KE Holdings Q1 2025: Serious Revenue Growth as New Homes Transaction Segment Matures

China-based hybrid real estate platform Beike (KE Holdings Inc.) reported a 42.4% year-on-year revenue increase in Q1 2025, reaching RMB23.3 billion ($3.2 billion U.S.), driven by gains in transaction volume and an expanded rental offering.

Highlights include:

• Revenue was RMB23.3 billion (USD 3.2 billion), up 2% year-on-year.
• Net income was RMB855 million (US$118 million), an increase of 97.9%.
• The number of stores was 56,849 as of March 31, 2025, a 28.6% increase.
• The number of agents was 550,290 as of March 31, 2025, a 24.3% increase.
• The number of mobile monthly active users dropped to 44.5 million, down 6.7% from 47.7 million in the same period last year.

While revenues grew, gross margin declined to 20.7% from 25.2% a year earlier. This was due to increased fixed compensation costs and a shift in revenue mix. The bulk of the revenue increase was attributable to an increase in GTV of existing home transactions, hence no noticeable uptick in share price after the announcement.

Look through the prism of year-on-year performance, and Beike's new home transactions were by far the standout performer, soaring by 64% since Q1 2024. Meanwhile, the Existing Homes Transactions segment (20%) and the Home Renovations and Refurbishments segment (23%) both saw solid, if modest, growth.

However, the group's emerging segment reduced by half (-49%)—but Beike won't complain about this given the huge growth elsewhere.

Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, said:

"Building on the stable market performance and the continued effectiveness of our growth strategy, our business maintained strong growth in the first quarter, with our total transaction value increasing by 34.0% year-over-year and net revenues rising by 42.4%. Our housing transaction services continue to significantly outperform the market.

"Our platform continually empowers more industry partners, with the numbers of active stores and agents increasing notably by 29.6% and 23.0% year-over-year, respectively, and with improvements in both agent and store efficiency. Our home renovation and furnishing services saw steady revenue growth, achieving a record high in contribution margin, with initial progress in improving customer experience and operational efficiency. The home rental services managed over 500,000 units by the end of the first quarter, with ongoing improvements in operational capabilities. We are also advancing our AI applications, deploying multiple intelligent tools on both the C-end and B-end, enhancing customer experience and boosting service efficiency.”

"Looking ahead, we are confident in the long-term development of our Company under the ‘One Body, Three Wings’ strategy and will continue to invest firmly in AI applications. At the same time, we will be more prudent in other types of investments this year, focusing on the return on investment to strengthen the foundation for safe operations and ensure that shareholders who support the Company’s long-term vision can benefit from our sustainable development."