KE (NYSE:BEKE) executives used the company’s fourth-quarter and full-year 2025 earnings call to describe a strategic pivot toward “efficiency-driven” growth, emphasizing a greater use of data and AI, tighter cost discipline, and a business mix that management said is becoming more diversified and resilient across housing cycles.
Strategic pivot: from scale expansion to efficiency and decision support
Chief Financial Officer Tao Xu said the company responded to “evolving customer needs” by shifting from “sales-driven to efficiency-driven growth” in 2025. He framed the effort as a set of initiatives to optimize the business model, improve unit economics, and strengthen the stability and flexibility of earnings.
Peng outlined four focus areas: upgrading transaction services into “full process decision support services,” optimizing resource allocation using data and AI, embedding AI capabilities into service workflows, and building diversified services across a broader residential ecosystem.
Full-year 2025 highlights: mix shift, efficiency gains, and shareholder returns
Xu said full-year revenue “remained relatively stable” amid market fluctuations and “outperformed broader industry trends,” supported by a more diversified and “countercyclical” structure. He noted that revenue from non-housing transaction businesses reached a record 41% of total revenue.
Within housing transaction services, Xu said existing home GTV accounted for 67.6% of total GTV, and that connected brands contributed about 63% of existing home GTV, which he characterized as a lighter business model. He also said operating efficiency improved across segments, citing sequential declines in fixed labor costs in existing home brokerage for four consecutive quarters and improved contribution margins in multiple businesses.
Management also emphasized shareholder returns. Xu said 2025 share repurchases totaled about RMB 921 million, up roughly 29% year-over-year, and the company announced a final cash dividend plan of about $0.3 billion. He said total 2025 shareholder return was about RMB 1.22 billion, roughly 170% of 2025 non-GAAP net profit. Xu added that since the repurchase program began in September 2022, the company had repurchased about RMB 2.5 billion in shares by the end of 2025, reducing total issued shares by about 12.6% compared with before the program launch.
Q4 results: lower GTV and revenue on a high base, with one-off cost actions
Xu said fourth-quarter performance was affected by a high comparison base from the prior year. Q4 GTV was RMB 724.1 billion, down 36.7% year-over-year, and revenue was RMB 22.2 billion, down 28.7% year-over-year. Gross margin was 21.4%, down 1.6 percentage points year-over-year.
Profitability declined sharply year-over-year. Xu reported Q4 GAAP net profit of RMB 823 million, down 85.7% year-over-year, and non-GAAP net profit of RMB 517 million, down 61.5%. He said results were “partially affected” by one-off expenses tied to cost optimization initiatives, which weighed on near-term profitability but were intended to streamline the cost structure and improve operating leverage over time.
Xu also detailed Q4 expenses and operating profitability. GAAP operating expenses were RMB 4.9 billion, down 20.4% year-over-year but up 13.3% sequentially due to one-off optimization costs. GAAP operating loss was RMB 147 million versus operating profit of RMB 1.01 billion a year earlier. Non-GAAP income from operations was RMB 323 million.
Segment performance: existing home resilience, new home margin improvement, rentals scale and profitability
Existing home: Q4 existing home GTV was RMB 482 billion, down 35.3% year-over-year and down 4.7% sequentially. Revenue was RMB 5.4 billion, down 39% year-over-year. Xu said platform service revenue declined 19.9% year-over-year, outperforming the overall GTV decline, which he said demonstrated resilience of the platform model. Contribution margin in the segment was 40.4%, stable year-over-year and up 1.5 percentage points sequentially.
For the full year, Peng said the platform facilitated RMB 2.15 trillion in existing home GTV in 2025, and that the number of existing home sales transactions nationwide hit a historical high. He said the number of existing home sales transactions on Beike increased by more than 10% year-over-year, while transaction volume from connected stores increased 15% year-over-year. Peng said the platform ended the year with more than 58,000 connected stores and over 445,000 agents, and that average existing home transactions per connected agent rose 6% year-over-year.
New home: Q4 new home GTV was RMB 207 billion, down 45.7% year-over-year but up 5.5% sequentially. Revenue was RMB 7.3 billion, down 44.5% year-over-year and up 9.4% sequentially. Contribution margin rose to 28.3%, up 2.6 percentage points year-over-year and 4.2 percentage points sequentially, which Xu attributed to cost structure optimization.
Peng said Beike facilitated RMB 890.8 billion in new home GTV in 2025 and described a strategic shift from channel-driven growth to “structural efficiency” improvement. In Q&A, management said it aims to evolve from a channel player to an “integrated capability platform,” including improved online decision support, better traffic allocation and matching using data systems, and expanded services for developers such as project positioning insights and integrated marketing and sales support.
Home renovation and furnishing: Q4 revenue was RMB 3.6 billion, down 12% year-over-year and down 15.9% sequentially. Xu said the decline reflected a prudent balance between scale and risk and a channel structure optimization. Q4 contribution margin was 28.8%, down year-over-year, driven largely by a provision for potential warranty costs on orders under warranty at the end of 2025.
For the full year, Peng said revenue rose 4.4% to RMB 15.4 billion and contribution margin increased to 31.4%, with operating losses narrowing significantly. In Q&A, management said slower growth was a deliberate choice to control expansion pace while validating unit economics. Management cited progress in centralized procurement—completed tenders for about 80% of key materials and about 60% of auxiliary materials—along with improvements in dispatch mechanisms, digital design tools, modularization, and measures intended to reduce rework and delivery variability.
Home rental services: Q4 rental revenue increased 18.1% year-over-year to RMB 5.4 billion, though it declined 5.5% sequentially due to an accounting method change tied to a product model upgrade. Xu said the company had over 700,000 rental units under management by the end of Q4, up about 62% year-over-year. Q4 rental contribution margin was 10.4%, up 5.9 percentage points year-over-year.
Management said the Carefree Rent business is shifting toward a lighter, lower-risk model, increasing the share of units recognized on a net basis; Xu said the proportion exceeded 30% by the end of 2025. In Q&A, management emphasized that the accounting change did not negatively affect cash flow or unit-level profitability, and pointed to productivity gains, lower customer acquisition costs per unit, and product mix improvements as drivers of longer-term unit economics.
AI and organizational changes: embedding tools into workflows
Peng described AI as a “new productivity engine,” arguing it can make the rational parts of transactions more systematic while allowing humans to focus on judgment, trust, and accountability. He said Beike is embedding AI into operational scenarios, including AI tools that generate marketing materials and AI simulation tools to help service providers practice customer interactions. He also cited AI use cases in rentals such as acquisition decisions, rental pricing recommendations, leasing matching, and risk identification.
On organization, Peng said the company is streamlining structures and management layers that do not directly create customer value, and pushing managers closer to the front line. Looking to 2026, Peng said the company holds a “neutral market view” and will focus on validating its decision support model, including testing impacts on conversion and unit economics, while strengthening service and organizational capabilities.
About KE (NYSE:BEKE)
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.
