Bay Street News

KE Holdings Inc. Announces Second Quarter 2024 Unaudited Financial Results and Upsizing and Extension of Share Repurchase Program

BEIJING, Aug. 12, 2024 (GLOBE NEWSWIRE) — KE Holdings Inc. (“Beike” or the “Company”) (NYSE: BEKE and 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, 2024 and upsizing and extension of the share repurchase program.

Business and Financial Highlights for the Second Quarter 2024

Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, commented, “In the second quarter of this year, our series of operational enhancements and scientific management measures supported us in achieving high-quality results that notably exceeded the market performance. We further expanded our broader and deeper connections with service providers and new home projects on the supply side in our housing transaction services. Through a series of training programs and refined operational measures, we enhanced the operational efficiency of the supply side, optimizing the platform ecosystem. This year, our home renovation and furnishing and home rental services focused on capability building, achieving significant business growth and continuous operational improvement. We are also exploring ways to deepen our community engagement by increasing the density of services and innovating the operational models of community stores and service providers, with the aim of better understanding and meeting consumer needs.”

“The growth potential for our home transaction services remains significant, and the business models and capabilities of our home renovation and furnishing and home rental services have also been validated. Looking ahead, our core goal is to build an organization that can continuously progress from one success to the next. Our next step is to achieve sustained growth by driving a positive cycle of scale, quality, and efficiency,” concluded Mr. Peng.

Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike, added, “In the second quarter of 2024, a series of easing policies were implemented, leading to an improvement in the transaction volume of the existing housing market, while the year-on-year decline in the new home market sequentially narrowed each month although still remaining subdued overall. Amid gradually improving market sentiment, we continuously deepened our operations and achieved excellent performance in the second quarter.

For the second quarter, our total net revenues reached RMB23.4 billion, up 19.9% year-over-year. The contribution margin from existing home transaction services rose substantially both year-over-year and quarter-over-quarter, and the monetization capability of our new home transaction services has been further strengthened. Non-housing transaction services grew rapidly, with revenues from our home renovation and furnishing business and home rental services reaching history highs. Our continuous improvement in operational efficiency generated a gross margin of 27.9%, ticking up from 27.4% in the same period last year. Our net income in the second quarter saw a 46.2% year-over-year increase, reaching RMB1,900 million, and our adjusted net income grew by 13.9% to RMB2,693 million, showcasing improved profitability.

With our robust cash reserves, we continued with shareholder returns through active share buybacks. As of the date of this press release, we have in aggregate repurchased shares with a total consideration of approximately US$480 million in 2024, which accounted for approximately 2.75% of the Company’s total issued shares at the end of 2023. We have also upsized and extended the existing share repurchase program to August 31, 2025, with the repurchase authorization being increased from US$2 billion to US$3 billion. Moving forward, we will continue to reward the shareholders who have been staying alongside our growth and share the value created by the Company with them.”

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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. The number of active stores was 41,076 as of June 30, 2023.
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 409,054 as of June 30, 2023.
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.


Second Quarter 2024 Financial Results

Net Revenues

Net revenues increased by 19.9% to RMB23.4 billion (US$3.2 billion) in the second quarter of 2024 from RMB19.5 billion in the same period of 2023, primarily attributable to the increase of net revenues from existing home transaction services and the expansion of home renovation and furnishing and home rental business, partially offset by the decrease of net revenues from new home transaction services. Total GTV increased by 7.5% to RMB839.0 billion (US$115.5 billion) in the second quarter of 2024 from RMB780.6 billion in the same period of 2023, primarily attributable to the recovery of existing home transaction market driven by the release of supportive policies in the second quarter of 2024, partially offset by the sluggish new home transactions market due to weaknesses in both supply and demand in the second quarter of 2024.

Cost of Revenues

Total cost of revenues increased by 19.2% to RMB16.9 billion (US$2.3 billion) in the second quarter of 2024 from RMB14.1 billion in the same period of 2023.

Gross Profit

Gross profit increased by 22.0% to RMB6.5 billion (US$0.9 billion) in the second quarter of 2024 from RMB5.3 billion in the same period of 2023. Gross margin was 27.9% in the second quarter of 2024, compared to 27.4% in the same period of 2023 primarily due to a) a higher contribution margin for home renovation and furnishing primarily attributable to enhanced supply chain capabilities and continuous refined management; b) a higher contribution margin for home rental services primarily due to improved operational efficiency; c) a lower costs related to stores as percentage of net revenues; and d) partially offset by a lower contribution margin for new home transaction services led by a higher commission-split as percentage of net revenues from new home transaction services paid to connected agents and other channels.

Income (Loss) from Operations

Total operating expenses increased by 5.6% to RMB4.5 billion (US$0.6 billion) in the second quarter of 2024 from RMB4.3 billion in the same period of 2023.

Income from operations was RMB2,015 million (US$277 million) in the second quarter of 2024, compared to income from operations of RMB1,081 million in the same period of 2023. Operating margin increased to 8.6% in the second quarter of 2024 from 5.5% in the same period of 2023, primarily due to a slight increase in gross margin and improved operating leverage in the second quarter of 2024, compared to the same period of 2023.

Adjusted income from operations6 was RMB2,813 million (US$387 million) in the second quarter of 2024, compared to RMB2,148 million in the same period of 2023. Adjusted operating margin7 was 12.0% in the second quarter of 2024, compared to 11.0% in the same period of 2023. Adjusted EBITDA8 was RMB3,372 million (US$464 million) in the second quarter of 2024, compared to RMB2,505 million in the same period of 2023.

________________________
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. 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.


Net Income (Loss)

Net income was RMB1,900 million (US$262 million) in the second quarter of 2024, compared to RMB1,300 million in the same period of 2023.

Adjusted net income was RMB2,693 million (US$371 million) in the second quarter of 2024, compared to RMB2,364 million in the same period of 2023.

Net Income (Loss) attributable to KE Holdings Inc.’s Ordinary Shareholders

Net income attributable to KE Holdings Inc.’s ordinary shareholders was RMB1,892 million (US$260 million) in the second quarter of 2024, compared to RMB1,309 million in the same period of 2023.

Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders9 was RMB2,685 million (US$369 million) in the second quarter of 2024, compared to RMB2,373 million in the same period of 2023.

Net Income (Loss) per ADS

Basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders10 were RMB1.67 (US$0.23) and RMB1.61 (US$0.22) in the second quarter of 2024, respectively, compared to RMB1.10 and RMB1.08 in the same period of 2023, respectively.

Adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders11 were RMB2.36 (US$0.32) and RMB2.28 (US$0.31) in the second quarter of 2024, respectively, compared to RMB2.00 and RMB1.96 in the same period of 2023, respectively.

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9 Adjusted net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial measure and 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.


Cash, Cash Equivalents, Restricted Cash and Short-Term Investments

As of June 30, 2024, the combined balance of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB59.7 billion (US$8.2 billion).

Upsizing and Extension of Share Repurchase Program

As previously disclosed, the Company established a share repurchase program in August 2022 and upsized and extended it in August 2023, under which the Company may purchase up to US$2 billion of its Class A ordinary shares and/or ADSs until August 31, 2024 (the “Existing Share Repurchase Program”). As of the date of this press release, the Company in aggregate has purchased approximately 95.0 million ADSs (representing approximately 285.0 million Class A ordinary shares) on the New York Stock Exchange with a total consideration of approximately US$1,389.8 million under the Existing Share Repurchase Program since its launch.

On August 12, 2024, the Company’s board of directors approved modifications to the Existing Share Repurchase Program, pursuant to which the repurchase authorization has been further increased from US$2 billion to US$3 billion of its Class A ordinary shares and/or ADSs and extended until August 31, 2025 (the “Extended Share Repurchase Program”). In the annual general meeting (the “AGM”) held on June 14, 2024, the shareholders of the Company have approved to grant the board of directors a general unconditional mandate to purchase the Company’s own shares (the “2024 Share Repurchase Mandate”) which covers the repurchases to be made under the Extended Share Repurchase Program until the conclusion of the next AGM of the Company. After the expiry of the 2024 Share Repurchase Mandate, the Company will seek for another general unconditional mandate for repurchase from the shareholders of the Company at the next AGM to continue its share repurchase under the Extended Share Repurchase Program.

Conference Call Information

The Company will hold an earnings conference call at 8:00 A.M. U.S. Eastern Time on Monday, August 12, 2024 (8:00 P.M. Beijing/Hong Kong Time on Monday, August 12, 2024) 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:

English Line: https://s1.c-conf.com/diamondpass/10040170-jgu87y.html

Chinese Simultaneous Interpretation Line (listen-only mode): https://s1.c-conf.com/diamondpass/10040172-lap9i8.html

A replay of the conference call will be accessible through August 19, 2024, by dialing the following numbers:

United States: +1-855-883-1031
Mainland, China: 400-1209-216
Hong Kong, China: 800-930-639
International: +61-7-3107-6325
Replay PIN (English line): 10040170
Replay PIN (Chinese simultaneous interpretation line): 10040172
   

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 RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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 statements 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 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 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 22 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 investor and media inquiries, please contact:

In China:
KE Holdings Inc.
Investor Relations
Siting Li
E-mail: ir@ke.com

Piacente Financial Communications
Jenny Cai
Tel: +86-10-6508-0677
E-mail: ke@tpg-ir.com

In the United States:
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: ke@tpg-ir.com

Source: KE Holdings Inc.

 
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share, per share data)
             
    As of   As of
December 31, June 30,
    2023   2024
    RMB   RMB   US$
             
ASSETS            
Current assets            
Cash and cash equivalents   19,634,716     9,409,071     1,294,731  
Restricted cash   6,222,745     8,117,582     1,117,016  
Short-term investments   34,257,958     42,222,652     5,810,030  
Short-term financing receivables, net of allowance for credit losses of RMB122,482 and RMB118,595 as of December 31, 2023 and June 30, 2024, respectively   1,347,759     1,460,169     200,926  
Accounts receivable and contract assets, net of allowance for credit losses of RMB1,681,127 and RMB 1,687,261 as of December 31, 2023 and June 30, 2024, respectively   3,176,169     3,904,153     537,229  
Amounts due from and prepayments to related parties   419,270     416,759     57,348  
Loan receivables from related parties   28,030     27,770     3,821  
Prepayments, receivables and other assets   4,666,976     5,098,886     701,631  
Total current assets   69,753,623     70,657,042     9,722,732  
Non-current assets            
Property, plant and equipment, net   1,965,098     2,065,608     284,237  
Right-of-use assets   17,617,915     20,487,100     2,819,119  
Long-term investments, net   23,570,988     22,132,865     3,045,584  
Intangible assets, net   1,067,459     927,533     127,633  
Goodwill   4,856,807     4,847,762     667,074  
Long-term loan receivables from related parties   27,000     19,300     2,656  
Other non-current assets   1,473,041     1,360,787     187,250  
Total non-current assets   50,578,308     51,840,955     7,133,553  
TOTAL ASSETS   120,331,931     122,497,997     16,856,285  
             
LIABILITIES            
Current liabilities            
Accounts payable   6,328,516     6,684,706     919,846  
Amounts due to related parties   430,350     398,473     54,832  
Employee compensation and welfare payable   8,145,779     6,064,974     834,568  
Customer deposits payable   3,900,564     5,794,761     797,386  
Income taxes payable   698,568     747,112     102,806  
Short-term borrowings   290,450     445,530     61,307  
Lease liabilities current portion   9,368,607     11,632,047     1,600,623  
Contract liability and deferred revenue   4,665,201     5,422,197     746,119  
Accrued expenses and other current liabilities   5,695,948     6,186,560     851,299  
Total current liabilities   39,523,983     43,376,360     5,968,786  
Non-current liabilities            
Deferred tax liabilities   279,341     279,341     38,439  
Lease liabilities non-current portion   8,327,113     8,136,397     1,119,605  
Other non-current liabilities   389     2,791     384  
Total non-current liabilities   8,606,843     8,418,529     1,158,428  
TOTAL LIABILITIES   48,130,826     51,794,889     7,127,214  
             
SHAREHOLDERS’ EQUITY            
KE Holdings Inc. shareholders’ equity            
Ordinary shares (US$0.00002 par value; 25,000,000,000                  
ordinary shares authorized, comprising of
24,114,698,720 Class A ordinary shares and
885,301,280 Class B ordinary shares. 3,571,960,220
Class A ordinary shares issued and 3,443,860,844 Class
A ordinary shares outstanding(1) as of December 31,
2023; 3,529,562,630 Class A ordinary shares issued and
3,395,696,348 Class A ordinary shares outstanding(1) as
of June 30, 2024; and 151,354,549 and 147,500,681
Class B ordinary shares issued and outstanding as of
December 31, 2023 and June 30, 2024, respectively)
  475     467     64  
Treasury shares   (866,198 )   (350,595 )   (48,243 )
Additional paid-in capital   77,583,054     73,059,977     10,053,387  
Statutory reserves   811,107     811,107     111,612  
Accumulated other comprehensive income   244,302     397,365     54,679  
Accumulated deficit   (5,672,916 )   (3,349,081 )   (460,849 )
Total KE Holdings Inc. shareholders’ equity   72,099,824     70,569,240     9,710,650  
Non-controlling interests   101,281     133,868     18,421  
TOTAL SHAREHOLDERS’ EQUITY   72,201,105     70,703,108     9,729,071  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   120,331,931     122,497,997     16,856,285  
             
(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.
             
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(All amounts in thousands, except for share, per share data, ADS and per ADS data)
                         
    For the Three Months Ended   For the Six Months Ended
    June 30,   June 30,   June 30,   June 30,   June 30,   June 30,
    2023 2024 2024 2023 2024 2024
    RMB   RMB   US$   RMB   RMB   US$
                         
Net revenues                        
Existing home transaction services   6,415,888     7,334,889     1,009,314     15,597,087     13,061,919     1,797,380  
New home transaction services   8,695,630     7,933,805     1,091,728     17,099,714     12,850,320     1,768,263  
Home renovation and furnishing   2,624,899     4,040,224     555,953     4,032,830     6,449,072     887,422  
Home rental services   1,193,534     3,187,540     438,620     2,100,888     5,812,743     799,860  
Emerging and other services   553,970     873,972     120,263     931,482     1,573,690     216,547  
Total net revenues   19,483,921     23,370,430     3,215,878     39,762,001     39,747,744     5,469,472  
Cost of revenues                        
Commission-split   (5,753,173 )   (5,439,667 )   (748,523 )   (11,363,560 )   (8,857,846 )   (1,218,880 )
Commission and compensation-internal   (4,118,839 )   (4,444,340 )   (611,562 )   (9,360,775 )   (8,065,289 )   (1,109,821 )
Cost of home renovation and furnishing   (1,848,140 )   (2,776,351 )   (382,039 )   (2,825,059 )   (4,448,069 )   (612,075 )
Cost of home rental services   (1,260,041 )   (3,001,325 )   (412,996 )   (2,248,885 )   (5,481,822 )   (754,324 )
Cost related to stores   (729,912 )   (680,930 )   (93,699 )   (1,415,651 )   (1,365,977 )   (187,965 )
Others   (430,626 )   (510,767 )   (70,284 )   (855,083 )   (889,605 )   (122,413 )
Total cost of revenues(1)   (14,140,731 )   (16,853,380 )   (2,319,103 )   (28,069,013 )   (29,108,608 )   (4,005,478 )
Gross profit   5,343,190     6,517,050     896,775     11,692,988     10,639,136     1,463,994  
Operating expenses                        
Sales and marketing expenses(1)   (1,649,458 )   (1,881,726 )   (258,934 )   (2,943,272 )   (3,505,463 )   (482,368 )
General and administrative expenses(1)   (2,105,234 )   (2,079,299 )   (286,121 )   (3,726,483 )   (4,098,494 )   (563,972 )
Research and development expenses(1)   (474,789 )   (504,509 )   (69,423 )   (931,529 )   (971,809 )   (133,725 )
Impairment of goodwill, intangible assets and other long-lived assets   (32,775 )   (36,397 )   (5,008 )   (32,775 )   (36,397 )   (5,008 )
Total operating expenses   (4,262,256 )   (4,501,931 )   (619,486 )   (7,634,059 )   (8,612,163 )   (1,185,073 )
Income from operations   1,080,934     2,015,119     277,289     4,058,929     2,026,973     278,921  
Interest income, net   338,735     356,578     49,067     602,226     666,253     91,679  
Share of results of equity investees   8,805     351     48     14,475     (3,735 )   (514 )
Fair value changes in investments, net   29,841     70,523     9,704     73,006     78,288     10,773  
Impairment loss for equity investments accounted for using Measurement Alternative   (7,214 )   (1,902 )   (262 )   (9,313 )   (8,049 )   (1,108 )
Foreign currency exchange loss   (50,540 )   (55,277 )   (7,606 )   (15,833 )   (73,025 )   (10,049 )
Other income, net   172,310     363,972     50,084     727,283     901,610     124,066  
Income before income tax expense   1,572,871     2,749,364     378,324     5,450,773     3,588,315     493,768  
Income tax expense   (273,366 )   (848,960 )   (116,821 )   (1,401,522 )   (1,255,789 )   (172,802 )
Net income   1,299,505     1,900,404     261,503     4,049,251     2,332,526     320,966  
                         
Net loss (income) attributable to non-controlling interests shareholders   9,228     (8,343 )   (1,148 )   6,326     (8,691 )   (1,196 )
Net income attributable to KE Holdings Inc.   1,308,733     1,892,061     260,355     4,055,577     2,323,835     319,770  
Net income attributable to KE Holdings Inc.’s ordinary shareholders   1,308,733     1,892,061     260,355     4,055,577     2,323,835     319,770  
                         
Net income   1,299,505     1,900,404     261,503     4,049,251     2,332,526     320,966  
Currency translation adjustments   1,233,419     84,115     11,575     893,719     120,450     16,574  
Unrealized gains (losses) on available-for-sale investments, net of reclassification   (15,649 )   7,282     1,002     (1,024 )   32,613     4,488  
Total comprehensive income   2,517,275     1,991,801     274,080     4,941,946     2,485,589     342,028  
Comprehensive loss (income) attributable to non-controlling interests shareholders   9,228     (8,343 )   (1,148 )   6,326     (8,691 )   (1,196 )
Comprehensive income attributable to KE Holdings Inc.   2,526,503     1,983,458     272,932     4,948,272     2,476,898     340,832  
Comprehensive income attributable to KE Holdings Inc.’s ordinary shareholders   2,526,503     1,983,458     272,932     4,948,272     2,476,898     340,832  
                         
Weighted average number of ordinary shares used in computing net income per share, basic and diluted                        
—Basic   3,559,273,186     3,406,250,235     3,406,250,235     3,555,127,466     3,422,928,331     3,422,928,331  
—Diluted   3,632,443,288     3,525,256,472     3,525,256,472     3,643,230,834     3,533,558,988     3,533,558,988  
                         
Weighted average number of ADS used in computing net income per ADS, basic and diluted                        
—Basic   1,186,424,395     1,135,416,745     1,135,416,745     1,185,042,489     1,140,976,110     1,140,976,110  
—Diluted   1,210,814,429     1,175,085,491     1,175,085,491     1,214,410,278     1,177,852,996     1,177,852,996  
                         
Net income per share attributable to KE Holdings Inc.’s ordinary shareholders                        
—Basic   0.37     0.56     0.08     1.14     0.68     0.09  
—Diluted   0.36     0.54     0.07     1.11     0.66     0.09  
                         
Net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders                        
—Basic   1.10     1.67     0.23     3.42     2.04     0.28  
—Diluted   1.08     1.61     0.22     3.34     1.97     0.27  
                         
(1) Includes share-based compensation expenses as follows:                        
Cost of revenues   132,570     125,401     17,256     226,566     249,834     34,379  
Sales and marketing expenses   46,416     43,458     5,980     77,481     90,761     12,489  
General and administrative expenses   655,554     513,776     70,698     1,188,897     1,090,910     150,114  
Research and development expenses   46,687     48,416     6,662     90,038     92,926     12,787  
                         
KE Holdings Inc.
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except for share, per share data, ADS and per ADS data)
                         
    For the Three Months Ended   For the Six Months Ended
    June 30,   June 30,   June 30,   June 30,   June 30,   June 30,
  2023 2024 2024 2023 2024 2024
  RMB   RMB   US$   RMB   RMB   US$
                         
                         
Income from operations   1,080,934     2,015,119     277,289     4,058,929     2,026,973     278,921  
Share-based compensation expenses   881,227     731,051     100,596     1,582,982     1,524,431     209,769  
Amortization of intangible assets resulting from acquisitions and business cooperation agreement   152,640     29,991     4,127     302,773     184,284     25,358  
Impairment of goodwill, intangible assets and other long-lived assets   32,775     36,397     5,008     32,775     36,397     5,008  
Adjusted income from operations   2,147,576     2,812,558     387,020     5,977,459     3,772,085     519,056  
                         
Net income   1,299,505     1,900,404     261,503     4,049,251     2,332,526     320,966  
Share-based compensation expenses   881,227     731,051     100,596     1,582,982     1,524,431     209,769  
Amortization of intangible assets resulting from acquisitions and business cooperation agreement   152,640     29,991     4,127     302,773     184,284     25,358  
Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration   (2,671 )   87     12     (38,581 )   13,278     1,827  
Impairment of goodwill, intangible assets and other long-lived assets   32,775     36,397     5,008     32,775     36,397     5,008  
Impairment of investments   7,214     1,902     262     9,313     8,049     1,108  
Tax effects on non-GAAP adjustments   (6,562 )   (6,494 )   (894 )   (13,122 )   (13,410 )   (1,845 )
Adjusted net income   2,364,128     2,693,338     370,614     5,925,391     4,085,555     562,191  
                         
Net income   1,299,505     1,900,404     261,503     4,049,251     2,332,526     320,966  
Income tax expense   273,366     848,960     116,821     1,401,522     1,255,789     172,802  
Share-based compensation expenses   881,227     731,051     100,596     1,582,982     1,524,431     209,769  
Amortization of intangible assets   156,994     36,012     4,955     309,914     194,518     26,767  
Depreciation of property, plant and equipment   195,093     173,690     23,901     384,815     338,859     46,629  
Interest income, net   (338,735 )   (356,578 )   (49,067 )   (602,226 )   (666,253 )   (91,679 )
Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration   (2,671 )   87     12     (38,581 )   13,278     1,827  
Impairment of goodwill, intangible assets and other long-lived assets   32,775     36,397     5,008     32,775     36,397     5,008  
Impairment of investments   7,214     1,902     262     9,313     8,049     1,108  
Adjusted EBITDA   2,504,768     3,371,925     463,991     7,129,765     5,037,594     693,197  
                         
Net income attributable to KE Holdings Inc.’s ordinary shareholders   1,308,733     1,892,061     260,355     4,055,577     2,323,835     319,770  
Share-based compensation expenses   881,227     731,051     100,596     1,582,982     1,524,431     209,769  
Amortization of intangible assets resulting from acquisitions and business cooperation agreement   152,640     29,991     4,127     302,773     184,284     25,358  
Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration   (2,671 )   87     12     (38,581 )   13,278     1,827  
Impairment of goodwill, intangible assets and other long-lived assets   32,775     36,397     5,008     32,775     36,397     5,008  
Impairment of investments   7,214     1,902     262     9,313     8,049     1,108  
Tax effects on non-GAAP adjustments   (6,562 )   (6,494 )   (894 )   (13,122 )   (13,410 )   (1,845 )
Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders   (7 )   (7 )   (1 )   (14 )   (14 )   (2 )
Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders   2,373,349     2,684,988     369,465     5,931,703     4,076,850     560,993  
                         
Weighted average number of ADS used in computing net income per ADS, basic and diluted                        
—Basic   1,186,424,395     1,135,416,745     1,135,416,745     1,185,042,489     1,140,976,110     1,140,976,110  
—Diluted   1,210,814,429     1,175,085,491     1,175,085,491     1,214,410,278     1,177,852,996     1,177,852,996  
                         
Weighted average number of ADS used in calculating adjusted net income per ADS, basic and diluted                        
—Basic   1,186,424,395     1,135,416,745     1,135,416,745     1,185,042,489     1,140,976,110     1,140,976,110  
—Diluted   1,210,814,429     1,175,085,491     1,175,085,491     1,214,410,278     1,177,852,996     1,177,852,996  
                         
Net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders                        
—Basic   1.10     1.67     0.23     3.42     2.04     0.28  
—Diluted   1.08     1.61     0.22     3.34     1.97     0.27  
                         
Non-GAAP adjustments to net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders                        
—Basic   0.90     0.69     0.09     1.59     1.53     0.21  
—Diluted   0.88     0.67     0.09     1.54     1.49     0.21  
                         
Adjusted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders                        
—Basic   2.00     2.36     0.32     5.01     3.57     0.49  
—Diluted   1.96     2.28     0.31     4.88     3.46     0.48  
                         
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(All amounts in thousands)
                         
    For the Three Months Ended   For the Six Months Ended
    June 30,   June 30,   June 30,   June 30,   June 30,   June 30,
    2023 2024 2024 2023 2024 2024
    RMB   RMB   US$   RMB   RMB   US$
                         
Net cash provided by (used in) operating activities   (196,144 )   4,772,954     656,778     7,431,689     3,857,678     530,836  
Net cash provided by (used in) investing activities   2,055,696     (8,134,019 )   (1,119,277 )   7,633,614     (6,843,593 )   (941,709 )
Net cash used in financing activities   (2,537,964 )   (3,931,260 )   (540,959 )   (2,869,607 )   (5,377,054 )   (739,907 )
Effect of exchange rate change on cash, cash equivalents and restricted cash   36,149     35,666     4,908     22,137     32,161     4,422  
Net increase (decrease) in cash and cash equivalents and restricted cash   (642,263 )   (7,256,659 )   (998,550 )   12,217,833     (8,330,808 )   (1,146,358 )
Cash, cash equivalents and restricted cash at the beginning of the period   38,454,355     24,783,312     3,410,297     25,594,259     25,857,461     3,558,105  
Cash, cash equivalents and restricted cash at the end of the period   37,812,092     17,526,653     2,411,747     37,812,092     17,526,653     2,411,747  
                         
KE Holdings Inc.
UNAUDITED SEGMENT CONTRIBUTION MEASURE
(All amounts in thousands)
                         
    For the Three Months Ended   For the Six Months Ended
    June 30,   June 30,   June 30,   June 30,   June 30,   June 30,
    2023 2024 2024 2023 2024 2024
    RMB   RMB   US$   RMB   RMB   US$
Existing home transaction services                        
Net revenues   6,415,888     7,334,889     1,009,314     15,597,087     13,061,919     1,797,380  
Less: Commission and compensation   (3,490,480 )   (3,851,787 )   (530,024 )   (8,169,959 )   (7,032,712 )   (967,733 )
Contribution   2,925,408     3,483,102     479,290     7,427,128     6,029,207     829,647  
New home transaction services                        
Net revenues   8,695,630     7,933,805     1,091,728     17,099,714     12,850,320     1,768,263  
Less: Commission and compensation   (6,330,323 )   (5,947,840 )   (818,450 )   (12,462,059 )   (9,768,943 )   (1,344,251 )
Contribution   2,365,307     1,985,965     273,278     4,637,655     3,081,377     424,012  
Home renovation and furnishing                        
Net revenues   2,624,899     4,040,224     555,953     4,032,830     6,449,072     887,422  
Less: Material costs, commission and compensation   (1,848,140 )   (2,776,351 )   (382,039 )   (2,825,059 )   (4,448,069 )   (612,075 )
Contribution   776,759     1,263,873     173,914     1,207,771     2,001,003     275,347  
Home rental services                        
Net revenues   1,193,534     3,187,540     438,620     2,100,888     5,812,743     799,860  
Less: Property leasing costs, commission and compensation   (1,260,041 )   (3,001,325 )   (412,996 )   (2,248,885 )   (5,481,822 )   (754,324 )
(Deficit)/Contribution   (66,507 )   186,215     25,624     (147,997 )   330,921     45,536  
Emerging and other services                        
Net revenues   553,970     873,972     120,263     931,482     1,573,690     216,547  
Less: Commission and compensation   (51,209 )   (84,380 )   (11,611 )   (92,317 )   (121,480 )   (16,717 )
Contribution   502,761     789,592     108,652     839,165     1,452,210     199,830  


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