BEKE

Image source: The Motley Fool. Friday, Aug. 21, 2026 at 8:00 a.m. ET Co-founder, Chairman, and Chief Executive Officer - Stanley Peng Executive Director and Chief Financial Officer - Tao Xu Investor Relations Director - Siting Li Siting Li: Ladies and gentlemen, thank you for standing by for KE Holdings' second quarter 2026 earnings conference call. I am Siting Li, IR director of KE Holdings. Please note that today's call, including the management's prepared remarks and Q&A session, will all be in Chinese. Simultaneous interpretation in English will be available on a separate line for the duration of the call. To access the call in Chinese, you will need to dial into the Chinese language line. At this time, all participants are in listen-only mode. Today's conference call is being recorded. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website. On today's call, we have Mr. Stanley Peng, our Co-founder, Chairman, and Chief Executive Officer, and Mr. Tao Xu, our Executive Director and CFO. Mr. Xu will provide an overview of our business update and financial performance. Mr. Peng will share more on the progress of our strategic transformation. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call as we will make forward-looking statements. Please note that both the earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. Please refer to the company's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this call are all in RMB. Certain statistical and other information relating to the industry in which the company is engaged to be mentioned in this call has been obtained from various publicly available official or unofficial sources. Neither the company nor any of its representatives has independently verified such data, which may involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information and estimates. For today's call, management will use Chinese as the main language. Please note that English translation is for convenience purposes only. In case of any discrepancy, management statements in their original language will prevail. Now, I will turn the call over to our CFO, Mr. Tao Xu. Tao Xu: Thank you, Siting. Hello, everyone. Welcome to our Q2 2026 earnings call. Let me begin with the key financial takeaways. Our total GTV returned to growth. Despite a modest year-over-year revenue decline, profits increased significantly, materially outperforming both GTV and revenue. In Q2, GTV increased 6.3% year-over-year, while revenue decreased 5.7% year-over-year. This revenue decline stemmed primarily from adjustments in our home renovation and furnishing business, and revenue recognition impacts from iterative product modeling in home renovation services. Non-GAAP net income grew 74.9% year-over-year to RMB 3.185 billion. Non-GAAP net margin reached 13%, up 6% year-over-year, a three-year high. Profit improvements were driven by a healthier cost structure, strict financial discipline, and a higher operating efficiency. Contribution margins across all core business lines improved year-over-year and quarter-over-quarter, driving the group's gross margin up 6.7 percentage points year-over-year to 28.6%. Simultaneously, GAAP operating expenses fell 14.1% year-over-year. This combination of gross margin expansion and a lower operating expenses fueled our profit growth. Next, I will review our segment financial performance. First, existing home transaction services. Q2 scale returned to growth and profitability improved significantly. GTV reached RMB 629.89 billion, up 8% year-over-year and 17.9% quarter-over-quarter. Revenue was RMB 7.02 billion, up 4.5% year-over-year and 14.5% quarter-over-quarter. GTV outpaced revenue growth year-over-year, primarily because non-Lianjia GTV, where platform service fees are recognized on a net base, accounted for a larger share. This quarter, non-Lianjia platform service revenue increased to 27.8% year-over-year and 29.8% quarter-over-quarter. With a stable network scale, we advanced and refined our operations to boost per store output, helping connected stores outperform the market in enhancing overall platform efficiency. Q2 contribution margin reached 46.1%, up 6.1% year-over-year, driven by lower fixed labor costs and a structural shift toward a higher-margin platform service revenue. It also rose 4.8% quarter-over-quarter, benefiting from operating leverage amid revenue recovery and further business mix improvements. Second, the new home business. Q2 scale remained stable year-over-year, while profitability continued to improve. GTV reached RMB 258.39 billion, up 1.2% year-over-year and 77.1% quarter-over-quarter. Revenue reached RMB 8.95 billion, up 3.8% year-over-year and 75.9% quarter-over-quarter. Despite a pressured market, we maintained a stable scale by collaborating on high-quality projects, improving customer conversion, and optimizing costs. Q2 contribution margin reached 28.8%, up 4.4 percentage points year-over-year, driven by cost structure optimization from refined operations. It also rose 3.1 percentage points quarter-over-quarter, benefiting from the same factors plus operating leverage from revenue growth. Third, home renovation and furnishing. Q2 revenue was RMB 3.19 billion, down 30.1% year-over-year, and up 36.4% quarter-over-quarter. The year-over-year decline reflects our proactive adjustments of inefficient customer acquisition channels and exits from cities with a weak unit economics. New home market pressures also dampened renovation demand. The quarter-over-quarter revenue increase reflects a seasonal business recovery. Q2 contribution margin was 39.6% up 7.5 percentage points year-over-year and 3.4 percentage points quarter-over-quarter, driven by lower material costs through centralized procurement and refined cost management. Fourth, home rental services. Q2 revenue was RMB 4.83 billion, down 14.8% year-over-year and 3.6% quarter-over-quarter. This stemmed from transitioning Carefree Rent to a lighter, lower-risk product model utilizing net basis revenue recognition. While this reduces reported accounting revenue, managed rental units continued rapid growth. By end of Q2, managed units exceeded 790,000, up approximately 34% year-over-year, with a net base product comprising over 50%. Q2 contribution margin reached 15.3%, up 6.9 percentage points year-over-year. This reflects a favorable product mix shift and operating improvement from lower labor, installation, and post-lease costs. Quarter-over-quarter contribution margin rose 0.5 percentage points, driven by continued increase in net-based products. Fifth, emerging and other businesses. Q2 revenue reached RMB 550 million, up 26.4% year-over-year and 70% quarter-over-quarter. Next, turning to costs, expenses, and profits. Q2 store-related costs were RMB 560 million, down 25.9% year-over-year and broadly stable quarter-over-quarter. The year-over-year decline reflects Lianjia's rent cost optimization and network adjustments. Total Q2 GAAP operating expenses were RMB 3.989 billion, down 14.1% year-over-year, driven by improved organizational efficiency, optimized marketing spend, and continued financial discipline. Operating expenses rose 21.3% quarter-over-quarter due to higher selling expenses from the home renovation seasonal recovery and bad debt provisions in new home business. Specifically, G&A expenses were RMB 2.04 billion, down 2.1% year-over-year. The 18.9% quarter-over-quarter increase resulted from a full bad debt provision of around RMB 280 million, following a prudent assessment of sinecure-related receivables and collateral value. Sales and marketing expenses were RMB 1.4 billion, down 26.1% year-over-year due to optimized sales personnel costs and refined marketing spend, but rose 29.6% quarter-over-quarter from seasonally higher home renovation selling expenses. R&D expenses were RMB 550 million, down 13.4% year-over-year due to lower labor and technical service costs, but up 11.4% quarter-over-quarter due to increased technical service fees. On the bottom line, Q2 GAAP operating profit reached RMB 3.026 billion, up 185.6% year-on-year. Non-GAAP operating profit was RMB 3.592 billion, up 123.6% year-over-year. GAAP operating profit rose 137.8% quarter-over-quarter with a 12.3% margin, up 8.3 percentage points year-over-year and 5.6 percentage points quarter-over-quarter. Non-GAAP operating profit grew 115.7% quarter-over-quarter with a 14.6% margin, up 8.5 percentage points year-over-year and 5.8 percentage points quarter-over-quarter. This year-on-year and quarter-over-quarter margin expansion was driven mainly by higher gross margins and lower operating expenses ratios. Q2 GAAP net income was RMB 2.624 billion, up 100.8% year-over-year and 109.1% quarter-over-quarter. Non-GAAP net income was RMB 3.185 billion, up 74.9% year-over-year, 97.6% quarter-over-quarter. Finally, turning to cash flow, balance sheet, and shareholder returns. Our Q2 net operating cash inflow was RMB 6.61 billion. Our new home accounts receivable turnover was around 39 days, down around 12 days year-over-year, reflecting effective risk management. Excluding customer deposits, our end of Q2 broad cash balance remained at around RMB 67.3 billion. This ample liquidity strengthened our risk resilience while supporting business development and shareholder returns. In Q2, we spent around $250 million on share repurchases, including our first buyback in the Hong Kong market. In first half, we spent around $460 million on repurchases, up around 14% year-over-year, representing around 2.4% of our year-end 2025 outstanding shares. Since launch of this share repurchase program in September 2022 through Q2 2026, we have repurchased around $2.99 billion in shares, representing around 14.8% of outstanding shares prior to the program start. In summary, Q2 profitability improvements reflect combined cost optimizations, operating enhancements, and a favorable business mix. Looking ahead, maintaining a solid balance sheet and ample liquidity will anchor our long-term growth. Across all core, new, and technical investments, we will enforce strict ROI discipline and take customer value, operating efficiency, and sustainable returns as our priority or key metrics. Ultimately, we will balance business development with the shareholder returns to consistently create long-term value. Next, I'll turn the call over to our Chairman and CEO, Mr. Stanley Peng. Please go ahead. Stanley Peng: Thank you. Investors and analysts, good evening. Last quarter, we discussed our shift toward a consumer-centric transformation. This quarter, I will talk about how the changes translate into our operations. In Q2, I observed two trends. Our operation foundation stabilized, and our organization truly mobilized. This foundation enables the long-term change. I will address five key questions. The first one, what changes as transformation enters daily operations? Second, does being consumer-centric mean bypassing agents? Thirdly, as AI advances, will agents become obsolete? Fourthly, how is AI applied in our business, and what is the result? Fifthly, how will we know we are on the right track moving forward? For the first question, what change as transformation enters daily operation? In this quarter, I spent a lot of time on the front line visiting stores, properties, construction sites, and discussing issues with clients, agents, and the store owners. The changes boil down to three areas. First, refined operation. We are shifting from the one-size-fits-all approach to the district-specific and the project-specific strategies. Rather than tracking a single citywide metric, we analyze specific districts or projects to tailor solutions and what is the solution for each community. For example, in a high-end community where clients view property across districts, our legacy geographic bound model failed, and we regrouped operational units based on actual clients' viewing path, assigning project experts for professional presentations and clients' experts to address specific family needs. With 600 projects driving half the city's volume, standardizing these professional judgments into a clear division of labor allow us to replicate this model, and other cities have begun similar operations explorations. Second is shifting the metrics. Scale and markets share still matter. But now we focus more on consistent agent transactions, rising agent efficiency, and income healthy store profitability, and the stable service quality. Leasing illustrates this perfectly. In 2025, we have at most 700 agents for leasing at the peak. The average agent efficiency fell below two transactions. Instead of adding headcounts, we divided the city into smaller blocks, rematching properties, clients, and agents based on familiarity and the capabilities. From April to July, average agent efficiency jumped from three to 5.6 transactions and a zero transaction ratio dropped from nearly 25% to under 10%. I think what matters is that the effective organization matters more than mere head count. Thirdly, mobilize the people. Managers have left meeting rooms for the front line. This quarter, managers personally sold stale listings, revisited dead leads, and accompanied agents to signing centers. My only requirement for manager is two, presence. You cannot learn to swim without getting in the water. In short, operationalizing transformation means refined operations, shifted metrics, and mobilized the people. This stems from a single approach, solving real consumer and frontline problem first, then reorganizing our people, resources, and platform. We are moving towards the changes and that they are now being seen in operational units. The second question is, does being consumer-centric mean bypassing agents? This assumes that if the platform moves closer to the consumer, it must take from the agents. Historically, we only split a single transaction commission, which is a zero-sum game. This is what we did in the past. But to break this equation, we must create more high-value tasks, not just redivide the same money. Consumers are changing. Good used to be a static property attribute. Today, I think good means a proper match. The variables determining goods expanded from one, two, three. The property, the family situation, and also the service provider. The service provider is now a vital variable, not just a conduit. As decisions become harder, tasks must be segmented. There are three reasons. First, the required knowledge exceeds one's personal capacity. For example, we needed to know the property's client circumstances, mortgage, and the renovations and furnishing business. This exceeds one's capacity. Second, building expertise require mutually exclusive path. You must either deeply root yourself in one project or follow a group of clients. You cannot do both simultaneously. That is the second reason. The third one is the most valuable action has shifted from providing options to confidently eliminating them. I think we are not only offering more choices to the consumers, instead, we needed to help them to filter. However, filtering does not mean transaction. As long as income relies solely on closings, true professionalism won't develop. I think professionalism must be financially viable. Therefore, we are untethering a role's income from closed deals, aligning them entirely with the buyers or seller. This AI-assisted role is the client manager. Previously, platform insight stopped once a lead reached an agent. The client manager ensures continuity. AI organizes data, while human assesses the client stage and needs, the agent receives fully profiled clients, and because the client managers are not paid per transaction, they remain purely objective. As I have mentioned, the managers are not paid per transaction. From May to July, this role handled over 50,000 leads, achieving a 7.4% lead to showing conversion rate, outperforming the broader market's 5%. The platform's mission is evolving from splitting commission to building a structure where every specialized skill is independently verified and compensated. ACN is shifting from a single listing workflow to a modular ecosystem, which includes consulting, showing, contracting, reporting, marketing materials, renovation, and leasing, and so on. Anyone creating incremental value is a service provider, and this is our definition, which is expanded. The main goal is enabling professional service providers to win in the long term. Being consumer-centric means transforming the single agent into a group of independently valuable specialized roles. Now we have the help of AI, which give us more impetus. The question, as AI advances, will agents become obsolete? This assumes agents only sells static information easily fetched by AI. However, technology reshuffles value. Some things depreciate while others become scarce. We should ask, what is depreciating and what is becoming more scarce? For the scarce part, what kind of progress the platform and the service provider can make? What is depreciating? Static information, bedrooms, price, and year built, and also the layout of the house. I think this kind of information cannot support the decision-making, and it is very easy to get. If we only transmit or we only transport information, we may have no more opportunities going forward. What is scarce? Dynamic, deep, inspiring insights. They cannot be fabricated. For example, the reason of selling, renovation potential, or local market assessment from seasoned managers, and how is the situation in the communities by the managers, and what is the closings and how is the deal most of the time. This information lives in people's minds, and the industry lacks the pipeline to capture and reuse it. Fundamentally, AI does not bear the consequence of poor decisions. AI may not take any accountabilities. As the cost of counting mistake rises, consumer needed to reduce uncertainty grows. Therefore, three things will happen. Firstly, the industry becomes more valuable by mitigating uncertainty. Secondly, creating value is hard, requiring deep data and deeper surveys. The third thing is those who transform in the direction become more valuable, including platforms and their managers. We do not need information. We are players. We need professional who dare to make judgments and take responsibility. The previous question is about the industry and the service provider. If we look around, if we look inward, then with those comes to the question for how is AI applied in our business and with what results? Actually, the business in itself is a production function. What is our input and what is output, and there is human capital and labor, capital and technology in a function. In today's AI, we should know the situation of AI in the industry. Is AI a sub-item or a direct variables? If it's a sub-item, it is an efficiency tool, or if it is a direct variable, it requires a totally right. We needed to change attitudes in the first. We now also open some of the foundational data, and we are lowering the threshold. We are worried about whether there will be disruption. We are thinking about how AI can be a new production factor rather than an opponent enables innovation. I think the consumers finally pay the value. I think the consumers need a better experience, and we need to solve the problems of consumers. The second is it changes management. In the recent 200 years, we have improvement in the science and management, and we need quantifiable data in the management. I think we all benefit from this methodology in KE Holdings and also Lianjia. We need standard, and we also need tools for the improvement. However, for the unquantifiable, they cannot be measured. This is also a big problem. But sometimes we may only focus on the numbers, and we find that sometimes we find that the numbers are too abstract, and the consumers now become the numbers and also become the number one in the standard. However, with the help of AI brings the unstructured data and I think the language and the numbers are totally different informations and signals. The granularity shifts from managing average to managing individual properties, clients, and agents. Previously, we manage the average, but now we have the computation powers and the knowledge, and we can have the tailored solution for each individuals. The third part is about AI changes subdivision of labor. We talk about the segmentation of the task, or in the company by AI. Now, we have these scenarios, which includes financial, human resource products, technology, and also from the stage, backstage, and the computation power. But now we have AI breaking down the threshold, and all of them are in the computation power of AI. Previously, the old division vanish and the new ones emerge. In our changing new home business, we shifted the labor between humans and AI. AI helps agents compare proposals using a dynamic knowledge base, allowing agents to focus on understanding clients. The agents could fine-tune their understanding of the clients. This produces both close deals and also reusable organizational capabilities. These only come from the front line. This disruption reshapes the organization. It concerns on four things. First is cost. AI lowers fixed costs and increases variable costs enabling rapid iteration. Whoever iterates fast, who creates more value. The next is the trial and error. In the past, it takes a lot of efforts. Right now, it takes a long path to evaluate, test, validate a proposal. The bigger the organization, the longer the chain is. Many people just hesitate. Right now, AI shifts innovation from heavy, slow investments into a high-frequency and low cost of probability gains. This allows us to trial and test multiple models at the same time, and we have a higher probability of winning out the game. Next is the frontline and the middle office. The frontline workers armed with AI can rapidly build and test solutions. The mid-office can then scale with them. Last but not least, managers. In the past, the bigger the organization, the lower the efficiency is. Right now, I actually talked to a lot of managers. They don't feel like a lot of a sense of value. Right now, AI flattens the organization. It's changing the roles, handling the reporting. We're forcing managers to stop being megaphones and start creating real business value. They're not just simply just presenting the numbers, they are actually creating real genuine value from the frontline. Because they're in the process of creating the value. Finally, the bottleneck shifts to humans. Look at KE. We have a long industrial process. AI can perfect a lot of the workflows. And those that with the human intervention becomes the bottleneck. There's this human and human interaction that AI cannot replace. Whether we can unite people together and provide them with the training, allow them to work efficiently with the AI. One is culture, the other is evolution. This is essentially a change we're talking about towards the whole industry. Now back to the very first question, whether AI is a direct variable. Because it changes who we serve, our judgments, our process, and our organization. This is a direct variable. That means we're not simply installing AI into the company. We are regrowing the company with AI. Looking into the next phase, how will we know we're on the right track moving forward? Now we must separate two things, where we need to place heavy bets from where we seek answers. I think there are three areas we're placing heavy bets, deep service, deep data, and a platform ecosystem. As information democratic side, deep data becomes scarce and the harder the decision-making becomes, and the deeper service becomes more valuable. As labor specializes, a platform is needed to orchestrate it. The one where we're still seeking answers, AI's final form and the ultimate structures of management and expertise remain uncertain. Directional matters require unwavering bets. How do we capture users' evolving needs? Management, of course, carries this value. So morphological matters require small investments, rapid testing, and cutting losses early. So why do we need to separate these things by certainty? Because again, we have already proven that directive matters requires unwavering bets, whereas the morphological matters requires more investment and rapid testing. Looking back at the past two quarters, we have approved in some areas that keeping investment in areas with low marginal returns is meaningless. The purely skill-driven model is dead. So we should stop those meaningless investments. Moving forward, we must validate four things. First, professionals. Facing AI, whether they can use it directly or indirectly to create a value. Do they have a new definition for what is professionalism and whether they are committed to this concept? Second, for managers, whether they can return to the frontline and produce high-quality judgments to recreate this sense of value. The third is the processes and judgments. With the deeper services, can they earn the trust from their customers? Whether they can earn a better recognition or trust. Number four, organizational capabilities. Can we turn a single success into a replicable capability? In such a discontinuous transformation, for many industries, they are pretty much faced with the same challenge. The way I see it, human conviction is the leading indicator. Numbers are the lagging indicator. Many of the management tend to hide their expertise within themselves. Without the open sharing, we cannot make that into replicable, successful model. Our core test is whether we can consistently execute consumer centricity and enable professionalisms to win. This must be embedded in our culture, in our workflows. We will measure the success across four pillars: customer, service provider, operations, and replicability, all four must co-choose. If you look at these five things, we have to redefine our playbook. Consumers are facing harder decisions to make, that is driving deeper specialization. The AI is depreciating role info while elevating true expertise and reorganizational internal work. Our direction is certain, deep service, deep data, and a platform ecosystem. Q2 is not the conclusion, it is just the beginning. Thank you. I will now turn the call to the analyst for Q&A. Siting Li: Thank you, Stanley. As a reminder, we only accept questions on the Chinese language line. If you would like to ask a question, please press star one. If you would like to cancel your request, please press the pound key. For the benefit of all participants on today's call, please limit yourself to one question, and if you have additional questions, you can re-enter the queue. The first question comes from Timothy Zhao from Goldman Sachs. Please go ahead. Timothy Zhao: Thank you, management, for taking my question. Congratulations on the strong Q2 results. My question is on the overall property market. It saw a diverging trend in volume and price in Q2, with some fluctuations in momentum in Q3. Given the uncertainty ahead, what controllable levers does the company have for Q3 and the full-year? Stanley Peng: Thank you, Timothy. In the first half, the existing home market showed a structural recovery in transactions with the prices bottoming. In Q2, this recovery became more evident, though the pace varied across cities and price segments. By city, transaction volumes recovered faster in tier one cities, where the first half prices also showed a greater sequential resilience. In Q2, year-over-year growth in registered existing home transactions in tier one cities outpaced other cities. According to Beike Research Institute, in the first half, tier one existing home prices rose cumulatively by 3.6% quarter-over-quarter, while national prices remained broadly stable year-over-year. Prices across all tiers have remained in an adjustment phase. For our platform, volume for lower priced homes grew faster than mid to high priced homes. However, the transaction mix across unit sizes remained stable, indicating housing demand hasn't broadly downgraded to smaller homes. Instead, this reflects a downward shift in transaction price bands as prices adjusted. Meanwhile, higher priced homes saw smaller year-over-year price decline, showing resilience in core upgrade-oriented and high-quality residences. In the new home market, overall Q2 volume remained under pressure, though projects in core cities with a strong product offering showed better support. Structurally, existing homes accounted for over 50% of the total national residential transaction area in the first half, becoming the market mainstay for housing demand. Overall, we see a structural transaction recovery while prices continue to bottom. Core cities and high-quality supply are more resilient, but the market remains polarized. With more property choices, customers are deciding cautiously, valuing professional judgment and transaction certainty. They need professional decision support, not just transaction matching or facilitation. This highlights our platform's accumulated service capability. Based on this, we will focus on three areas. First, capturing structural market opportunities to strengthen revenue resuming. We will allocate resources based on market performance across cities, customer groups, and property tax, reinforcing coverage in higher tier cities. Meanwhile, centered around content-driven engagement, precise matching, and professional execution will help customers make better decisions and convert genuine demand into transactions. Second, we'll continue to reinforce financial discipline and flexible resource allocation. Our leaner cost structure improves our ability to hedge against or fend off market volatility. If pressure persists. We will dynamically allocate resources, prioritizing our core professional service provider network over short-term profits. Even if the market improves, we will not return to extensive expansion. New investments must pass stage-gated ROI and service validations before scaling, ensuring transactions translates efficiently into profits and cash flow. Third, we'll also prioritize cash flow and a solid balance sheet. We'll strictly manage receivables and collections, control risk exposure, and limit non-essential investments to preserve flexibility. Therefore, our second half operations will not rely on market events. On the revenue side, better decision support will help us win more customers. On the financial side, our healthier cost structure will protect cash flow and our core capabilities in weak markets, and release greater operating leverage while markets improve. Thank you. Siting Li: Thank you. Our next question comes from John Lam from UBS. Please go ahead. Thank you, Mr. Tao, for your answering. John Lam: My question is that in Q2, the profit outpaced revenue growth significantly. Could the management break down the impact of business performance, operating efficiency, expense baselines, and if there is any one-off factors? For those improvements, how sustainable are they in the long run? Tao Xu: Thank you for your question. In Q2, the profit improvements were mainly driven by higher contribution margins across the core business and the lower operating expenses. For the core business contribution margins, they improved year-on-year and quarter-on-quarter, driving the group's gross margin up 6.7 percentage points year-on-year to 28.6%. At the same time, the GAAP operating expenses fell 14.1% year-on-year. There are three drivers. First, a lower cost and expenses baseline. Over the past years, we optimized Lianjia's store and agent structure by expanding management expense, consolidating resources, and reducing low productivity investment. This lowered the fixed labor cost and our break-even point. We also have a persistent baseline. Second, improved operating efficiency in housing transaction in new homes, generally coverage of high-quality projects and improving customer conversion, enhanced transaction resilience. We also have stable monetization and better channel efficiency drove profit growth. For the existing homes, focusing on the priority listings and refined operational support for connected stores significantly boosted connected store revenue and profit contribution. Thirdly, improved the unit economics and the business mix in new business. We have centralized the procurement and refined cost management, lowered the material cost ratios in home renovation. In rental services, the contribution margin improved due to a mix shift toward a net basis revenue product, alongside the generally operating improvements in labor installation and post-lease cost. Looking ahead to the next two quarters, under a neutral market assumption, the lower cost baseline will contribute to support profit. However, marketing channel incentives and certain frontline sales cost may fluctuate quarter-on-quarter due to revenue scale, mix, and also seasonality. We will not simply extrapolate a single quarter's profit, but focus on achieving balanced revenue and profit growth. If the market improves, incremental revenue will release stronger operating leverage from the lower baseline, creating greater profit upside. If pressure continues, our healthier cost structure reduces profit sensitivity to market volatility. Simply put, our current structure increases both upside potential and downside protection. In the long run, this optimization builds a healthier operating foundation. This is step one of our strategic transformation, optimizing resources allocation for current market. This is how we can cope with the uncertainty. Step two is directing limited resources toward initiatives that create customer value rather than just cutting cost. Ultimately, through workflows, evaluation incentives, and platform tools, we will embed efficient resource allocation into our daily organizational capacities to support sustainable growth. Siting Li: Thank you, Mr. Tao. The next question comes from Xiaodan Zhang from CICC. Please go ahead. Xiaodan Zhang: Good evening, Mr. Peng. Thank you for taking my question. Congratulations on your strong performance on Q2. The question is about existing homes in Q2. The existing home GTV increased 8% year-on-year, with contribution margin up 6.1 percentage point. How much of this stems from market recovery versus company operations? What metrics demonstrate this operating alpha? Thank you. Stanley Peng: Thank you, Xiaodan. I am happy to hear your voice. In short, while the market recovery provided a foundation for transaction volume, our existing home operating alpha did not come from expanding our network or rising prices. It came primarily from higher unit productivity within our stable network and a better conversion of platform service value into revenue. The simultaneous margin improvement confirms we did not sacrifice profitability for growth. Specifically, in Q2, the existing home transaction volume in our key cities recovered moderately, with sequential price civilization providing some external support. We have that external support. However, the year-on-year average transaction price remained in adjustment, offering low price tailwind. In this backdrop, our Q2 existing home GTV grew 8% year-on-year, and the transaction volume grew nearly 25% year-on-year, significantly outperforming the market. The more direct alpha source was higher unit productivity in our connected store network. In Q2, the connected store transaction volume grew nearly 30% year-on-year. Network scale did not expand. The active stores and agents remained broadly stable year-on-year, but average transaction per active connected store rose 26%. This shows that our network is shifting from expansion to high quality operation. As earlier connected stores mature and the platform collaboration deepens, that network volume translates directly into higher per store output and high efficiency. The second alpha was improved conversion of platform service value into revenue. Q2, non-Lianjia platform service revenue grew 27.8% year-on-year, outpacing non-Lianjia GTV. In a buyer's market, professional marketing, property presentation, and transaction facilitation create a clear value and are increasingly chosen by the homeowners. At the same time, the existing home contribution margin rose 6.1 percentage points year-on-year to 46.1%, confirming growth was not bought at the expense of profitability. Going ahead, we will monitor if connected store output and the platform service revenue conversion remain stable across different markets. Going forward, we will focus more on the output of the connected store and also whether the conversion remains stable across different markets to validate the sustainability of this alpha. Siting Li: Thank you, Mr. Peng. Our next question comes from Alvin from CLSA. Please go ahead. Alvin Huang: Thank you for taking my question. For the new home business, it is also amazing. What drove the Q2 new home alpha as the operation upgrade from traditional channel collaboration to integrated marketing and the project service? What capabilities sustainably create value? Also in the process, how do you balance growth margins, contribution margin, collection cycles, and developers' credit risk? Tao Xu: Thank you, Alvin. Good evening. In the first half of this year, the new home market remained under pressure. But in Q2, there was the improvement, with the year-on-year sales declining among top 100 developers narrowing to 9.3%. Demand and new supply increasingly concentrated in qualitative, high-quality projects and upgrade-oriented products. In this backdrop, our Q2 new home GTV grew by 1.2% year-on-year, driven mainly by improved coverage of high-quality projects and higher conversion efficiency. Firstly, we identified and collaborated with high quality and newly launched projects earlier, improving our coverage and performance in market-leading projects. Secondly, we have refined needs identification and project matching. We effectively allocated resources to high potential projects, boosting conversion rate. For the second half of this year, we assume the market will remain in adjustment, with cautious customers focusing on optimizing project mix and conversion to improve controllable operating efficiency. In the long run, our new home business aims to solve customer housing decisions, not just extend the service chain. So in a buyer's market, consumers face complex choice and multiple choice, and they need more than just access to the project. I think they need to understand the project suitability, product value, and the comparisons with the nearby options and alternatives in terms of price, layout, and also the amenities and whether their needs can be met. We are also evolving from the transaction channel to the customer-centric full-cycle project services. What we hope is that we want to be consumer-centric. We want to provide full-cycle services and integrating consumer insights into project research, repositioning, and sales, and also the decision-making to support the consumers. Consumer value drives this upgrade. Developer value follows from us serving consumers better. In this direction, we are also building three capacities. Firstly, we have earlier consumer insights and matching. We are using data from existing home transactions, searches, and viewings. We understand the demand to aid a project's positioning and marketing, reducing the mismatch between developer products and actual demands. Second, we translate product value into comparable decision metrics. We turn complex factors like location, layout, and natural light, and amenities into intuitive content. We also have the explanation and also other services to help the decision-making. For example, at Guangzhou Star River make levels, we have 3D community presentations and a layout analysis, which help consumers intuitively understand the products, improving on-site conversion. Thirdly, we have end-to-end project operating capacities based on customer feedback. Now we link customer analysis, content, and channel sales for a project, and we also have the timely adjustment and resources allocation. For example, for a project in Shangrao, the developer helped to gain local market knowledge. We reanalyzed target consumers. We adjusted the feedback from the market, and we adjusted the sales strategy and linked channel acquisition with on-site conversion, boosting the sales efficiency. But I think these capacities remain in early validation. We will tailor them per project, validating consumer value, operating results, and economics before scaling. In all of those projects, I think we need a sustainable validation, and we can have better replication as we expand our services and as our service scope deepens. We will manage payment terms and the developer credit risk even more prudently, avoiding the unreasonable risks just to expand the GTV. In the long term, the growth will be built on deeper consumer understanding and accurate matching, ultimately translating into high-quality revenue, healthy profitability, and strong cash collection, and we can have high-quality growth. Thank you. Siting Li: Thank you, Mr. Xu. The next question comes from Griffin from CITIC. Speaker 7: My question is on home renovation and Carefree Rent. Our Q2 home renovation revenue declined faster year-over-year, but contribution margins improved significantly. What drove this decline? Are earlier adjustments largely complete? When will revenue recover? How do you balance scale, contribution margin, and delivery quality? Carefree Rent profitability or margin significantly improves, and how do we ensure the sustainability? Tao Xu: Thank you, Griffin, for your question. The industry is undergoing a profound supply-demand restructuring as property adjustments feed into renovation. New home deliveries have dropped. Companies that previously focused on new homes are flooding into the existing home market, intensifying the competition. In such an environment, navigating the cycle depends on the operating quality, product competitiveness, and delivery quality, not just scale. The Q2 revenue decline stems from two factors. First, we proactively exited inefficient cities, stores, and acquisition channels over the past year. Second, overall demand remains pressured. Due to fewer new home deliveries, which directly weighs on the home renovation business. While competitors use price cuts and high channel incentives to fight for existing home customers. This proactive adjustment is now largely complete. We expect no further broad-based contractions this year. Despite pressured revenue, contribution margins improved significantly. Centralized procurement and supply chain optimization meaningfully lowered material costs. Service provider productivity per store also improved year-over-year, and store costs were optimized, indicating a healthier retained capacity and cost structure. Regarding revenue recovery, the contract value is a leading indicator. While reported revenue lags due to construction cycles, positively front-end metrics like July showroom visits improved quarter-over-quarter due to restored internal collaboration incentives, though it will take time to translate to revenue. Going forward, we will not trade profitably for scale. Long-term growth relies on delivery quality via frequent inspections. It also enhanced the user experience, product competitiveness, which will be achieved through tailored renovation packages, as well as integrated showrooms at transaction centers. We are pursuing quality products and healthy profitability as three pillars, a growth strategy that will drive our deep growth in revenue and profit. On Carefree Rent, the units under management gradually grow steadily to less than 790,000, up 34% year-over-year. Revenue was around RMB 4.83 billion, with a 15.3% contribution margin, up 6.9 percentage points year-over-year. The year-over-year revenue decline reflects Carefree Rent's iteration toward a lighter net-based revenue product. Profitability improved due to the structure shift and general operating optimizations in labor, installation, and post-lease costs. On top of this, whether we can sustain this profitability, I think that requires more than just acquiring more units. It requires managing an asset pool with a lower churn, fewer re-leases, and higher renewals. This way, the costs related to labor and channel will grow slower than actual revenue. Going forward, I think we will focus on three areas. First, stabilizing the units under management portfolio to reduce the re-leasing channel costs. As we see more units under management, more units are entering renewal or existing homes are going for re-leases. We are going to take a proactive lease management and deliver quality service. This will boost renewal and also boost retention. In Q2, the owner renewal rate hit 74%, up 4 percentage points, and the tenant renewal rate hit 56%, up 1 percentage point year-over-year. Second, improving efficiency to lower per-unit labor cost. Q2 managed units per asset manager rose 40% year-over-year to around 170. Going forward, we will pilot separating transaction tasks, such as sourcing and leasing, from management tasks, such as renewal and post-lease, to boost specialization and per-personnel efficiency. AI also can come into play. We can use AI planning to manage scale complexity by optimizing service areas, matching task scheduling, as well as many other refined operational measures. Third, improving incremental scale quality. We will increase asset light products to withstand rental fluctuation. Additionally, tailored to different cities, we are going to adopt differentiated product solutions that will achieve healthier unit economics. Most importantly, service quality underpins all of these improvements. So whether tenants or owner decides to renew, hinges on the reputation we purchase and also the channel costs. We are going to pay special attention to reputation and lower channel costs. We believe profitability is only sustainable when service experience renewal and efficiency forms a positive cycle. We are solidifying this foundation to translate our scale growth directly into profit growth. Thank you. Siting Li: Thank you, Mr. Xu. That concludes our Q&A session. Thank you once again for joining us today. If you have further questions, please feel free to contact Beike's IR team through the contact information provided on our website. That concludes today's call, and we look forward to speaking with you next time. Thank you and goodbye. Before you buy stock in KE Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and KE Holdings wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,189!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,956!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 21, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. KE Holdings (BEKE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in KE Holdings Inc. Sponsored ADR? Here are five stocks we like better. Profitability improved sharply despite lower revenue: Q2 revenue fell 5.7% year over year, but non-GAAP net income rose 74.9% to RMB3.185 billion, while gross margin expanded to 28.6% as operating expenses declined. Core housing businesses remained resilient: Existing-home GTV increased 8% and new-home GTV rose 1.2%, supported by higher productivity, better project selection and improved contribution margins. Business mix changes weighed on revenue but improved margins: Renovation and rental revenue declined as KE exited inefficient operations and shifted rentals toward lower-risk net-revenue products; management said adjustments are largely complete and highlighted AI-led, consumer-focused operational changes. 100% Upside in This Real Estate Stock, Institutions Buying In KE (NYSE:BEKE) reported second-quarter 2026 gains in gross margin and profit despite a year-over-year revenue decline, as the housing-services company cited cost controls, operating improvements and changes in business mix. Total gross transaction value, or GTV, rose 6.3% from a year earlier, while revenue fell 5.7%. Chief Financial Officer Tao Xu said the revenue decline was primarily tied to adjustments in the home renovation and furnishing business and revenue-recognition effects associated with iterative product models in renovation services. → Datavault AI Locks Down CyberCatch in $94M Security Rollup Non-GAAP net income increased 74.9% year over year to RMB3.185 billion, with non-GAAP net margin reaching 13%, up 6 percentage points from a year earlier and the company’s highest level in three years. GAAP net income rose 100.8% to RMB2.624 billion. KE’s gross margin increased 6.7 percentage points year over year to 28.6%, while GAAP operating expenses fell 14.1% to RMB3.989 billion. GAAP operating profit more than doubled, rising 185.6% to RMB3.026 billion. → Nasdaq’s 23-Hour Trading Push Could Turn Global Liquidity Into a Growth Engine Xu attributed the improvement to a healthier cost structure, strict financial discipline, lower fixed labor costs and increased operating efficiency. He said contribution margins improved year over year and sequentially across the company’s core business lines. Store-related costs declined 25.9% year over year to RMB560 million, reflecting rent-cost optimization and network adjustments at Lianjia. Sales and marketing expense fell 26.1% from a year earlier to RMB1.4 billion, while research and development expense decreased 13.4% to RMB550 million. → Tesla's Cybercab Launch Could Reshape Margins for Uber and Lyft On a sequential basis, operating expenses rose 21.3%, reflecting seasonal selling expenses in home renovation and provisions in the new-home business. General and administrative expenses included approximately RMB280 million in bad-debt provisions following what Xu called a prudent assessment of certain receivables and collateral values. Xu said the company does not intend to extrapolate one quarter’s profit performance, noting that marketing incentives and frontline sales costs can fluctuate with business mix, revenue scale and seasonality. Under a neutral market assumption, however, he said the lower cost baseline should continue to support profitability. Existing-home transaction-services GTV reached RMB629.89 billion, up 8% year over year, while revenue rose 4.5% to RMB7.02 billion. The segment’s contribution margin increased 6.1 percentage points to 46.1%. Chief Executive Officer Stanley Peng said the company’s existing-home performance was driven not by network expansion or rising prices, but by higher productivity within its stable connected-store network and better conversion of platform-service value into revenue. Connected-store transaction volume grew nearly 30% year over year, while average transactions per active connected store increased 26%, Peng said. Non-Lianjia platform-service revenue rose 27.8% year over year. Xu said GTV grew faster than revenue in the existing-home business because non-Lianjia GTV, for which platform-service fees are recognized on a net basis, represented a larger share of activity. In the new-home business, GTV rose 1.2% to RMB258.39 billion and revenue increased 3.8% to RMB8.95 billion. Contribution margin climbed 4.4 percentage points to 28.8%. Xu said KE maintained new-home scale through earlier collaboration on high-quality projects, better customer conversion and resource allocation toward projects with stronger potential. He added that the company would continue to manage payment terms and developer credit risk prudently rather than pursue GTV growth at the expense of collections or margins. Home renovation and furnishing revenue fell 30.1% year over year to RMB3.19 billion. The company said it had exited inefficient cities, stores and customer-acquisition channels, while lower new-home deliveries also weighed on demand. Still, contribution margin improved 7.5 percentage points to 39.6%, aided by centralized procurement, supply-chain optimization and lower material costs. Xu said the broad-based renovation adjustments are now largely complete and that the company does not expect further broad contractions this year. He noted that showroom visits improved sequentially in July, though construction cycles mean that contract activity may take time to translate into reported revenue. Home-rental-services revenue declined 14.8% to RMB4.83 billion as Carefree Rent shifted toward a lighter, lower-risk model that recognizes revenue on a net basis. Managed rental units exceeded 790,000 at the end of the quarter, up about 34% year over year, with net-basis products accounting for more than half of the portfolio. The rental segment’s contribution margin rose 6.9 percentage points to 15.3%. Xu cited the product mix shift as well as lower labor, installation and post-lease costs. He said owner renewal reached 74%, up 4 percentage points year over year, while tenant renewal reached 56%, up 1 percentage point. Peng said KE is moving from broad, citywide operating approaches toward more localized strategies tailored to specific districts, projects, properties and customer needs. He said management is increasingly focused on agent productivity, healthy store profitability and service quality rather than scale alone. Peng also described a more specialized service model in which roles are separated among client management, property presentation, consulting, contracting, renovation and leasing. From May through July, client managers handled more than 50,000 leads and achieved a 7.4% lead-to-showing conversion rate, compared with 5% for the broader market, he said. On artificial intelligence, Peng said the company views AI as a “direct variable” in reshaping customer service, internal processes and organizational design rather than simply an efficiency tool. KE is using AI to organize data, support agents’ project comparisons and enable more tailored management of individual properties, clients and agents. The company reported RMB6.61 billion in operating cash inflow for the quarter and said its broad cash balance, excluding customer deposits, was approximately RMB67.3 billion at quarter-end. KE spent about $250 million on share repurchases in the second quarter and about $460 million in the first half. KE Holdings Inc (NYSE: BEKE) is a technology-driven real estate services company that operates an integrated online and offline platform for housing transactions and related services in mainland China. The company provides consumer-facing property listing marketplaces alongside a broad network of offline brokerage offices and agents, aiming to facilitate sales, rentals and new-home transactions for individual and institutional clients. The company’s offerings span property listings for new and resale homes, rental listings, brokerage representation and transaction facilitation. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "KE Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. GTV: Total GTV increased 6.3% year-over-year in Q2. Revenue: Total revenue decreased 5.7% year-over-year in Q2. Non-GAAP Net Income: Grew 74.9% year-over-year to RMB3.185 billion. Non-GAAP Net Margin: Reached 13%, up 6 percentage points year-over-year, a three-year high. Gross Margin: Increased 6.7 percentage points year-over-year to 28.6%. GAAP Operating Expenses: Fell 14.1% year-over-year. Existing Home Transaction Services GTV: Reached RMB629.89 billion, up 8% year-over-year and 17.9% quarter-over-quarter. Existing Home Transaction Services Revenue: RMB7.02 billion, up 4.5% year-over-year and 14.5% quarter-over-quarter. Existing Home Transaction Services Contribution Margin: Reached 46.1%, up 6.1 percentage points year-over-year. New Home Business GTV: Reached RMB258.39 billion, up 1.2% year-over-year and 77.1% quarter-over-quarter. New Home Business Revenue: RMB8.95 billion, up 3.8% year-over-year and 75.9% quarter-over-quarter. New Home Business Contribution Margin: Reached 28.8%, up 4.4 percentage points year-over-year. Home Renovation and Furnishing Revenue: RMB3.19 billion, down 30.1% year-over-year and up 36.4% quarter-over-quarter. Home Renovation and Furnishing Contribution Margin: 39.6%, up 7.5 percentage points year-over-year. Home Rental Services Revenue: RMB4.83 billion, down 14.8% year-over-year and 3.6% quarter-over-quarter. Home Rental Services Contribution Margin: Reached 15.3%, up 6.9 percentage points year-over-year. Managed Rental Units: Exceeded 790,000 by end of Q2, up approximately 34% year-over-year. Emerging and Other Businesses Revenue: RMB550 million, up 26.4% year-over-year and 70% quarter-over-quarter. GAAP Operating Profit: RMB3.026 billion, up 185.6% year-over-year. Non-GAAP Operating Profit: RMB3.592 billion, up 123.6% year-over-year. GAAP Net Income: RMB2.624 billion, up 100.8% year-over-year and 109.1% quarter-over-quarter. Net Operating Cash Inflow: RMB6.61 billion in Q2. Share Repurchases: Spent around USD250 million in Q2 and around USD460 million in the first half of 2026. Warning! GuruFocus has detected 5 Warning Sign with BEKE. Is BEKE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Non-GAAP net income surged 74.9% year-over-year to RMB3.185 billion, with net margin hitting a three-year high of 13%. Existing home GTV grew 8% year-over-year, with connected store transaction volume up nearly 30% and average transactions per store rising 26%. Contribution margins improved across all core business lines, driving gross margin up 6.7 percentage points to 28.6%. Home rental services managed units exceeded 790,000, up 34% year-over-year, with contribution margin improving 6.9 percentage points. Shareholder returns remained strong, with $460 million in buybacks in the first half, representing 2.4% of outstanding shares. Total revenue declined 5.7% year-over-year, primarily due to adjustments in home renovation and furnishing and revenue recognition changes in home rental services. Home renovation and furnishing revenue fell 30.1% year-over-year due to proactive exits from inefficient channels and cities with weak unit economics. Home rental services revenue decreased 14.8% year-over-year due to the transition to a lighter, net-basis revenue model. New home market remains under pressure, with overall volume declining and a polarized market requiring cautious resource allocation. GAAP operating expenses rose 21.3% quarter-over-quarter, driven by higher selling expenses and a bad debt provision of around RMB280 million in the new home business. Q: In Q2, profit significantly outpaced revenue growth. Can management break down the impact of business performance, operating efficiency, and expense baselines, and are these improvements sustainable in the long run?A: Tao Xu (CFO): The profit improvements were mainly driven by higher contribution margins across core businesses and lower operating expenses. This stems from three drivers: a lower cost and expense baseline from optimizing Lianjia's store and agent structure; improved operating efficiency in housing transactions and new homes; and improved unit economics and business mix in new businesses like home renovation and rental services. Looking ahead, under a neutral market assumption, the lower cost baseline will support profits. Our current structure increases both upside potential and downside protection, as incremental revenue will release stronger operating leverage if the market improves, while a healthier cost structure reduces profit sensitivity to market volatility. Q: In Q2, existing home GTV increased 8% year-over-year with contribution margin up 6.1 percentage points. How much of this stems from market recovery versus company operations, and what metrics demonstrate this operating alpha?A: Tao Xu (CFO): While the market recovery provided a foundation, our existing home operating alpha came primarily from higher unit productivity within our stable network and better conversion of platform service value into revenue. Q2 existing home transaction volume grew nearly 25% year-over-year, significantly outperforming the market. The connected store transaction volume grew nearly 30% year-over-year, with average transactions per active connected store rising 26%, even as network scale remained stable. Additionally, non-Lianjia platform service revenue grew 27.8% year-over-year, outpacing GTV growth, as professional marketing and transaction facilitation services are increasingly valued by homeowners in a buyers' market. Q: What drove the Q2 new home business alpha as operations upgrade from traditional channel collaboration to integrated marketing and project service? How do you balance growth, margins, collection cycles, and developer credit risk?A: Tao Xu (CFO): Our Q2 new home GTV grew 1.2% year-over-year, driven by improved coverage of high-quality projects and higher conversion efficiency. We identified and collaborated with high-quality, newly launched projects earlier and refined needs identification and project matching. In the long run, we are evolving from a transaction channel to a customer-centric full-cycle project service, integrating consumer insights into project research, positioning, and sales. We are building three capacities: earlier consumer insights and matching, translating products into comparable decision metrics, and end-to-end project operating capacities. These capacities remain in early validation, and we will manage payment terms and developer credit risk even more prudently, avoiding unreasonable risks just to expand GTV. Q: Q2 home renovation revenue declined faster year-over-year, but contribution margins improved significantly. What drove this decline, are adjustments largely complete, and when will revenue recover? Also, how do you ensure the sustainability of carefree rent profitability?A: Tao Xu (CFO): The Q2 revenue decline stems from proactive exits from inefficient cities, stores, and acquisition channels, plus overall demand pressure from fewer new home deliveries. This proactive adjustment is now largely complete, and we expect no further broad-based contractions this year. Despite pressured revenue, contribution margins improved significantly due to centralized procurement and supply chain optimization. For carefree rent, profitability improved due to a structural shift toward lighter net-based products and genuine operating optimizations. Sustainability requires managing an asset pool with lower churn and higher renewals. In Q2, the owner renewal rate hit 74%, up 4 percentage points, and tenant renewal rate hit 56%, up 1 percentage point year-over-year. Management units per asset manager rose 40% year-over-year to around 170. Q: Given the diverging trend in volume and price in Q2 and uncertainty ahead, what controllable levers does the company have for Q3 and the full year?A: Tao Xu (CFO): We see a structural transaction recovery with prices continuing to bottom, but the market remains polarized. We will focus on three areas: capturing structural market opportunities to strengthen revenue recovery by allocating resources based on market performance across cities and customer groups; continuing to reinforce financial discipline and flexible resource allocation, prioritizing our core professional service provider network over short-term profits; and prioritizing cash flow and a solid balance sheet by strictly managing receivables and controlling risk exposure. Our second-half operations will not rely on market effects. On the revenue side, better decision support will help us win more customers, and on the financial side, our healthier cost structure will protect cash flow in weak markets and release greater operating leverage when markets improve. Q: As AI advances, will agents become obsolete?A: Stanley Peng (Chairman & CEO): Technology reshuffles value. What is depreciating is static information like bedrooms, price, and layout, which is easily fetched by AI. What is becoming scarce is dynamic, deep, inspiring insights that cannot be fabricated, such as the reason for selling, renovation potential, or local market assessments from seasoned managers. Fundamentally, AI does not bear the consequence of poor decisions and may not take accountability. As the cost of housing mistakes rises, consumers need to reduce uncertainty. Therefore, the industry becomes more valuable by mitigating uncertainty, creating value requires deep data and deeper service, and those who transform in this direction become more valuable. We need professionals who dare to make judgments and take responsibility. Q: How is AI applied in your business and with what results?A: Stanley Peng (Chairman & CEO): AI is a direct variable, not just a sub-item or efficiency tool. It changes who we serve, our judgments, our processes, and our organization. AI brings unstructured data, shifting granularity from managing averages to managing individual properties, clients, and agents. In our new home business, AI helps agents compare proposals using a dynamic knowledge base, allowing agents to focus on understanding clients. AI lowers fixed costs and increases variable costs, enabling rapid iteration. It shifts innovation from heavy, slow investments into high-frequency, low-cost probability gains, allowing us to trial multiple models simultaneously. AI also flattens the organization, changing managers' roles from handling reporting to creating real business value from the frontline. Q: Does being consumer-centric mean bypassing agents?A: Stanley Peng (Chairman & CEO): No. Historically, we only split a single transaction commission, which is a zero-sum game. To break this equation, we must create more high-value tasks, not just redivide the same money. As decisions become harder, tasks must be segmented because required knowledge exceeds one's personal capacity, building expertise requires mutually exclusive paths, and the most valuable action has shifted from providing options to confidently eliminating them. We are introducing a client manager role For the complete transcript of the earnings call, please refer to the full earnings call transcript.

BEIJING, Aug. 21, 2026 (GLOBE NEWSWIRE) -- KE Holdings Inc. (“Beike” or the “Company”) (NYSE: BEKE; HKEX: 2423), a leading integrated online and offline platform for housing transactions and services, today announced its unaudited financial results for the second quarter ended June 30, 2026. Business and Financial Highlights for the Second Quarter 2026 Gross transaction value (GTV)1 was RMB933.8 billion (US$137.6 billion), an increase of 6.3% year-over-year. GTV of existing home transactions was RMB629.9 billion (US$92.8 billion), an increase of 8.0% year-over-year. GTV of new home transactions was RMB258.4 billion (US$38.1 billion), an increase of 1.2% year-over-year. Net revenues were RMB24.5 billion (US$3.6 billion), a decrease of 5.7% year-over-year. Net income was RMB2,624 million (US$387 million), an increase of 100.8% year-over-year. Adjusted net income2 was RMB3,185 million (US$469 million), an increase of 74.9% year-over-year. Number of stores was 60,274 as of June 30, 2026, a 0.4% decrease from one year ago. Number of active stores3 was 57,803 as of June 30, 2026, a 1.5% decrease from one year ago. Number of agents was 540,634 as of June 30, 2026, a 3.1% decrease from one year ago. Number of active agents4 was 454,571 as of June 30, 2026, a 7.5% decrease from one year ago. Mobile monthly active users (MAU)5 averaged 45.7 million in the second quarter of 2026, compared to 48.7 million in the same period of 2025. Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, commented, “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. Starting with consumer needs and practical challenges encountered on the front lines, we are further enhancing collaboration among professional service providers, our platform and AI: professional service providers exercise judgment and take accountability; our platform facilitates collaboration and safeguards service delivery; and AI enables professional expertise to be codified into verifiable and reusable organizational capabilities. Looking ahead, we will remain committed to pursuing quality growth at scale and continue to assess the effectiveness of our transformation across consumer experience, professional service provider development, operating efficiency, unit economics, and replicability across cities and service scenarios, laying a stronger foundation for the Company’s long-term, sustainable growth.” Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike, added, “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. Building on this foundation, we continued to enhance operating efficiency with a focus on customer value. The scale of our housing transaction services recovered, while the Company’s profitability further improved. The contribution margins of all our major business lines increased both year-over-year and quarter-over-quarter, driving our gross margin up by 6.7 percentage points year-over-year to 28.6%. Meanwhile, operating expenses decreased by 14.1% year-over-year. Adjusted operating margin and adjusted net income margin reached 14.6% and 13.0%, respectively, both marking their highest levels in three years. In the second quarter, the Company repurchased approximately US$250 million of its shares and conducted share repurchases in Hong Kong for the first time. Looking ahead, building on our more efficient cost structure, we will further direct resources toward building capabilities that can create greater value for customers, continue to strengthen our operating resilience, and drive long-term sustainable growth.” Second Quarter 2026 Financial Results Net Revenues Net revenues decreased by 5.7% to RMB24.5 billion (US$3.6 billion) in the second quarter of 2026 from RMB26.0 billion in the same period of 2025, primarily attributable to decreased net revenues from home renovation and furnishing and home rental services, which was partially offset by the increase of net revenues from new home and existing home transaction services driven by improved productivity per connected store. Net revenues from existing home transaction services increased by 4.5% to RMB7.0 billion (US$1.0 billion) in the second quarter of 2026 from RMB6.7 billion in the same period of 2025, primarily due to an 8.0% increase in GTV of existing home transactions to RMB629.9 billion (US$92.8 billion) in the second quarter of 2026 from RMB583.5 billion in the same period of 2025.Among that, (i) commission revenue decreased by 1.4% to RMB5.3 billion (US$0.8 billion) in the second quarter of 2026 from RMB5.4 billion in the same period of 2025, primarily due to a 3.1% decrease in GTV of existing home transactions served by Lianjia stores to RMB206.6 billion (US$30.4 billion) in the second quarter of 2026 from RMB213.1 billion in the same period of 2025; and(ii) revenues derived from platform service, franchise service and other value-added services, which are mostly charged to connected stores and agents on the Company’s platform, increased by 27.8% to RMB1.7 billion (US$0.3 billion) in the second quarter of 2026 from RMB1.4 billion in the same period of 2025, primarily due to a 14.3% increase in the GTV of existing home transactions served by connected agents on the Company’s platform to RMB423.3 billion (US$62.4 billion) in the second quarter of 2026 from RMB370.4 billion in the same period of 2025 driven by improved productivity per connected store and the increased revenues from certain value-added services that were less directly linked to GTV. Net revenues from new home transaction services increased by 3.8% to RMB8.9 billion (US$1.3 billion) in the second quarter of 2026 from RMB8.6 billion in the same period of 2025, primarily due to deeper coverage of high-quality projects, which contributed to a 1.2% increase of GTV of new home transactions to RMB258.4 billion (US$38.1 billion) in the second quarter of 2026 from RMB255.4 billion in the same period of 2025. Of these, the GTV of new home transactions facilitated on Beike platform through connected agents, dedicated sales team with the expertise in new home transaction services and other sales channels increased by 0.9% to RMB210.2 billion (US$31.0 billion) in the second quarter of 2026 from RMB208.2 billion in the same period of 2025, while the GTV of new home transactions served by Lianjia brand increased by 2.3% to RMB48.2 billion (US$7.1 billion) in the second quarter of 2026 from RMB47.1 billion in the same period of 2025. Net revenues from home renovation and furnishing decreased by 30.1% to RMB3.2 billion (US$0.5 billion) in the second quarter of 2026 from RMB4.6 billion in the same period of 2025, as the Company proactively optimized its customer acquisition channel mix and moderated the pace of certain non-brokerage channels. Net revenues from home rental services decreased by 14.8% to RMB4.8 billion (US$0.7 billion) in the second quarter of 2026 from RMB5.7 billion in the same period of 2025, primarily due to the impact of an increasing proportion of new product offering within the Carefree Rent business. Under the new model, revenue is recognized based on net service fees derived from two sources: (1) commissions earned for facilitating the signing of lease agreements between homeowners and tenants; and (2) fees for lease term management services rendered throughout the lease period. The decrease was partially offset by the increase in the number of rental units under the Carefree Rent business. Net revenues from emerging and other services increased by 26.4% to RMB546 million (US$80 million) in the second quarter of 2026 from RMB432 million in the same period of 2025, primarily due to the increase of revenues from financial services. Contribution Margin The Company also reviews contribution margin to measure segment profitability. The Company defines contribution for each service line as the revenue less the direct compensation to its internal agents and sales professionals, split commission to connected agents and other sales channels for such services, property leasing costs and direct operating costs related to home rental services and direct costs for home renovation and furnishing. The Company defines contribution margin as a percentage of contribution bearing to revenue. Contribution margin for existing home transaction services. The contribution margin for existing home transaction services increased to 46.1% in the second quarter of 2026 from 39.9% in the same period of 2025, primarily attributable to a lower fixed compensation costs for Lianjia agents as a percentage of net revenues from existing home transaction services, and a higher proportion of revenues derived from platform service, franchise service and other value-added services with a higher margin than commission revenues. Contribution margin for new home transaction services. The contribution margin for new home transaction services increased to 28.8% in the second quarter of 2026 from 24.4% in the same period of 2025, primarily attributable to cost structure optimization driven by refined operations. Contribution margin for home renovation and furnishing. The contribution margin for home renovation and furnishing increased to 39.6% in the second quarter of 2026 from 32.1% in the same period of 2025, primarily attributable to enhanced supply chain capabilities, which helped reduce material costs. Contribution margin for home rental services. The contribution margin for home rentals increased to 15.3% in the second quarter of 2026 from 8.4% in the same period of 2025, primarily driven by the continuous increase in the proportion of high-margin new service offerings with revenues recognized under the net service fee method under the Carefree Rent business. In addition, improved operational efficiency further supported healthier profitability. Cost of Revenues Total cost of revenues decreased by 13.7% to RMB17.5 billion (US$2.6 billion) in the second quarter of 2026 from RMB20.3 billion in the same period of 2025. Commission – split. The Company’s cost of revenues for commissions to connected agents and other sales channels decreased by 2.3% to RMB5.8 billion (US$0.9 billion) in the second quarter of 2026 from RMB5.9 billion in the same period of 2025, primarily due to cost structure optimization driven by refined operations of new home transaction services with relatively flat year-over-year GTV of new home transactions facilitated on Beike platform through connected agents, dedicated sales team with the expertise in new home transaction services and other sales channels. Commission and compensation – internal. The Company’s cost of revenues for internal commission and compensation decreased by 4.8% to RMB4.5 billion (US$0.7 billion) in the second quarter of 2026 from RMB4.7 billion in the same period of 2025, primarily attributable to decreased fixed personnel costs. Cost of home renovation and furnishing. The Company’s cost of revenues for home renovation and furnishing was RMB1.9 billion (US$0.3 billion) in the second quarter of 2026, a decrease of 37.8% from RMB3.1 billion in the same period of 2025, primarily due to lower net revenues from home renovation and furnishing and increased contribution margin. Cost of home rental services. The Company’s cost of revenues for home rental services, which mainly consists of variable cost, decreased by 21.3% to RMB4.1 billion (US$0.6 billion) in the second quarter of 2026 from RMB5.2 billion in the same period of 2025, primarily due to the growing portion of offerings that recognize revenue under the net service fee method and contribute higher profit margins, as well as operational efficiency improvements. Cost related to stores. The Company’s cost related to stores decreased by 25.9% to RMB564 million (US$83 million) in the second quarter of 2026 from RMB762 million in the same period of 2025, primarily attributable to Lianjia store optimization. Other costs. The Company’s other costs increased by 8.7% to RMB640 million (US$94 million) in the second quarter of 2026 from RMB588 million in the same period of 2025, primarily attributable to increased share-based compensation costs. Gross Profit Gross profit increased by 23.1% to RMB7.0 billion (US$1.0 billion) in the second quarter of 2026 from RMB5.7 billion in the same period of 2025. Gross margin increased to 28.6% in the second quarter of 2026 from 21.9% in the same period of 2025, primarily due to higher contribution margins for all main segments. Income from Operations Total operating expenses decreased by 14.1% to RMB4.0 billion (US$0.6 billion) in the second quarter of 2026 from RMB4.6 billion in the same period of 2025, primarily due to the Company’s previous cost optimization initiatives. General and administrative expenses decreased by 2.1% to RMB2.0 billion (US$0.3 billion) in the second quarter of 2026 from RMB2.1 billion in the same period of 2025, primarily due to decreased personnel costs and overheads as a result of a decrease in headcount, partially offset by the mainly non-recurring provision for credit losses. Sales and marketing expenses decreased by 26.1% to RMB1.4 billion (US$0.2 billion) in the second quarter of 2026 from RMB1.9 billion in the same period of 2025, primarily due to lower personnel costs and reduced advertising and promotion expenses, as well as the decreased scale-driven variable selling expenses of home renovation and furnishing. Research and development expenses decreased by 13.4% to RMB549 million (US$81 million) in the second quarter of 2026 from RMB633 million in the same period of 2025, primarily due to decreased personnel costs as a result of a decrease in headcount of research and development personnel and decreased technical service fees. Income from operations was RMB3,026 million (US$446 million) in the second quarter of 2026, compared to income from operations of RMB1,059 million in the same period of 2025. Operating margin increased to 12.3% in the second quarter of 2026 from 4.1% in the same period of 2025, primarily due to increased gross profit margin and improved operating leverage. Adjusted income from operations6 was RMB3,592 million (US$529 million) in the second quarter of 2026, compared to RMB1,607 million in the same period of 2025. Adjusted operating margin7 was 14.6% in the second quarter of 2026, compared to 6.2% in the same period of 2025. Adjusted EBITDA8 was RMB4,175 million (US$615 million) in the second quarter of 2026, compared to RMB2,203 million in the same period of 2025. Net Income Net income increased by 100.8% to RMB2,624 million (US$387 million) in the second quarter of 2026 from RMB1,307 million in the same period of 2025. Adjusted net income increased by 74.9% to RMB3,185 million (US$469 million) in the second quarter of 2026, from RMB1,821 million in the same period of 2025. Net Income attributable to KE Holdings Inc.’s Ordinary Shareholders Net income attributable to KE Holdings Inc.’s ordinary shareholders was RMB2,623 million (US$387 million) in the second quarter of 2026, compared to RMB1,301 million in the same period of 2025. Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders9 was RMB3,184 million (US$469 million) in the second quarter of 2026, compared to RMB1,815 million in the same period of 2025. Net Income per ADS Basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders10 were RMB2.43 (US$0.36) and RMB2.35 (US$0.35) in the second quarter of 2026, respectively, compared to basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders of RMB1.16 and RMB1.11 in the same period of 2025, respectively. Adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders11 were RMB2.95 (US$0.43) and RMB2.85 (US$0.42) in the second quarter of 2026, respectively, compared to RMB1.62 and RMB1.55 in the same period of 2025, respectively. Cash, Cash Equivalents, Restricted Cash and Short-Term Investments As of June 30, 2026, the combined balance of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB56.0 billion (US$8.3 billion). Share Repurchase Program As previously disclosed, the Company established a share repurchase program in August 2022 and upsized and extended it in August 2023, August 2024 and August 2025, under which the Company may repurchase up to US$5 billion worth of its Class A ordinary shares and/or ADSs until August 31, 2028, subject to obtaining a general unconditional mandate for the repurchase from the shareholders of the Company at each of the next two annual general meetings to be held in the forthcoming years to continue its share repurchase after the expiry of the existing share repurchase mandate granted by the annual general meeting held on June 12, 2026. As of June 30, 2026, the Company had purchased, in aggregate, approximately 185.4 million ADSs (representing approximately 556.3 million Class A ordinary shares) on the New York Stock Exchange for a consideration of approximately US$2,967.7 million, as well as approximately 4.9 million Class A ordinary shares on the Hong Kong Stock Exchange for a consideration of approximately HK$201.5 million under this share repurchase program since its launch. Conference Call Information The Company will hold an earnings conference call at 8:00 A.M. U.S. Eastern Time on Friday, August 21, 2026 (8:00 P.M. Beijing/Hong Kong Time on Friday, August 21, 2026) to discuss the financial results. For participants who wish to join the conference call using dial-in numbers, please complete online registration using the link provided below at least 20 minutes prior to the scheduled call start time. Dial-in numbers, passcode and unique access PIN would be provided upon registering. Participant Online Registration: Chinese Line: https://s1.c-conf.com/diamondpass/10055963-m4ns1a.html English Simultaneous Interpretation Line (listen-only mode): https://s1.c-conf.com/diamondpass/10055964-md34ad.html A replay of the conference call will be accessible through August 28, 2026, by dialing the following numbers: A live and archived webcast of the conference call will also be available at the Company’s investor relations website at https://investors.ke.com. Exchange Rate This press release contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.7851 to US$1.00, the noon buying rate in effect on June 30, 2026, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial information contained in this earnings release. Non-GAAP Financial Measures The Company uses adjusted income (loss) from operations, adjusted net income (loss), adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders, adjusted operating margin, adjusted EBITDA and adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders, each a non-GAAP financial measure, in evaluating its operating results and formulating its business plan. Beike believes that these non-GAAP financial measures help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in its net income (loss). Beike also believes that these non-GAAP financial measures provide useful information about its results of operations, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in formulating its business plan. A limitation of using these non-GAAP financial measures is that these non-GAAP financial measures exclude share-based compensation expenses that have been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business. The Group recognized fair value loss and impairment in relation to its investments in Beihaojia business. As such impairment does not represent a non-recurring item, it has not been excluded when calculating Non‑GAAP financial measures. The presentation of these non-GAAP financial measures should not be considered in isolation or construed as an alternative to gross profit, net income (loss) or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review these non-GAAP financial measures and the reconciliation to the most directly comparable GAAP measures. The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. Beike encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Adjusted income (loss) from operations is defined as income (loss) from operations, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, and (iii) impairment of goodwill, intangible assets and other long-lived assets. Adjusted operating margin is defined as adjusted income (loss) from operations as a percentage of net revenues. Adjusted net income (loss) is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill, intangible assets and other long-lived assets, (v) impairment of investments, and (vi) tax effects of the above non-GAAP adjustments. Adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders is defined as net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill, intangible assets and other long-lived assets, (v) impairment of investments, (vi) tax effects of the above non-GAAP adjustments, and (vii) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Adjusted EBITDA is defined as net income (loss), excluding (i) income tax expense, (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) depreciation of property, plant and equipment, (v) interest income, net, (vi) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (vii) impairment of goodwill, intangible assets and other long-lived assets, and (viii) impairment of investments. Adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is defined as adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted. Please see the “Unaudited reconciliation of GAAP and non-GAAP results” included in this press release for a full reconciliation of each non-GAAP measure to its respective comparable GAAP measure. About KE Holdings Inc. KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services. The Company is a pioneer in building the infrastructure and standards to reinvent how service providers and customers efficiently navigate and complete housing transactions and services in China, ranging from existing and new home sales, home rentals, to home renovation and furnishing, and other services. The Company owns and operates Lianjia, China’s leading real estate brokerage brand in respect of service quality and an integral part of its Beike platform. With more than 24 years of operating experience through Lianjia since its inception in 2001, the Company believes the success and proven track record of Lianjia pave the way to build the infrastructure and standards and drive the rapid and sustainable growth of Beike. Safe Harbor Statement This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. Among other things, the quotations from management in this press release, as well as Beike’s strategic and operational plans, contain forward-looking statements. Beike may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about KE Holdings Inc.’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Beike’s goals and strategies; Beike’s future business development, financial condition and results of operations; expected changes in the Company’s revenues, costs or expenditures; Beike’s ability to empower services and facilitate transactions on Beike platform; competition in the industry in which Beike operates; relevant government policies and regulations relating to the industry; Beike’s ability to protect the Company’s systems and infrastructures from cyber-attacks; Beike’s dependence on the integrity of brokerage brands, stores and agents on the Company’s platform; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in KE Holdings Inc.’s filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and KE Holdings Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For more information, please visit: https://investors.ke.com. For investor and media inquiries, please contact: In China:KE Holdings Inc.Investor RelationsSiting LiE-mail: [email protected] Piacente Financial Communications Jenny CaiTel: +86-10-6508-0677E-mail: [email protected] In the United States:Piacente Financial Communications Brandi PiacenteTel: +1-212-481-2050E-mail: [email protected] Source: KE Holdings Inc. (1) Excluding (i) the Class A ordinary shares issued to the depositary bank for the bulk issuance of ADSs reserved for future issuance upon the exercise or vesting of awards granted under our share incentive plans, and (ii) the Class A ordinary shares repurchased but not cancelled, comprising both the ADSs repurchased on the NYSE and the Class A ordinary shares repurchased on the HKEX. _______________________________ 1 GTV for a given period is calculated as the total value of all transactions which the Company facilitated on the Company’s platform and evidenced by signed contracts as of the end of the period, including the value of the existing home transactions, new home transactions, home renovation and furnishing and emerging and other services (excluding home rental services), and including transactions that are contracted but pending closing at the end of the relevant period. For the avoidance of doubt, for transactions that failed to close afterwards, the corresponding GTV represented by these transactions will be deducted accordingly.2 Adjusted net income (loss) is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill, intangible assets and other long-lived assets, (v) impairment of investments, and (vi) tax effects of the above non-GAAP adjustments. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details. 3 Based on our accumulated operational experience, we have introduced the operating metrics of number of active stores and number of active agents on our platform, which can better reflect the operational activeness of stores and agents on our platform.“Active stores” as of a given date is defined as stores on our platform excluding the stores which (i) have not facilitated any housing transaction during the preceding 60 days, (ii) do not have any agent who has engaged in any critical steps in housing transactions (including but not limited to introducing new properties, attracting new customers and conducting property showings) during the preceding seven days, or (iii) have not been visited by any agent during the preceding 14 days. 4 “Active agents” as of a given date is defined as agents on our platform excluding the agents who (i) delivered notice to leave but have not yet completed the exit procedures, (ii) have not engaged in any critical steps in housing transactions (including but not limited to introducing new properties, attracting new customers and conducting property showings) during the preceding 30 days, or (iii) have not participated in facilitating any housing transaction during the preceding three months. 5 “Mobile monthly active users” or “mobile MAU” are to the sum of (i) the number of accounts that have accessed our platform through our Beike or Lianjia mobile app (with duplication eliminated) at least once during a month, and (ii) the number of Weixin users that have accessed our platform through our Weixin mini Programs at least once during a month. Average mobile MAU for any period is calculated by dividing (i) the sum of the Company’s mobile MAUs for each month of such period, by (ii) the number of months in such period.6 Adjusted income (loss) from operations is a non-GAAP financial measure, which is defined as income (loss) from operations, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, and (iii) impairment of goodwill, intangible assets and other long-lived assets. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details. 7 Adjusted operating margin is adjusted income (loss) from operations as a percentage of net revenues.8 Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) income tax expense, (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) depreciation of property, plant and equipment, (v) interest income, net, (vi) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (vii) impairment of goodwill, intangible assets and other long-lived assets, and (viii) impairment of investments. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details. 9 Adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial measure, which is defined as net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill, intangible assets and other long-lived assets, (v) impairment of investments, (vi) tax effects of the above non-GAAP adjustments, and (vii) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details. 10 ADS refers to American Depositary Share. Each ADS represents three Class A ordinary shares of the Company. Net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is net income (loss) attributable to ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating net income (loss) per ADS, basic and diluted.11 Adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial measure, which is defined as adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

BEIJING, Aug. 11, 2026 (GLOBE NEWSWIRE) -- KE Holdings Inc. (“Beike” or the “Company”) (NYSE: BEKE; HKEX: 2423), a leading integrated online and offline platform for housing transactions and services, today announced that it will report its unaudited financial results for the second quarter 2026 before the U.S. market opens on Friday, August 21, 2026. The Company’s management will hold an earnings conference call at 8:00 A.M. Eastern Time on Friday, August 21, 2026 (8:00 P.M. Beijing Time on Friday, August 21, 2026). For participants who wish to join the conference using dial-in numbers, please complete online registration using the link provided below at least 20 minutes prior to the scheduled call start time. Dial-in numbers, passcode and unique access PIN would be provided upon registering. Participant Online Registration: Chinese Line: https://s1.c-conf.com/diamondpass/10055963-m4ns1a.html English Simultaneous Interpretation Line (listen-only mode): https://s1.c-conf.com/diamondpass/10055964-md34ad.html A replay of the conference call will be accessible through August 28, 2026, by dialing the following numbers: A live and archived webcast of the conference call will also be available at the Company’s investor relations website at https://investors.ke.com. About KE Holdings Inc. KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services. The Company is a pioneer in building infrastructure and standards to reinvent how service providers and customers efficiently navigate and complete housing transactions and services in China, ranging from existing and new home sales, home rentals, to home renovation and furnishing, and other services. The Company owns and operates Lianjia, China’s leading real estate brokerage brand and an integral part of its Beike platform. With more than 24 years of operating experience through Lianjia since its inception in 2001, the Company believes the success and proven track record of Lianjia pave the way for it to build its infrastructure and standards and drive the rapid and sustainable growth of Beike. For more information, please visit: https://investors.ke.com. For investor and media inquiries, please contact: In China:KE Holdings Inc.Investor RelationsSiting LiE-mail: [email protected] Piacente Financial Communications Jenny CaiTel: +86-10-6508-0677E-mail: [email protected] In the United States:Piacente Financial Communications Brandi PiacenteTel: +1-212-481-2050E-mail: [email protected]

BEIJING, June 12, 2026 (GLOBE NEWSWIRE) -- KE Holdings Inc. (“Beike” or the “Company”) (NYSE: BEKE; HKEX: 2423), a leading integrated online and offline platform for housing transactions and services, today announced that each of the proposed resolutions submitted for shareholders’ approval (the “Proposed Resolutions”) as set forth in the notice of annual general meeting dated April 24, 2026 has been adopted at the meeting held in Beijing, China today. After the adoption of the Proposed Resolutions, all corporate authorizations and actions contemplated thereunder were approved, including, among other things, that (i) the Company’s existing memorandum and articles of association are amended and restated by their deletion in their entirety and by the substitution in their place of the seventh amended and restated memorandum and articles of association as set out in the circular of the Company dated April 24, 2026, (ii) each of Mr. Wangang Xu and Mr. Tao Xu is re-elected as an executive director of the Company and Mr. Hansong Zhu is re-elected as an independent non-executive director of the Company, and (iii) the directors of the Company are granted a general unconditional mandate to allot, issue and deal with additional Class A ordinary shares or equivalents and a general unconditional mandate to repurchase the Company’s own shares, respectively, on the terms and in the periods as set out in the notice of annual general meeting. About KE Holdings Inc. KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services. The Company is a pioneer in building infrastructure and standards to reinvent how service providers and customers efficiently navigate and complete housing transactions and services in China, ranging from existing and new home sales, home rentals, to home renovation and furnishing, and other services. The Company owns and operates Lianjia, China’s leading real estate brokerage brand and an integral part of its Beike platform. With more than 24 years of operating experience through Lianjia since its inception in 2001, the Company believes the success and proven track record of Lianjia pave the way for it to build its infrastructure and standards and drive the rapid and sustainable growth of Beike. Safe Harbor Statement This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. Beike may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about KE Holdings Inc.’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Beike’s goals and strategies; Beike’s future business development, financial condition and results of operations; expected changes in the Company’s revenues, costs or expenditures; Beike’s ability to empower services and facilitate transactions on Beike’s platform; competition in the industry in which Beike operates; relevant government policies and regulations relating to the industry; Beike’s ability to protect the Company’s systems and infrastructures from cyber-attacks; Beike’s dependence on the integrity of brokerage brands, stores and agents on the Company’s platform; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in KE Holdings Inc.’s filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and KE Holdings Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: In China:KE Holdings Inc.Investor RelationsSiting LiE-mail: [email protected] Piacente Financial CommunicationsJenny CaiTel: +86-10-6508-0677E-mail: [email protected] In the United States:Piacente Financial CommunicationsBrandi PiacenteTel: +1-212-481-2050E-mail: [email protected] Source: KE Holdings Inc.

Interested in KE Holdings Inc. Sponsored ADR? Here are five stocks we like better. KE Holdings posted a sharp profit rebound in Q1 even as revenue and transaction volume fell, with non-GAAP operating profit up 45.1% and GAAP net income up 46.7% year over year. Management credited cost cuts, operating efficiency, and better margins rather than a cyclical recovery. Margins improved significantly across the business, led by existing-home services, where contribution margin hit 41.3% and gross margin rose to 24.1%. Operating expenses dropped 22.3% year over year, showing aggressive cost control. The company highlighted a strategic shift toward higher-quality housing decisions supported by AI and more standardized services, while maintaining confidence in full-year margin expansion. Management also said it continued share buybacks and held about CNY 65.6 billion in cash excluding customer deposits. 100% Upside in This Real Estate Stock, Institutions Buying In KE (NYSE:BEKE) reported a sharp improvement in first-quarter profitability despite lower transaction volume and revenue, as management said cost controls, operating efficiency gains and higher contribution margins across core businesses helped offset a softer year-over-year property market comparison. On the company’s first-quarter 2026 earnings call, Tao Xu, executive director and chief financial officer, said non-GAAP operating profit rose 45.1% year-over-year to CNY 1.67 billion, while non-GAAP operating margin reached 8.8%, the highest level in seven quarters. GAAP net income increased 46.7% year-over-year to CNY 1.26 billion, and non-GAAP net income rose 15.7% to CNY 1.61 billion. → Why Applied Optoelectronics Stock May Be Near a Turning Point Xu said the quarter reflected “structural improvement rather than a cyclical one,” citing cost structure optimization in 2025, more refined management and technology-driven productivity improvements. Total gross transaction value, or GTV, declined 15.6% year-over-year to CNY 711.2 billion, and revenue fell 19% to CNY 18.9 billion, reflecting a high base in the prior-year period. KE’s gross margin expanded to 24.1%, up 3.5 percentage points from a year earlier and 2.7 percentage points sequentially. Xu attributed the year-over-year improvement to higher contribution from rental services, a more favorable mix toward existing-home transactions and improved contribution margin in existing-home services. → The Pentagon's AI Pivot Supercharges Defense Stocks Total GAAP operating expenses fell 22.3% year-over-year to CNY 3.3 billion, which Xu said was the lowest level in nearly three years. Sales and marketing expenses declined 39%, general and administrative expenses fell 8.6%, and research and development expenses decreased 15.6%. Xu said the company spent approximately $195 million on share repurchases during the quarter, which he said reflected both shareholder returns and management’s confidence in the company’s medium- to long-term development. He also said KE’s broader cash balances, excluding customer deposits, stood at approximately CNY 65.6 billion. → Ackman and Berkshire Are Betting Against Each Other on AI Existing-home transaction services remained KE’s largest business line by GTV. First-quarter GTV in the segment was CNY 534.4 billion, down 7.9% year-over-year but up 10.9% quarter-over-quarter. Revenue from existing-home transaction services was CNY 6.1 billion, down 10.7% year-over-year and up 12.7% sequentially. Xu said the segment’s contribution margin reached 41.3%, the highest level in seven quarters, driven by lower fixed labor costs following optimization of Lianjia’s agent and store scale and improved organizational efficiency. Stanley Peng, co-founder, chairman and chief executive officer, said the existing-home market saw a “noticeable spring rebound” after Chinese New Year, with improved transaction momentum, buyer decisiveness and seller sentiment. He cautioned, however, that the market remains in a phase of structural adjustment and confidence rebuilding. In response to a question from Jefferies analyst Thomas Chong, Xu said the latest recovery differed from prior rebounds because it was not solely driven by short-term policy stimulus, because prices had shown signs of stabilization, and because seller expectations and supply mix were improving. He said existing-home transactions on KE’s platform grew 12% year-over-year in the first quarter, while March set a new monthly record, up 21% year-over-year. New-home transaction services saw a steeper year-over-year decline. GTV fell 37.2% to CNY 145.9 billion, while revenue declined 37% to CNY 5.1 billion. Xu said the segment’s contribution margin rose 2.3 percentage points year-over-year to 25.7%, supported by cost structure optimization and refined operations. Home renovation and furnishing revenue fell 20.6% year-over-year to CNY 2.3 billion. Xu said the decline reflected KE’s proactive exit from low-quality customer acquisition channels and cities with weaker unit economics. The segment’s contribution margin improved 3.6 percentage points year-over-year to 36.2%, helped by material cost savings through centralized purchasing and tender-based local procurement, as well as improved labor assignment efficiency. Peng said the company is prioritizing profitability, standardization, product capabilities and delivery quality in the renovation business rather than near-term scale. In response to Goldman Sachs analyst Timothy Zhao, Peng said revenue had been affected by business adjustments, reduced exposure in certain cities and weaker market demand, but added that underlying capabilities were improving. Home rental services revenue slipped 1.5% year-over-year to CNY 5 billion. Xu said the decline was tied to the continued shift of Carefree Rent toward a lighter, lower-risk product model, with more units recognized on a net revenue basis. Managed rental units exceeded 740,000 at the end of the quarter, up about 47% year-over-year. The rental services contribution margin reached 14.8%, marking the sixth consecutive quarter of sequential improvement. Peng used much of the call to describe KE’s strategic and organizational restructuring, saying the housing services industry is moving away from a listings-driven model toward one centered on decision support. He said consumers increasingly need help evaluating whether to buy, where to buy, how to price a property and how to make trade-offs involving school districts, commute, comfort and asset quality. “KE Holdings is evolving from a platform that organizes transactions into one that supports higher quality housing decisions,” Peng said through the call’s English interpretation. Peng said the company is sending managers back to the front lines, improving agent specialization and turning non-standard services into more standardized products. He cited “Commit to Sell,” a Beijing pilot designed to help sellers set reserve prices online and allow buyers to bid with deposits, as one example of a product intended to improve price discovery and transaction efficiency. Peng said Commit to Sell remains in an early pilot stage with a small sample size, but early signs show shorter transaction cycles and high homeowner satisfaction. He also said KE is testing other services such as community open days to concentrate buyer interest. Management repeatedly emphasized artificial intelligence as part of KE’s operating transformation. Peng said AI can commoditize basic information sorting while amplifying the value of service providers who help customers make complex housing decisions. He said an internal application-building platform for frontline employees had covered more than 7,100 employees by the end of April, with more than 4,400 applications seeing actual traffic and total visits exceeding 4.12 million. Xu said KE is maintaining a disciplined approach to AI investment, scaling spending in core business models and foundational AI capabilities while reallocating resources away from lower-return projects. Asked about the sustainability of margins, Xu said the first-quarter improvement was not driven by a single business or one-off factor, but by operating quality, resource allocation, cost structure and unit economics. He said quarterly margins may fluctuate seasonally, but management remains confident in year-over-year margin improvement for the full year. KE Holdings Inc (NYSE: BEKE) is a technology-driven real estate services company that operates an integrated online and offline platform for housing transactions and related services in mainland China. The company provides consumer-facing property listing marketplaces alongside a broad network of offline brokerage offices and agents, aiming to facilitate sales, rentals and new-home transactions for individual and institutional clients. The company’s offerings span property listings for new and resale homes, rental listings, brokerage representation and transaction facilitation. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "KE Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

BEIJING, May 19, 2026 (GLOBE NEWSWIRE) -- KE Holdings Inc. (“Beike” or the “Company”) (NYSE: BEKE; HKEX: 2423), a leading integrated online and offline platform for housing transactions and services, today announced its unaudited financial results for the first quarter ended March 31, 2026. Business and Financial Highlights for the First Quarter 2026 Gross transaction value (GTV)1 was RMB711.7 billion (US$103.2 billion), a decrease of 15.6% year-over-year. GTV of existing home transactions was RMB534.4 billion (US$77.5 billion), a decrease of 7.9% year-over-year. GTV of new home transactions was RMB145.9 billion (US$21.2 billion), a decrease of 37.2% year-over-year. Net revenues were RMB18.9 billion (US$2.7 billion), a decrease of 19.0% year-over-year. Net income was RMB1,255 million (US$182 million), an increase of 46.7% year-over-year. Adjusted net income2 was RMB1,611 million (US$234 million), an increase of 15.7% year-over-year. Number of stores was 60,383 as of March 31, 2026, a 6.2% increase from one year ago. Number of active stores3 was 57,666 as of March 31, 2026, a 4.4% increase from one year ago. Number of agents was 526,945 as of March 31, 2026, a 4.2% decrease from one year ago. Number of active agents4 was 453,438 as of March 31, 2026, a 7.6% decrease from one year ago. Mobile monthly active users (MAU)5 averaged 42.7 million in the first quarter of 2026, compared to 44.5 million in the same period of 2025. Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, commented, “In the first quarter of 2026, we observed positive marginal changes in the real estate market. We also continued to advance efficiency-driven growth, with significant improvements in both operating quality and profitability. Our performance in this quarter reflected our ongoing efforts to enhance resource allocation, organizational efficiency and service quality, and also laid a foundation for the Company to further transition from scale-driven growth to efficiency-driven growth, and from transaction matching to decision-making services. Looking ahead, we will continue to focus on helping consumers make higher-quality residential decisions, enhance the professional capabilities of service providers, organizational efficiency and AI-enabled capabilities, and strive to achieve higher-quality and more sustainable development.” Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike, added, “In the first quarter of 2026, the Company’s operating quality improved significantly year-over-year. A series of initiatives we have undertaken around resource allocation efficiency, cost structure and unit economics translated into healthier profitability. In the first quarter, both our gross margin and adjusted operating margin reached their highest levels in the past seven quarters. In the first quarter, we further enhanced shareholder returns by repurchasing approximately US$195 million of our shares, representing a year-over-year increase of approximately 40%. Looking ahead, we will continue to focus on improving customer experience and service provider efficiency, optimizing resource allocation, and further strengthening the Company’s operating efficiency and resilience, while creating long-term, sustainable value for consumers, service providers and shareholders.” First Quarter 2026 Financial Results Net Revenues Net revenues decreased by 19.0% to RMB18.9 billion (US$2.7 billion) in the first quarter of 2026 from RMB23.3 billion in the same period of 2025, primarily attributable to the high base of net revenues from new home and existing home transaction services. Net revenues from existing home transaction services decreased by 10.7% to RMB6.1 billion (US$0.9 billion) in the first quarter of 2026 from RMB6.9 billion in the same period of 2025, primarily due to a high base effect for GTV of existing home transactions, which decreased by 7.9% to RMB534.4 billion (US$77.5 billion) in the first quarter of 2026 from RMB580.3 billion in the same period of 2025.Among that, (i) commission revenue decreased by 14.1% to RMB4.8 billion (US$0.7 billion) in the first quarter of 2026 from RMB5.6 billion in the same period of 2025, primarily due to a 14.8% decrease in GTV of existing home transactions served by Lianjia stores to RMB188.7 billion (US$27.4 billion) in the first quarter of 2026 from RMB221.4 billion in the same period of 2025; and(ii) revenues derived from platform service, franchise service and other value-added services, which are mostly charged to connected stores and agents on the Company’s platform, increased by 3.8% to RMB1,340 million (US$194 million) in the first quarter of 2026 from RMB1,291 million in the same period of 2025, primarily due to the increased revenues from certain value-added services which were less directly linked to GTV. This was partially offset by a 3.7% decrease in the GTV of existing home transactions served by connected agents on the Company’s platform to RMB345.7 billion (US$50.1 billion) in the first quarter of 2026 from RMB358.9 billion in the same period of 2025. Net revenues from new home transaction services decreased by 37.0% to RMB5.1 billion (US$0.7 billion) in the first quarter of 2026 from RMB8.1 billion in the same period of 2025, primarily due to a high base effect for GTV of new home transactions in the same period of 2025, which decreased by 37.2% to RMB145.9 billion (US$21.2 billion) in the first quarter of 2026 from RMB232.2 billion in the same period of 2025. Of these, the GTV of new home transactions facilitated on Beike platform through connected agents, dedicated sales team with the expertise in new home transaction services and other sales channels decreased by 37.5% to RMB119.9 billion (US$17.4 billion) in the first quarter of 2026 from RMB192.0 billion in the same period of 2025, while the GTV of new home transactions served by Lianjia brand decreased by 35.4% to RMB26.0 billion (US$3.8 billion) in the first quarter of 2026 from RMB40.3 billion in the same period of 2025. Net revenues from home renovation and furnishing decreased by 20.6% to RMB2.3 billion (US$0.3 billion) in the first quarter of 2026 from RMB2.9 billion in the same period of 2025, as the Company proactively optimized the channel mix in customer acquisition and moderated pace of certain non-brokerage channels. Net revenues from home rental services decreased by 1.5% to RMB5.0 billion (US$0.7 billion) in the first quarter of 2026 from RMB5.1 billion in the same period of 2025, primarily due to the impact of an increasing proportion of new service offerings within the Carefree Rent business. Under the new model, revenue is recognized based on net service fees derived from two sources: (1) commissions earned for facilitating the signing of lease agreements between homeowners and tenants; and (2) fees for lease term management services rendered throughout the lease period. The decrease was partially offset by the increase in the number of rental units under the Carefree Rent model. Net revenues from emerging and other services decreased by 8.1% to RMB321 million (US$47 million) in the first quarter of 2026 from RMB350 million in the same period of 2025, primarily due to the decrease of revenues from ancillary services. Cost of Revenues Total cost of revenues decreased by 22.6% to RMB14.3 billion (US$2.1 billion) in the first quarter of 2026 from RMB18.5 billion in the same period of 2025. Commission – split. The Company’s cost of revenues for commissions to connected agents and other sales channels decreased by 38.2% to RMB3.5 billion (US$0.5 billion) in the first quarter of 2026 from RMB5.7 billion in the same period of 2025, primarily due to the decrease in GTV of new home transactions facilitated through connected agents and other sales channels. Commission and compensation – internal. The Company’s cost of revenues for internal commission and compensation decreased by 17.9% to RMB4.0 billion (US$0.6 billion) in the first quarter of 2026 from RMB4.8 billion in the same period of 2025, primarily attributable to the decrease in commission of Lianjia agents, consistent with the decreased GTV of existing and new home transactions they served, as well as the decreased fixed personnel costs due to the Company's disciplined headcount control. Cost of home renovation and furnishing. The Company’s cost of revenues for home renovation and furnishing was RMB1.5 billion (US$0.2 billion) in the first quarter of 2026, a decrease of 24.9% from RMB2.0 billion in the same period of 2025, primarily due to lower net revenues from home renovation and furnishing. Meanwhile, enhanced supply chain capabilities helped reduce material costs and improve the contribution margin of the home renovation and furnishing business. Cost of home rental services. The Company’s cost of revenues for home rental services, which mainly consists of variable cost, decreased by 10.0% to RMB4.3 billion (US$0.6 billion) in the first quarter of 2026 from RMB4.7 billion in the same period of 2025. Despite relatively stable year-over-year revenue performance for home rental services in the first quarter of 2026, the segment achieved a notable uplift in contribution margin, driven primarily by the continuous increase in the proportion of high-margin new service offerings under Carefree Rent business. In addition, improved operational efficiency, further optimized the overall cost structure and supported healthier profitability. Cost related to stores. The Company’s cost related to stores decreased by 20.3% to RMB0.6 billion (US$0.1 billion) in the first quarter of 2026 from RMB0.7 billion in the same period of 2025, primarily attributable to Lianjia store optimization. Other costs. The Company’s other costs decreased by 5.0% to RMB520 million (US$75 million) in the first quarter of 2026 from RMB547 million in the same period of 2025, primarily attributable to the decreased taxes and surcharges, which was in line with the trend in net revenues. Gross Profit Gross profit decreased by 5.4% to RMB4.6 billion (US$0.7 billion) in the first quarter of 2026 from RMB4.8 billion in the same period of 2025. Gross margin increased to 24.1% in the first quarter of 2026 from 20.7% in the same period of 2025, primarily due to a) higher contribution of net revenues from existing home transaction services, which historically carried higher contribution margins than other revenue streams, b) a higher contribution margin of existing home transaction services, primarily attributable to the decreased fixed personnel costs driven by cost optimization, and c) the improved contribution margin of home rental services. Income from Operations Total operating expenses decreased by 22.3% to RMB3.3 billion (US$0.5 billion) in the first quarter of 2026 from RMB4.2 billion in the same period of 2025, primarily due to the Company’s cost optimization initiatives. General and administrative expenses decreased by 8.6% to RMB1.7 billion (US$0.2 billion) in the first quarter of 2026 from RMB1.9 billion in the same period of 2025, primarily due to the decrease in share-based compensation expenses. Sales and marketing expenses decreased by 39.0% to RMB1.1 billion (US$0.2 billion) in the first quarter of 2026 from RMB1.8 billion in the same period of 2025, primarily due to the Company’s cost optimization initiatives, including lower personnel costs and reduced advertising and promotion expenses, as well as the decreased scale-driven variable selling expenses of home renovation and furnishing. Research and development expenses decreased by 15.6% to RMB493 million (US$71 million) in the first quarter of 2026 from RMB584 million in the same period of 2025, primarily due to the Company’s cost optimization initiatives. Income from operations was RMB1,273 million (US$185 million) in the first quarter of 2026, compared to income from operations of RMB591 million in the same period of 2025. Operating margin increased to 6.7% in the first quarter of 2026 from 2.5% in the same period of 2025, primarily due to the increased gross profit margin and improved operating leverage. Adjusted income from operations6 was RMB1,665 million (US$241 million) in the first quarter of 2026, compared to RMB1,148 million in the same period of 2025. Adjusted operating margin7 was 8.8% in the first quarter of 2026, compared to 4.9% in the same period of 2025. Adjusted EBITDA8 was RMB2,235 million (US$324 million) in the first quarter of 2026, compared to RMB1,842 million in the same period of 2025. Net Income Net income increased by 46.7% to RMB1,255 million (US$182 million) in the first quarter of 2026 from RMB855 million in the same period of 2025. Adjusted net income increased by 15.7% to RMB1,611 million (US$234 million) in the first quarter of 2026, from RMB1,393 million in the same period of 2025. Net Income attributable to KE Holdings Inc.’s Ordinary Shareholders Net income attributable to KE Holdings Inc.’s ordinary shareholders was RMB1,255 million (US$182 million) in the first quarter of 2026, compared to RMB856 million in the same period of 2025. Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders9 was RMB1,612 million (US$234 million) in the first quarter of 2026, compared to RMB1,393 million in the same period of 2025. Net Income per ADS Basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders10 were RMB1.15 (US$0.17) and RMB1.11 (US$0.16) in the first quarter of 2026, respectively, compared to basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders of RMB0.76 and RMB0.73 in the same period of 2025, respectively. Adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders11 were RMB1.48 (US$0.21) and RMB1.42 (US$0.20) in the first quarter of 2026, respectively, compared to RMB1.24 and RMB1.19 in the same period of 2025, respectively. Cash, Cash Equivalents, Restricted Cash and Short-Term Investments As of March 31, 2026, the combined balance of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB53.9 billion (US$7.8 billion). Share Repurchase Program As previously disclosed, the Company established a share repurchase program in August 2022 and upsized and extended it in August 2023, August 2024 and August 2025, under which the Company may purchase up to US$5 billion of its Class A ordinary shares and/or ADSs until August 31, 2028, subject to obtaining general unconditional mandate for the repurchase from the shareholders of the Company at each of the next three annual general meetings to be held in the forthcoming years to continue its share repurchase after the expiry of the existing share repurchase mandate granted by the annual general meeting held on June 27, 2025. As of March 31, 2026, the Company in aggregate has purchased approximately 171.2 million ADSs (representing approximately 513.6 million Class A ordinary shares) on the New York Stock Exchange with a total consideration of approximately US$2,741.7 million under this share repurchase program since its launch. Conference Call Information The Company will hold an earnings conference call at 8:00 A.M. U.S. Eastern Time on Tuesday, May 19, 2026 (8:00 P.M. Beijing/Hong Kong Time on Tuesday, May 19, 2026) to discuss the financial results. For participants who wish to join the conference call using dial-in numbers, please complete online registration using the link provided below at least 20 minutes prior to the scheduled call start time. Dial-in numbers, passcode and unique access PIN would be provided upon registering. Participant Online Registration: Chinese Line: https://s1.c-conf.com/diamondpass/10054239-fn5s21.html English Simultaneous Interpretation Line (listen-only mode): https://s1.c-conf.com/diamondpass/10054238-3nd54a.html A replay of the conference call will be accessible through May 26, 2026, by dialing the following numbers: A live and archived webcast of the conference call will also be available at the Company’s investor relations website at https://investors.ke.com. Exchange Rate This press release contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.8980 to US$1.00, the noon buying rate in effect on March 31, 2026, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial information contained in this earnings release. Non-GAAP Financial Measures The Company uses adjusted income (loss) from operations, adjusted net income (loss), adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders, adjusted operating margin, adjusted EBITDA and adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders, each a non-GAAP financial measure, in evaluating its operating results and formulating its business plan. Beike believes that these non-GAAP financial measures help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in its net income (loss). Beike also believes that these non-GAAP financial measures provide useful information about its results of operations, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in formulating its business plan. A limitation of using these non-GAAP financial measures is that these non-GAAP financial measures exclude share-based compensation expenses that have been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business. The Group recognized fair value loss and impairment in relation to its investments in Beihaojia business. As such impairment does not represent a non-recurring item, it has not been excluded when calculating Non‑GAAP financial measures. The presentation of these non-GAAP financial measures should not be considered in isolation or construed as an alternative to gross profit, net income (loss) or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review these non-GAAP financial measures and the reconciliation to the most directly comparable GAAP measures. The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. Beike encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Adjusted income (loss) from operations is defined as income (loss) from operations, excluding (i) share-based compensation expenses, and (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement. Adjusted operating margin is defined as adjusted income (loss) from operations as a percentage of net revenues. Adjusted net income (loss) is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of investments, and (v) tax effects of the above non-GAAP adjustments. Adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders is defined as net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of investments, (v) tax effects of the above non-GAAP adjustments, and (vi) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Adjusted EBITDA is defined as net income (loss), excluding (i) income tax expense, (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) depreciation of property, plant and equipment, (v) interest income, net, (vi) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, and (vii) impairment of investments. Adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is defined as adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted. Please see the “Unaudited reconciliation of GAAP and non-GAAP results” included in this press release for a full reconciliation of each non-GAAP measure to its respective comparable GAAP measure. About KE Holdings Inc. KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services. The Company is a pioneer in building infrastructure and standards to reinvent how service providers and customers efficiently navigate and complete housing transactions and services in China, ranging from existing and new home sales, home rentals, to home renovation and furnishing, and other services. The Company owns and operates Lianjia, China’s leading real estate brokerage brand and an integral part of its Beike platform. With more than 24 years of operating experience through Lianjia since its inception in 2001, the Company believes the success and proven track record of Lianjia pave the way for it to build its infrastructure and standards and drive the rapid and sustainable growth of Beike. Safe Harbor Statement This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. Among other things, the quotations from management in this press release, as well as Beike’s strategic and operational plans, contain forward-looking statements. Beike may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about KE Holdings Inc.’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Beike’s goals and strategies; Beike’s future business development, financial condition and results of operations; expected changes in the Company’s revenues, costs or expenditures; Beike’s ability to empower services and facilitate transactions on Beike platform; competition in the industry in which Beike operates; relevant government policies and regulations relating to the industry; Beike’s ability to protect the Company’s systems and infrastructures from cyber-attacks; Beike’s dependence on the integrity of brokerage brands, stores and agents on the Company’s platform; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in KE Holdings Inc.’s filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and KE Holdings Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For more information, please visit: https://investors.ke.com. For investor and media inquiries, please contact: In China:KE Holdings Inc.Investor RelationsSiting LiE-mail: [email protected] Piacente Financial Communications Jenny CaiTel: +86-10-6508-0677E-mail: [email protected] In the United States:Piacente Financial Communications Brandi PiacenteTel: +1-212-481-2050E-mail: [email protected] Source: KE Holdings Inc. (1) Excluding the Class A ordinary shares registered in the name of the depositary bank for future issuance of ADSs upon the exercise or vesting of awards granted under our share incentive plans and the Class A ordinary shares repurchased but not cancelled in the form of ADSs. _______________________________ 1 GTV for a given period is calculated as the total value of all transactions which the Company facilitated on the Company’s platform and evidenced by signed contracts as of the end of the period, including the value of the existing home transactions, new home transactions, home renovation and furnishing and emerging and other services (excluding home rental services), and including transactions that are contracted but pending closing at the end of the relevant period. For the avoidance of doubt, for transactions that failed to close afterwards, the corresponding GTV represented by these transactions will be deducted accordingly.2 Adjusted net income (loss) is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of investments, and (v) tax effects of the above non-GAAP adjustments. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.3 Based on our accumulated operational experience, we have introduced the operating metrics of number of active stores and number of active agents on our platform, which can better reflect the operational activeness of stores and agents on our platform.“Active stores” as of a given date is defined as stores on our platform excluding the stores which (i) have not facilitated any housing transaction during the preceding 60 days, (ii) do not have any agent who has engaged in any critical steps in housing transactions (including but not limited to introducing new properties, attracting new customers and conducting property showings) during the preceding seven days, or (iii) have not been visited by any agent during the preceding 14 days. The number of active stores was 55,210 as of March 31, 2025.4 “Active agents” as of a given date is defined as agents on our platform excluding the agents who (i) delivered notice to leave but have not yet completed the exit procedures, (ii) have not engaged in any critical steps in housing transactions (including but not limited to introducing new properties, attracting new customers and conducting property showings) during the preceding 30 days, or (iii) have not participated in facilitating any housing transaction during the preceding three months. The number of active agents was 490,862 as of March 31, 2025.5 “Mobile monthly active users” or “mobile MAU” are to the sum of (i) the number of accounts that have accessed our platform through our Beike or Lianjia mobile app (with duplication eliminated) at least once during a month, and (ii) the number of Weixin users that have accessed our platform through our Weixin Mini Programs at least once during a month. Average mobile MAU for any period is calculated by dividing (i) the sum of the Company’s mobile MAUs for each month of such period, by (ii) the number of months in such period.6 Adjusted income (loss) from operations is a non-GAAP financial measure, which is defined as income (loss) from operations, excluding (i) share-based compensation expenses, and (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.7 Adjusted operating margin is adjusted income (loss) from operations as a percentage of net revenues.8 Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) income tax expense, (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) depreciation of property, plant and equipment, (v) interest income, net, (vi) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, and (vii) impairment of investments. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.9 Adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial measure, which is defined as net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of investments, (v) tax effects of the above non-GAAP adjustments, and (vi) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.10 ADS refers to American Depositary Share. Each ADS represents three Class A ordinary shares of the Company. Net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is net income (loss) attributable to ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating net income (loss) per ADS, basic and diluted.11 Adjusted net income (loss) per ADS attributable to KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial measure, which is defined as adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted. Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.

This article first appeared on GuruFocus. Non-GAAP Operating Profit: RMB1.67 billion, up 45.1% year-over-year and 416.2% quarter-over-quarter. Non-GAAP Operating Margin: 8.8%, highest level in the past seven quarters. Revenue: RMB18.9 billion, down 19% year-over-year. Gross Margin: 24.1%, up 3.5 percentage points year-over-year. GAAP Net Income: RMB1.26 billion, up 46.7% year-over-year. Non-GAAP Net Income: RMB1.61 billion, up 15.7% year-over-year. GTV (Gross Transaction Value): RMB711.2 billion, down RMB15.6 billion year-over-year. Existing Home Transaction Services Revenue: RMB6.1 billion, down 10.7% year-over-year. New Home Business Revenue: RMB5.1 billion, down 37% year-over-year. Home Renovation and Furnishing Services Revenue: RMB2.3 billion, down 20.6% year-over-year. Home Rental Services Revenue: RMB5 billion, down 1.5% year-over-year. Store Costs: RMB571 million, down 20.3% year-over-year. Operating Expenses: RMB3.3 billion, lowest level in nearly three years, down 2.3% year-over-year. Share Repurchases: Approximately $195 million spent during the quarter, up 40% year-over-year. Cash Balance: Approximately RMB65.6 billion, excluding customer deposits. Warning! GuruFocus has detected 6 Warning Sign with BEKE. Is BEKE fairly valued? Test your thesis with our free DCF calculator. Release Date: May 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. KE Holdings Inc (NYSE:BEKE) reported a significant increase in non-GAAP operating profit, reaching RMB1.67 billion, up 45.1% year-over-year and 416.2% quarter-over-quarter. The company's non-GAAP operating margins stood at 8.8%, the highest level in the past seven quarters, indicating improved operational efficiency. Despite a year-on-year decline in revenue, the contribution margin of all core business lines improved, reflecting successful cost structure optimization. KE Holdings Inc (NYSE:BEKE) spent around $195 million on share repurchases, representing ongoing returns to shareholders and confidence in the company's sustainable development. The company's gross margin reached 24.1%, up 3.5 percentage points year-over-year, driven by gross margin expansion and improved operating efficiency. KE Holdings Inc (NYSE:BEKE) experienced a year-over-year decline in gross GTV and revenue due to a high base from the real estate market in the same period last year. Revenue from existing home transaction services decreased by 10.7% year-over-year, reflecting challenges in maintaining business scale. The new home business saw a significant decline, with Q1 GTV down 37.2% year-over-year and revenue down 37% year-over-year. Home renovation and furnishing services revenue declined by 20.6% year-over-year, attributed to a proactive exit from low-quality customer acquisition channels. The company recorded a net operating cash outflow of $1.5 billion in Q1, mainly due to timing factors related to the payment of accrued employee compensation from the previous year. Q: We noticed that the existing home market saw a spring rally in Q1. What were the main drivers, and how does it compare to previous trends? Is this trend sustainable? A: Compared to previous rebounds, this recovery is more resilient. It reflects genuine demand being released as price corrections have lowered the price barrier to homeownership. Prices are stabilizing, and seller expectations and supply mix are improving. Existing home transactions on our platform grew 12% year-over-year in Q1, with March setting a new all-time monthly record. The government's clear signal to stabilize the housing market, reduced transaction costs, and lower entry barriers for homebuyers are driving this shift. We expect existing home transaction volumes to continue growing year-over-year in Q2. Q: Could you share an update on the Commit to Sell program in Beijing? Are there any cases that validate its impact, and can it effectively improve transaction efficiency? A: Commit to Sell is a pilot product designed to help both buyers and sellers reduce negotiation back-and-forth. Sellers set a reserve price online, and buyers place bids with deposits. Early signs are encouraging, with shortened transaction cycles and high homeowner satisfaction. However, the sample size is still small. This program is part of our broader strategic transformation to help sellers make better decisions and improve closing certainty. We are piloting other services and will continue tracking key metrics to validate their impact. Q: What reasons are driving the decline in the home renovation and furnishing business, and what are the major KPIs you're focusing on? A: The decline is due to shutting down traditional business parts, narrowing operations in some cities, and a declining market trend. Our focus is on optimizing the business model for healthy and sustainable profitability, personalized offerings, and higher quality fulfillment. We are improving product capabilities, standardization, and delivery processes. Despite near-term revenue impacts, we see improvements in underlying capabilities, and we believe revenue can stabilize and return to quality growth. Q: How does the management assess the sustainability of current margin levels, and is there further room for improvement? A: Our profitability improved significantly in Q1, with gross margin reaching 24.1% and non-GAAP operating margin at 8.8%. This improvement is due to proactive optimizations across operating quality, resource allocation, and cost structure. Contribution margins improved across all core businesses. We expect further upside from continued gains in productivity and resource conversion efficiency. While quarterly margins may fluctuate, we are confident in year-on-year margin improvement for the full year. Q: What are the key areas of focus for the home renovation and furnishing business this year? A: We are focusing on improving product capabilities, standardization, and construction fulfillment and delivery. Our approach involves a two-dimensional product matrix to address different customer needs, combining modules within a clear product framework. We are professionalizing project managers and moving to a model-based platform for key workers. We are also developing BIM design tools for full process digitalization. These efforts aim to improve efficiency, control costs, and enhance unit economics. For the complete transcript of the earnings call, please refer to the full earnings call transcript.