, new home transaction services to 28.8% from 24.4%, home renovation and furnishing to 39.6% from 32.1%, and home rentals to 15.3% from 8.4%.
- Cost of revenues fell 13.7%, with lower home-renovation costs, home-rental costs, store costs, internal compensation and commission-split costs.
- Operating expenses declined 14.1% following prior cost optimization initiatives, including lower personnel costs, advertising and promotion expenses, and technical service fees.
Concerns
- Total net revenues decreased 5.7% year-over-year because home renovation and furnishing revenue decreased 30.1% and home rental-services revenue decreased 14.8%.
- Commission revenue from existing home transaction services decreased 1.4%, reflecting a 3.1% decline in GTV of existing home transactions served by Lianjia stores.
- The number of active stores decreased 1.5% from one year ago and the number of active agents decreased 7.5% from one year ago.
- Average mobile MAU decreased to 45.7 million from 48.7 million in the same period of 2025.
- Interest income, net declined to RMB126,515 thousand from RMB223,940 thousand.
What to watch
- Whether productivity per connected store continues to support existing-home transaction-service growth as store and active-agent counts decline.
- The pace of revenue recovery in home renovation and furnishing following the optimization of customer-acquisition channels and moderation of non-brokerage channels.
- The effect of Carefree Rent's increasing mix of offerings recognized under the net service-fee method on reported home-rental revenue and contribution margin.
- Sustainability of the 28.6% gross margin and 14.6% adjusted operating margin as the Company directs resources toward customer-value capabilities.
- Further share repurchase activity under the program that runs until August 31, 2028.
Balance sheet and cash flow
- Cash, cash equivalents, restricted cash and short-term investments totaled RMB56.0 billion (US$8.3 billion) as of June 30, 2026.
- Cash and cash equivalents were RMB7,387,006 thousand (US$1,088,710 thousand) as of June 30, 2026, compared with RMB7,773,182 thousand as of December 31, 2025.
- Restricted cash was RMB9,039,096 thousand (US$1,332,198 thousand) as of June 30, 2026, compared with RMB8,170,605 thousand as of December 31, 2025.
- Short-term investments were RMB39,585,933 thousand (US$5,834,245 thousand) as of June 30, 2026, compared with RMB39,579,961 thousand as of December 31, 2025.
- Short-term borrowings were RMB85,807 thousand (US$12,646 thousand) as of June 30, 2026, compared with RMB207,717 thousand as of December 31, 2025.
- Long-term borrowings, current portion, were RMB191,689 thousand (US$28,251 thousand) as of June 30, 2026; long-term borrowings were nil, compared with RMB182,917 thousand as of December 31, 2025.
- Net cash used in investing activities was RMB6,779,212 thousand (US$999,132 thousand) in the second quarter of 2026, compared with net cash provided by investing activities of RMB1,664,823 thousand in the second quarter of 2025.
- Net cash used in financing activities was RMB3,377,191 thousand (US$497,740 thousand) in the second quarter of 2026, compared with RMB6,182,037 thousand in the second quarter of 2025.
- Cash, cash equivalents and restricted cash at the end of the period were RMB16,426,102 thousand (US$2,420,908 thousand), compared with RMB19,232,574 thousand in the second quarter of 2025.
Analysis
KE Holdings delivered a profitability-led second quarter. Total net revenues decreased 5.7% to RMB24.5 billion (US$3.6 billion), despite GTV increasing 6.3% to RMB933.8 billion (US$137.6 billion). Existing-home transaction-service revenue increased 4.5% and new-home transaction-service revenue increased 3.8%, supported by higher transaction activity and improved productivity per connected store. These gains were outweighed at the consolidated revenue level by a 30.1% decline in home renovation and furnishing revenue and a 14.8% decline in home-rental-services revenue.
The margin performance was the central feature of the release. Total cost of revenues decreased 13.7%, faster than revenue, and gross profit increased 23.1% to RMB7.0 billion (US$1.0 billion). Gross margin increased to 28.6% from 21.9%. Management attributed the improvement to higher contribution margins across all major business lines, including existing home transaction services at 46.1%, new home transaction services at 28.8%, home renovation and furnishing at 39.6%, and home rentals at 15.3%.
Operating leverage extended below gross profit. Total operating expenses decreased 14.1% to RMB4.0 billion (US$0.6 billion), as sales and marketing expense declined 26.1%, research and development expense declined 13.4%, and general and administrative expense declined 2.1%. Income from operations rose to RMB3,026 million (US$446 million) from RMB1,059 million, while operating margin rose to 12.3% from 4.1%. Net income increased 100.8% to RMB2,624 million (US$387 million), and adjusted net income increased 74.9% to RMB3,185 million (US$469 million).
The mix shift merits attention. Existing-home platform, franchise and other value-added-services revenue increased 27.8%, while Lianjia-store commission revenue decreased 1.4%. In rentals, the growing use of the Carefree Rent net service-fee recognition model reduced reported revenue but increased the contribution margin. The Company also reported lower platform activity indicators, with active stores down 1.5%, active agents down 7.5%, and mobile MAU at 45.7 million compared with 48.7 million in the same period of 2025.
Liquidity remained substantial, with combined cash, cash equivalents, restricted cash and short-term investments of RMB56.0 billion (US$8.3 billion) as of June 30, 2026. Operating cash flow was RMB6,612,138 thousand (US$974,510 thousand) for the quarter, while investing cash outflow was RMB6,779,212 thousand (US$999,132 thousand). Capital allocation included approximately US$250 million of share repurchases during the quarter, including the Company's first Hong Kong repurchases. The release provided no forward financial guidance.
Management, verbatim
In the second quarter of 2026, we saw our operating foundation strengthen further, while our organizational transformation began to take deeper root in day-to-day operations.
Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike
In the second quarter, the proactive adjustments we made earlier to our cost structure yielded further results, enabling our resource allocation to better align with the current market environment.
Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike
Not in the filing
stated, not guessed- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Other forward guidance figures
- Previous-release outlook and comparisons against prior guidance
- Free cash flow
- Dividend declaration or payment
- Total debt
- Prior-quarter comparisons for reported metrics
- Percentage changes for income from operations, adjusted income from operations, adjusted EBITDA, and EPS
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.