• KE Holdings Inc. Announces Third Quarter 2023 Unaudited Financial Results

    Source: Nasdaq GlobeNewswire / 08 Nov 2023 05:00:41   America/New_York

    BEIJING, Nov. 08, 2023 (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 third quarter ended September 30, 2023.

    Business and Financial Highlights for the Third Quarter of 2023

    • Gross transaction value (GTV)1 was RMB655.2 billion (US$89.8 billion), a decrease of 11.1% year-over-year. GTV of existing home transactions was RMB439.0 billion (US$60.2 billion), a decrease of 2.2% year-over-year. GTV of new home transactions was RMB192.1 billion (US$26.3 billion), a decrease of 26.5% year-over-year. GTV of home renovation and furnishing was RMB3.3 billion (US$0.4 billion), an increase of 65.6% year-over-year. GTV of emerging and other services was RMB20.7 billion (US$2.8 billion), a decrease of 16.0% year-over-year.
    • Net revenues were RMB17.8 billion (US$2.4 billion), an increase of 1.2% year-over-year.
    • Net income was RMB1,170 million (US$160 million). Adjusted net income2 was RMB2,159 million (US$296 million).
    • Number of stores was 43,013 as of September 30, 2023, a 3.9% increase from one year ago. Number of active stores3 was 40,903 as of September 30, 2023, a 3.0% increase from one year ago.
    • Number of agents was 429,352 as of September 30, 2023, a 6.6% increase from one year ago. Number of active agents4 was 399,048 as of September 30, 2023, a 7.1% increase from one year ago.
    • Mobile monthly active users (MAU)5 averaged 49.2 million in the third quarter of 2023, compared to 42.4 million in the same period of 2022.

    Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, commented, “During the third quarter of 2023, China’s real estate market saw meaningful monthly rebound supported by a wave of government favorable policies, such as lowering down payment ratio. We achieved resilient top-line performance, which is a powerful testament to our across-the-board efforts for business growth and efficiency improvement.”

    “As we see a horizon with prospects centered on ‘better living’, and are eager to fulfill the tremendous needs from consumers, we have upgraded our corporate strategy to ‘One Body, Three Wings’, a significant step in our roadmap to become the leading one-stop platform of residential services. Through prudent execution and efficiency improvement, we’ve reinforced the agility and resilience of our ‘One Body’ business, and are excited to connect to a broader range of industry participants to drive the sector’s high-quality advancement. We also aim to deepen our insights and ramp up our service capabilities by actively pursuing the rapid scale expansion of our new businesses, including home renovation and furnishing. We will always strive to uplift the industry standards, while forging lasting and synergistic relationships with all industry stakeholders. Our technology-empowered infrastructure, extensive datasets, strong customer traffic, and expansive store and agent network will position us well for the future, delivering unparalleled value to both our customers and the whole residential industry,” concluded Mr. Peng.

    Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike, added, “In the third quarter of this year, China’s real estate market gradually picked up from the bottom with higher-tier cities leading the month-on-month recovery in September following the introduction of supportive polices. Our net revenues grew by 1.2% year-over-year to RMB17.8 billion in the third quarter. As we actively advanced our ‘One body, Three wings’ growth strategy, we achieved a resilient revenue performance for housing transaction services in the quarter, while our home renovation and furnishing services revenue saw a 72.1% of year-on-year jump, reaching RMB3.2 billion. Notably, our enhanced operational capability and careful cost discipline generated a gross margin of 27.4%, ticking up from 27.0% in same period last year. Our net income in the third quarter saw a 63.4% year-over-year increase, reaching RMB1,170 million, while adjusted net income grew by 14.4% to RMB2,159 million, showcasing stronger profitability. Our solid cash reserves and prudent financial management have allowed us to return to shareholders in the form of share repurchases and special cash dividend issued during the third quarter. Looking forward, we will continue to execute a strategic and disciplined approach, enhance capital allocation efficiency, and prioritize our investments in business areas that bring key value, while remaining dedicated to shareholder returns. We believe this will enable us to achieve sustainable and organic growth, and create long-term value for our shareholders.”

    Third Quarter 2023 Financial Results

    Net Revenues

    Net revenues increased by 1.2% to RMB17.8 billion (US$2.4 billion) in the third quarter of 2023 from RMB17.6 billion in the same period of 2022. The increase was primarily attributable to the increase of net revenues from home renovation and furnishing and rental property management services, which was partially offset by the decrease of net revenues from existing and new home transaction services. Total GTV decreased by 11.1% to RMB655.2 billion (US$89.8 billion) in the third quarter of 2023 from RMB737.1 billion in the same period of 2022, which was primarily attributable to the soft market sentiment, especially in new home transactions, while the market also experienced a sequential recovery month-on-month, especially in September after many high-tier cities introduced supportive polices.

    • Net revenues from existing home transaction services decreased by 11.9% to RMB6.3 billion (US$0.9 billion) in the third quarter of 2023 from RMB7.2 billion in the same period of 2022, primarily attributable to the decrease of commission revenue which was partially offset by the increase of the revenues derived from platform service, franchise service and other value-added services. GTV of existing home transactions decreased by 2.2% to RMB439.0 billion (US$60.2 billion) in the third quarter of 2023 from RMB449.0 billion in the same period of 2022, primarily attributable to the decrease of GTV served by Lianjia brand, which was partially offset by the increase of GTV served by connected agents on the Company’s platform year-over-year. The larger contraction of net revenues of existing home transaction services compared to that of GTV was primarily attributable to a higher contribution from GTV of existing home transaction services served by connected agents on the Company’s platform, for which revenue is recorded on a net basis from platform service, franchise service and other value-added services, while for GTV served by Lianjia brand, the revenue is recorded on a gross commission revenue basis.

      Among that, (i) commission revenue decreased by 16.1% to RMB5.1 billion (US$0.7 billion) in the third quarter of 2023 from RMB6.1 billion in the same period of 2022, primarily due to a decrease in GTV of existing home transactions served by Lianjia stores of 13.0% to RMB191.2 billion (US$26.2 billion) in the third quarter of 2023 from RMB219.7 billion in the same period of 2022; 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 13.4% to RMB1.2 billion (US$0.2 billion) in the third quarter of 2023 from RMB1.0 billion in the same period of 2022, mainly due to an 8.1% increase of GTV of existing home transactions served by connected agents on the Company’s platform to RMB247.8 billion (US$34.0 billion) in the third quarter of 2023 from RMB229.3 billion in the same period of 2022.
    • Net revenues from new home transaction services decreased by 24.3% to RMB5.9 billion (US$0.8 billion) in the third quarter of 2023 from RMB7.8 billion in the same period of 2022, primarily due to the decrease of GTV of new home transactions of 26.5% to RMB192.1 billion (US$26.3 billion) in the third quarter of 2023 from RMB261.5 billion in the same period of 2022. Among that, the GTV of new home transactions completed on Beike platform through connected agents, dedicated sales team with the expertise on new home transaction services and other sales channels decreased by 29.6% to RMB151.9 billion (US$20.8 billion) in the third quarter of 2023 from RMB215.7 billion in the same period of 2022, while the GTV of new home transactions served by Lianjia brand decreased by 12.1% to RMB40.3 billion (US$5.5 billion) in the third quarter of 2023 from RMB45.8 billion in the same period of 2022.
    • Net revenues from home renovation and furnishing increased by 72.1% to RMB3.2 billion (US$0.4 billion) in the third quarter of 2023 from RMB1.8 billion in the same period of 2022, primarily attributable to the organic growth of the GTV for home renovation and furnishing business driven by the increase of orders and enhanced delivery capability.
    • Net revenues from emerging and other services increased by 202.7% to RMB2.4 billion (US$0.3 billion) in the third quarter of 2023 from RMB0.8 billion in the same period of 2022, primarily attributable to the increase of net revenues from rental property management services.

    Cost of Revenues

    Total cost of revenues was to RMB12.9 billion (US$1.8 billion) in the third quarter of 2023, compared to RMB12.8 billion in the same period of 2022.

    • Commission – split. The Company’s cost of revenues for commissions to connected agents and other sales channels was RMB5.5 billion (US$0.7 billion) in the third quarter of 2023, compared to RMB5.7 billion in the same period of 2022, primarily due to the decrease in GTV of new home transactions completed through connected agents and other sales channels in the third quarter of 2023 compared with the same period of 2022, which was partially offset by the increase of commission-split for rental property management services.
    • Commission and compensation – internal. The Company’s cost of revenues for internal commission and compensation was RMB4.0 billion (US$0.6 billion) in the third quarter of 2023, compared to RMB4.6 billion in the same period of 2022, primarily due to the decreased GTV of existing home transactions and new home transactions completed through Lianjia agents and dedicated sales team with the expertise on new home transaction services.
    • Cost of home renovation and furnishing. The Company’s cost of revenues for home renovation and furnishing increased by 72.7% to RMB2.3 billion (US$0.3 billion) in the third quarter of 2023 from RMB1.3 billion in the same period of 2022, which was primarily attributable to the organic growth of net revenues from home renovation and furnishing.
    • Cost related to stores. The Company’s cost related to stores decreased by 11.3% to RMB0.7 billion (US$0.1 billion) in the third quarter of 2023, compared to RMB0.8 billion in the same period of 2022, mainly due to the decrease in the number of Lianjia stores in the third quarter of 2023 compared to the same period of 2022.
    • Other costs. The Company’s other costs increased to RMB480 million (US$66 million) in the third quarter of 2023 from RMB407 million in the same period of 2022, mainly due to an increase in share-based compensation expenses and the increase in maintenance costs of rental property management services.

    Gross Profit

    Gross profit increased by 2.6% to RMB4.9 billion (US$0.7 billion) in the third quarter of 2023 from RMB4.8 billion in the same period of 2022. Gross margin was 27.4% in the third quarter of 2023, compared to 27.0% in the same period of 2022. The increase in gross margin was primarily due to a lower percentage of costs related to stores of net revenues with a relatively flat contribution margin in the third quarter of 2023 compared to the same period of 2022.

    Income (Loss) from Operations

    Total operating expenses increased by 12.0% to RMB4.0 billion (US$0.5 billion) in the third quarter of 2023 from RMB3.5 billion in the same period of 2022.

    • General and administrative expenses increased by 4.8% to RMB1,862 million (US$255 million) in the third quarter of 2023 from RMB1,777 million in the same period of 2022, mainly due to the decrease of reversal for credit loss, which was partially offset by the decrease in personnel costs compared to the same period of 2022.
    • Sales and marketing expenses increased by 29.6% to RMB1,631 million (US$223 million) in the third quarter of 2023 from RMB1,258 million in the same period of 2022, mainly due to the increase in sales and marketing expenses for home renovation and furnishing along with the growth of net revenues from home renovation and furnishing.
    • Research and development expenses decreased by 7.4% to RMB472 million (US$65 million) in the third quarter of 2023 from RMB509 million in the same period of 2022, mainly due to the decreases in personnel costs and share-based compensation as a result of decreased headcount in research and development personnel in the third quarter of 2023 compared to the same period of 2022.

    Income from operations was RMB911 million (US$125 million) in the third quarter of 2023, compared to RMB1,216 million in the same period of 2022. Operating margin was 5.1% in the third quarter of 2023, compared to 6.9% in the same period of 2022, primarily due to the increased contribution of net revenues from home renovation and furnishing and rental property management services, which was still in ramp-up period with a relatively lower operating margin than that of existing and new home transaction services in the third quarter of 2023, compared to the same period of 2022.

    Adjusted income from operations6 was RMB1,886 million (US$259 million) in the third quarter of 2023, compared to RMB2,108 million in the same period of 2022. Adjusted operating margin7 was 10.6% in the third quarter of 2023, compared to 12.0% in the same period of 2022. Adjusted EBITDA8 was RMB2,515 million (US$345 million) in the third quarter of 2023, compared to RMB2,343 million in the same period of 2022.

    Net Income (Loss)

    Net income was RMB1,170 million (US$160 million) in the third quarter of 2023, compared to RMB716 million in the same period of 2022.

    Adjusted net income was RMB2,159 million (US$296 million) in the third quarter of 2023, compared to RMB1,888 million in the same period of 2022.

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

    Net income attributable to KE Holdings Inc.’s ordinary shareholders was RMB1,158 million (US$159 million) in the third quarter of 2023, compared to RMB723 million in the same period of 2022.

    Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders9 was RMB2,147 million (US$294 million) in the third quarter of 2023, compared to RMB1,895 million in the same period of 2022.

    Net Income (Loss) per ADS

    Basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders10 were RMB0.99 (US$0.14) and RMB0.97 (US$0.13) in the third quarter of 2023, respectively, compared to RMB0.61 and RMB0.60 in the same period of 2022, respectively.

    Adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders11 were RMB1.84 (US$0.26) and RMB1.80 (US$0.24) in the third quarter of 2023, respectively, compared to RMB1.59 and RMB1.57 in the same period of 2022, respectively.

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

    As of September 30, 2023, the combined balance of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB60.4 billion (US$8.3 billion).

    Business Outlook

    For the fourth quarter of 2023, the Company expects the total net revenues to be between RMB18.0 billion (US$2.47 billion) and RMB18.5 billion (US$2.54 billion), representing an increase of approximately 7.5% to 10.5% from the same quarter of 2022. This forecast considers the potential impact of the recent real estate related policies and measures, which remain uncertain and may continue to affect the Company’s operations. Therefore, the Company’s ongoing and preliminary view is contingent on the business situation and market condition.

    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, subject to obtaining another general unconditional mandate for the repurchase from the shareholders of the Company at the next annual general meeting to continue its share repurchase after the expiry of the existing share repurchase mandate granted by the annual general meeting held on June 15, 2023. From the launch of the share repurchase program in September 2022 to September 2023, the Company in aggregate purchased approximately 49.5 million ADSs (representing approximately 148.4 million Class A ordinary shares) on the New York Stock Exchange with a total consideration of approximately US$736.5 million under the share repurchase program, and certain of these purchases were settled in early October 2023.

    Conference Call Information

    The Company will hold an earnings conference call at 7:00 A.M. U.S. Eastern Time on Wednesday, November 8, 2023 (8:00 P.M. Beijing/Hong Kong Time on Wednesday, November 8, 2023) 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/10034424-6dgyf8.html

    Chinese Simultaneous Interpretation Line (listen-only mode): https://s1.c-conf.com/diamondpass/10034531-nfg7dv.html

    A replay of the conference call will be accessible through November 15, 2023, 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):10034424
    Replay PIN (Chinese simultaneous interpretation line):10034531


    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 RMB7.2960 to US$1.00, the noon buying rate in effect on September 29, 2023, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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 for financial and operational decision-making purposes. 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 its financial and operational decision-making. 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 21 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 business outlook and 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
    December 31,    		 As of
    September 30,
     2022 2023
     RMB RMB US$
          
    ASSETS     
    Current assets     
    Cash and cash equivalents19,413,202 15,838,754 2,170,882
    Restricted cash6,181,057 6,156,622 843,835
    Short-term investments35,485,908 38,408,111 5,264,270
    Short-term financing receivables, net of allowance for credit losses of RMB139,427 and RMB129,818 as of December 31, 2022 and September 30, 2023, respectively667,224 266,557 36,535
    Accounts receivable and contract assets, net of allowance for credit losses of RMB2,088,478 and RMB1,669,694 as of December 31, 2022 and September 30, 2023, respectively4,163,022 2,770,909 379,785
    Amounts due from and prepayments to related parties405,956 438,218 60,063
    Loan receivables from related parties50,463 26,495 3,631
    Prepayments, receivables and other assets4,057,843 5,268,332 722,085
    Total current assets70,424,675 69,173,998  9,481,086
    Non-current assets     
    Property, plant and equipment, net2,036,553 1,910,480 261,853
    Right-of-use assets11,284,070 16,060,646 2,201,295
    Long-term investments, net17,925,653 24,031,090 3,293,735
    Intangible assets, net1,686,976 1,227,537 168,248
    Goodwill4,934,235 4,914,238 673,552
    Long-term loan receivables from related parties22,934 31,020 4,252
    Other non-current assets1,032,251 1,035,737 141,960
    Total non-current assets38,922,672 49,210,748  6,744,895
    TOTAL ASSETS109,347,347 118,384,746  16,225,981


    KE Holdings Inc.
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
    (All amounts in thousands, except for share, per share data)
     
     As of
    December 31,    		 As of
    September 30,
     2022 2023
     RMB RMB US$
          
    LIABILITIES     
    Current liabilities     
    Accounts payable5,843,321 5,495,539 753,226
    Amounts due to related parties425,685 385,264 52,805
    Employee compensation and welfare payable9,365,512 8,009,013 1,097,727
    Customer deposits payable4,194,828 3,937,504 539,680
    Income taxes payable542,290 782,358 107,231
    Short-term borrowings619,000 520,032 71,276
    Lease liabilities current portion4,972,345 8,093,853 1,109,355
    Contract liabilities3,260,269 4,712,694 645,928
    Accrued expenses and other current liabilities4,118,068 6,038,166 827,601
    Total current liabilities33,341,318 37,974,423  5,204,829
    Non-current liabilities     
    Deferred tax liabilities351,186 351,186 48,134
    Lease liabilities non-current portion6,599,930 8,091,884 1,109,085
    Other non-current liabilities475 389 53
    Total non-current liabilities6,951,591 8,443,459  1,157,272
    TOTAL LIABILITIES40,292,909 46,417,882  6,362,101


    KE Holdings Inc.
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
    (All amounts in thousands, except for share, per share data)
     
     As of
    December 31,    		 As of
    September 30,
     2022 2023
     RMB RMB US$
          
    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. 3,601,547,279 and 3,606,305,628 Class A ordinary shares issued and outstanding as of December 31, 2022 and September 30, 2023, respectively; and 156,426,896 and 152,809,866 Class B ordinary shares issued and outstanding as of December 31, 2022 and September 30, 2023, respectively)487  483  66 
    Treasury shares(225,329) (944,527) (129,458)
    Additional paid-in capital80,302,956  78,084,733  10,702,403 
    Statutory reserves660,817  660,817  90,573 
    Accumulated other comprehensive income (loss)(412,721) 249,757  34,232 
    Accumulated deficit(11,405,850) (6,192,231) (848,716)
    Total KE Holdings Inc. shareholders' equity68,920,360   71,859,032   9,849,100  
    Non-controlling interests134,078  107,832  14,780 
    TOTAL SHAREHOLDERS' EQUITY69,054,438   71,966,864   9,863,880  
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY109,347,347   118,384,746   16,225,981  


    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 Nine Months Ended
     September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		  September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		 
     RMB  RMB  US$  RMB  RMB  US$ 
                
    Net revenues           
    Existing home transaction services7,156,681  6,307,085  864,458  18,842,946  21,904,172  3,002,217 
    New home transaction services7,792,812  5,901,966  808,932  20,369,105  23,001,680  3,152,643 
    Home renovation and furnishing1,845,900  3,176,739  435,408  2,952,816  7,209,569  988,154 
    Emerging and other services801,189  2,424,915  332,362  1,756,772  5,457,285  747,983 
    Total net revenues17,596,582   17,810,705   2,441,160   43,921,639   57,572,706   7,890,997  
    Cost of revenues           
    Commission-split(5,665,913) (5,451,749) (747,224) (14,468,847) (18,764,937) (2,571,949)
    Commission and compensation-internal(4,637,956) (4,016,402) (550,494) (13,621,751) (13,676,434) (1,874,511)
    Cost of home renovation and furnishing(1,303,785) (2,252,251) (308,697) (2,094,831) (5,077,310) (695,903)
    Cost related to stores(821,954) (729,388) (99,971) (2,581,786) (2,145,039) (294,002)
    Others(407,377) (479,935) (65,781) (1,466,635) (1,335,018) (182,978)
    Total cost of revenues(1)(12,836,985) (12,929,725) (1,772,167) (34,233,850) (40,998,738) (5,619,343)
    Gross profit4,759,597   4,880,980   668,993   9,687,789   16,573,968   2,271,654  
    Operating expenses           
    Sales and marketing expenses(1)(1,258,104) (1,630,543) (223,485) (3,240,617) (4,573,815) (626,894)
    General and administrative expenses(1)(1,776,531) (1,862,347) (255,256) (5,554,339) (5,588,830) (766,012)
    Research and development expenses(1)(509,296) (471,631) (64,642) (2,036,886) (1,403,160) (192,319)
    Impairment of goodwill, intangible assets and other long-lived assets-  (5,201) (713) (76,244) (37,976) (5,205)
    Total operating expenses(3,543,931) (3,969,722) (544,096) (10,908,086) (11,603,781) (1,590,430)
    Income (loss) from operations1,215,666   911,258   124,897   (1,220,297) 4,970,187   681,224  
    Interest income, net214,716  349,143  47,854  488,170  951,369  130,396 
    Share of results of equity investees13,187  12,753  1,748  44,657  27,228  3,732 
    Impairment loss for equity investments accounted for equity method-  (6,182) (847) -  (6,182) (847)
    Fair value changes in investments, net(38,545) 1,187  163  (378,497) 74,193  10,169 
    Impairment loss for equity investments accounted for using Measurement Alternative(240,870) (2,882) (395) (491,872) (12,195) (1,671)
    Foreign currency exchange income (loss)(151,951) 96,336  13,204  (192,693) 80,503  11,034 
    Other income, net143,485  309,914  42,477  1,040,133  1,037,197  142,160 
    Income (loss) before income tax expense1,155,688   1,671,527   229,101   (710,399) 7,122,300   976,197  
    Income tax expense(439,540) (501,237) (68,700) (1,058,795) (1,902,759) (260,795)
    Net income (loss) 716,148   1,170,290   160,401   (1,769,194) 5,219,541   715,402  


    KE Holdings Inc.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Continued)
    (All amounts in thousands, except for share, per share data, ADS and per ADS data)
     
     For the Three Months Ended  For the Nine Months Ended
     September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		  September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		 
     RMB  RMB  US$  RMB  RMB  US$ 
                
    Net loss (income) attributable to non-controlling interests shareholders7,040  (12,248) (1,679) 6,088  (5,922) (812)
    Net income (loss) attributable to KE Holdings Inc.723,188   1,158,042   158,722   (1,763,106) 5,213,619   714,590  
    Net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders723,188   1,158,042   158,722   (1,763,106) 5,213,619   714,590  
                
    Net income (loss)716,148   1,170,290   160,401   (1,769,194) 5,219,541   715,402  
    Currency translation adjustments1,682,372  (180,974) (24,805) 3,081,267  712,745  97,690 
    Unrealized loss on available-for-sale investments, net of reclassification(187,637) (49,243) (6,749) (497,030) (50,267) (6,890)
    Total comprehensive income 2,210,883   940,073   128,847   815,043   5,882,019   806,202  
    Comprehensive loss (income) attributable to non-controlling interests shareholders7,040  (12,248) (1,679) 6,088  (5,922) (812)
    Comprehensive income attributable to KE Holdings Inc.2,217,923   927,825   127,168   821,131   5,876,097   805,390  
    Comprehensive income attributable to KE Holdings Inc.’s ordinary shareholders2,217,923   927,825   127,168   821,131   5,876,097   805,390  


    KE Holdings Inc.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Continued)
    (All amounts in thousands, except for share, per share data, ADS and per ADS data)
     
     For the Three Months Ended For the Nine Months Ended
     September 30,
    2022    		 September 30,
    2023    		 September 30,
    2023    		 September 30,
    2022    		  September 30,
    2023    		 September 30,
    2023
     RMB RMB US$ RMB  RMB US$
                
    Weighted average number of ordinary shares used in computing net income (loss) per share, basic and diluted           
    —Basic3,577,393,051 3,491,785,849 3,491,785,849 3,571,697,160  3,527,781,652 3,527,781,652
    —Diluted3,624,210,190 3,569,150,049 3,569,150,049 3,571,697,160  3,612,305,297 3,612,305,297
                
    Weighted average number of ADS used in computing net income (loss) per ADS, basic and diluted           
    —Basic1,192,464,350 1,163,928,616 1,163,928,616 1,190,565,720  1,175,927,217 1,175,927,217
    —Diluted1,208,070,063 1,189,716,683 1,189,716,683 1,190,565,720  1,204,101,766 1,204,101,766
                
    Net income (loss) per share attributable to KE Holdings Inc.'s ordinary shareholders           
    —Basic0.20 0.33 0.05 (0.49) 1.48 0.20
    —Diluted0.20 0.32 0.04 (0.49) 1.44 0.20
                
    Net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders           
    —Basic0.61 0.99 0.14 (1.48) 4.43 0.61
    —Diluted0.60 0.97 0.13 (1.48) 4.33 0.59
                
    (1) Includes share-based compensation expenses as follows:  
    Cost of revenues90,250 136,990 18,776 265,635  363,556 49,829
    Sales and marketing expenses29,994 51,637 7,077 89,553  129,118 17,697
    General and administrative expenses562,091 576,635 79,035 1,110,123  1,765,532 241,987
    Research and development expenses60,276 48,867 6,698 234,759  138,905 19,038
                


    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 Nine Months Ended
     September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		  September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		 
     RMB  RMB  US$  RMB  RMB  US$ 
                
    Income (loss) from operations1,215,666  911,258  124,897  (1,220,297) 4,970,187  681,224 
    Share-based compensation expenses742,611  814,129  111,586  1,700,070  2,397,111  328,551 
    Amortization of intangible assets resulting from acquisitions and business cooperation agreement149,923  155,495  21,312  412,382  458,268  62,811 
    Impairment of goodwill, intangible assets and other long-lived assets-  5,201  713  76,244  37,976  5,205 
    Adjusted income from operations2,108,200  1,886,083  258,508  968,399  7,863,542  1,077,791 
                
    Net income (loss) 716,148  1,170,290  160,401  (1,769,194) 5,219,541  715,402 
    Share-based compensation expenses742,611  814,129  111,586  1,700,070  2,397,111  328,551 
    Amortization of intangible assets resulting from acquisitions and business cooperation agreement149,923  155,495  21,312  412,382  458,268  62,811 
    Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration44,972  11,720  1,606  397,195  (26,861) (3,682)
    Impairment of goodwill, intangible assets and other long-lived assets-  5,201  713  76,244  37,976  5,205 
    Impairment of investments240,870  9,064  1,242  491,872  18,377  2,519 
    Tax effects on non-GAAP adjustments(6,561) (6,560) (899) (12,391) (19,682) (2,698)
    Adjusted net income 1,887,963  2,159,339  295,961  1,296,178  8,084,730  1,108,108 
                
    Net income (loss) 716,148  1,170,290  160,401  (1,769,194) 5,219,541  715,402 
    Income tax expense439,540  501,237  68,700  1,058,795  1,902,759  260,795 
    Share-based compensation expenses742,611  814,129  111,586  1,700,070  2,397,111  328,551 
    Amortization of intangible assets154,330  158,893  21,778  425,836  468,807  64,255 
    Depreciation of property, plant and equipment219,214  193,791  26,561  687,262  578,606  79,305 
    Interest income, net(214,716) (349,143) (47,854) (488,170) (951,369) (130,396)
    Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration44,972  11,720  1,606  397,195  (26,861) (3,682)
    Impairment of goodwill, intangible assets and other long-lived assets-  5,201  713  76,244  37,976  5,205 
    Impairment of investments240,870  9,064  1,242  491,872  18,377  2,519 
    Adjusted EBITDA2,342,969  2,515,182  344,733  2,579,910  9,644,947  1,321,954 
                
    Net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders723,188  1,158,042  158,722  (1,763,106) 5,213,619  714,590 
    Share-based compensation expenses742,611  814,129  111,586  1,700,070  2,397,111  328,551 
    Amortization of intangible assets resulting from acquisitions and business cooperation agreement149,923  155,495  21,312  412,382  458,268  62,811 
    Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration44,972  11,720  1,606  397,195  (26,861) (3,682)
    Impairment of goodwill, intangible assets and other long-lived assets-  5,201  713  76,244  37,976  5,205 
    Impairment of investments240,870  9,064  1,242  491,872  18,377  2,519 
    Tax effects on non-GAAP adjustments(6,561) (6,560) (899) (12,391) (19,682) (2,698)
    Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders(7) (7) (1) (21) (21) (3)
    Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders1,894,996  2,147,084  294,281  1,302,245  8,078,787  1,107,293 


    KE Holdings Inc.
    UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS (Continued)
    (All amounts in thousands, except for share, per share data, ADS and per ADS data)
     
     For the Three Months Ended  For the Nine Months Ended
     September 30,
    2022    		 September 30,
    2023    		 September 30,
    2023    		 September 30,
    2022    		  September 30,
    2023    		 September 30,
    2023
     RMB RMB US$ RMB  RMB US$
                
    Weighted average number of ADS used in computing net income (loss) per ADS, basic and diluted           
    —Basic1,192,464,350 1,163,928,616 1,163,928,616 1,190,565,720  1,175,927,217 1,175,927,217
    —Diluted1,208,070,063 1,189,716,683 1,189,716,683 1,190,565,720  1,204,101,766 1,204,101,766
                
    Weighted average number of ADS used in calculating adjusted net income (loss) per ADS, basic and diluted           
    —Basic1,192,464,350 1,163,928,616 1,163,928,616 1,190,565,720  1,175,927,217 1,175,927,217
    —Diluted1,208,070,063 1,189,716,683 1,189,716,683 1,200,944,043  1,204,101,766 1,204,101,766
                
    Net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders           
    —Basic0.61 0.99 0.14 (1.48) 4.43 0.61
    —Diluted0.60 0.97 0.13 (1.48) 4.33 0.59
                
    Non-GAAP adjustments to net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders           
    —Basic0.98 0.85 0.12 2.57  2.44 0.33
    —Diluted0.97 0.83 0.11 2.56  2.38 0.33
                
    Adjusted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders           
    —Basic1.59 1.84 0.26 1.09  6.87 0.94
    —Diluted1.57 1.80 0.24 1.08  6.71 0.92


    KE Holdings Inc.
    UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
    (All amounts in thousands)
     
     For the Three Months Ended  For the Nine Months Ended
     September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		  September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		 
     RMB  RMB  US$  RMB  RMB  US$ 
                
    Net cash provided by operating activities2,005,528  1,956,650  268,183  5,813,559  9,388,339  1,286,777 
    Net cash provided by (used in) investing activities3,850,877  (15,323,257) (2,100,228) (7,487,442) (7,689,643) (1,053,952)
    Net cash used in financing activities(277,366) (2,614,917) (358,406) (241,494) (5,484,524) (751,716)
    Effect of exchange rate change on cash, cash equivalents and restricted cash(155,503) 164,808  22,589  (12,893) 186,945  25,623 
    Net increase (decrease) in cash and cash equivalents and restricted cash5,423,536   (15,816,716) (2,167,862) (1,928,270) (3,598,883) (493,268)
    Cash, cash equivalents and restricted cash at the beginning of the period19,380,403  37,812,092  5,182,579  26,732,209  25,594,259  3,507,985 
    Cash, cash equivalents and restricted cash at the end of the period24,803,939   21,995,376   3,014,717   24,803,939   21,995,376   3,014,717  


    KE Holdings Inc.
    UNAUDITED SEGMENT CONTRIBUTION MEASURE
    (All amounts in thousands)
     
     For the Three Months Ended  For the Nine Months Ended
     September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		  September 30,
    2022    		  September 30,
    2023    		  September 30,
    2023    		 
     RMB  RMB  US$  RMB  RMB  US$ 
    Existing home transaction services           
    Net revenues7,156,681  6,307,085  864,458  18,842,946  21,904,172  3,002,217 
    Less: Commission and compensation(3,857,541) (3,237,237) (443,700) (11,189,270) (11,407,196) (1,563,486)
    Contribution3,299,140  3,069,848  420,758  7,653,676  10,496,976  1,438,731 
                
    New home transaction services           
    Net revenues7,792,812  5,901,966  808,932  20,369,105  23,001,680  3,152,643 
    Less: Commission and compensation(5,848,758) (4,418,771) (605,643) (15,773,900) (16,880,830) (2,313,710)
    Contribution1,944,054  1,483,195  203,289  4,595,205  6,120,850  838,933 
                
    Home renovation and furnishing           
    Net revenues1,845,900  3,176,739  435,408  2,952,816  7,209,569  988,154 
    Less: Material costs, commission and compensation costs(1,303,785) (2,252,251) (308,697) (2,094,831) (5,077,310) (695,903)
    Contribution542,115  924,488  126,711  857,985  2,132,259  292,251 
                
    Emerging and other services           
    Net revenues801,189  2,424,915  332,362  1,756,772  5,457,285  747,983 
    Less: Commission and compensation(597,570) (1,812,143) (248,375) (1,127,428) (4,153,345) (569,264)
    Contribution203,619  612,772  83,987  629,344  1,303,940  178,719 


    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, 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 39,713 as of September 30, 2022.
    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 372,718 as of September 30, 2022.
    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. 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 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.

     


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