KE Holdings Trades Growth for Margins As Q1 Net Income Jumps 47%

The Chinese brokerage and real estate marketplace operator KE Holdings (aka Beike) saw revenue fall 19% year-on-year in Q1 2026, while net income climbed 47% as the company prioritised margins over scale. Notable points from the company's report on its activities for the three months ended March 31st include:

• Net revenues were USD 2.7 billion (RMB 18.9 billion), down 19% year-on-year
• GTV was USD 103.2 billion (RMB 712 billion). Existing home GTV was down 7.9% (USD 77.5 billion). New home GTV was down 37.2% (USD 21.2 billion)
• Net income was USD 182 million (RMB 1,255 million), up 46.7% year-on-year
• Gross margin reached 24.1%, the highest since Q2 2024 and up from 20.7% in the prior-year quarter
• Adjusted operating margin was 8.8%, a seven-quarter high
• Cash, cash equivalents, restricted cash and short-term investments totalled USD 7.8 billion (RMB 53.9 billion)
• The company repurchased approximately USD 195 million of its shares in the quarter, up around 40% on the year

Commenting on the results, Mr Stanley Yongdong Peng, chairman and chief executive officer of Beike, said:

"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."

New home transactions, the segment most exposed to China's primary-market weakness, was the worst hit. Revenue there fell 37% to RMB 5.1 billion, the steepest decline of the five segments. Existing home transactions revenue was down 10.7% at RMB 6.1 billion, on a contribution margin of 41.3%. Home renovation and furnishing revenue slipped 20.6% but held a 36.2% margin, and the small emerging-services segment ran at a 68.8% margin on RMB 321 million of revenue.

Home rental services was the standout for resilience, with revenue down just 1.5% to RMB 5 billion. The segment mix has shifted sharply. A year ago, new home transactions revenue was around 60% larger than rentals. In Q1 2026 the two were effectively tied at RMB 5.1 billion versus RMB 5.0 billion. OnlineMarketplaces.com reported in Q3 2025 that Beike was leaning on rentals and renovations to offset transaction-market weakness.

Beike's adjusted income from operations rose 5.4% even as revenue fell by nearly a fifth. Sales and marketing expenses came in at RMB 1.1 billion. The Lianjia store network and the connected-agent platform are handling more business per head, with active agents down 7.6% on the year to 453,000.

The shareholder returns programme has scaled alongside. Cumulative buybacks since the programme's launch sit at USD 2.7 billion and 171 million ADSs. Beike has been one of the more aggressive buyers among its US-listed Chinese peers in 2026.