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KE Holdings Inc. Announces Fourth Quarter and Fiscal Year 2022 Unaudited Financial Results

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 fourth quarter and fiscal year ended December 31, 2022.

Business and Financial Highlights for the Fourth Quarter and Fiscal Year 2022

  • Gross transaction value (GTV)1 in 2022 was RMB2,609.6 billion (US$378.4 billion), a decrease of 32.3% year-over-year. GTV of existing home transactions was RMB1,576.5 billion (US$228.6 billion), a decrease of 23.4% year-over-year. GTV of new home transactions was RMB940.5 billion (US$136.4 billion), a decrease of 41.5% year-over-year. GTV of home renovation and furnishing was RMB5.4 billion (US$0.8 billion), compared to RMB213 million in 2021. GTV of emerging and other services was RMB87.3 billion (US$12.7 billion), a decrease of 53.2% year-over-year.

    In the fourth quarter of 2022, GTV was RMB647.0 billion (US$93.8 billion), a decrease of 11.7% year-over-year. GTV of existing home transactions was RMB359.9 billion (US$52.2 billion), an increase of 1.5% year-over-year. GTV of new home transactions was RMB263.5 billion (US$38.2 billion), a decrease of 26.1% year-over-year. GTV of home renovation and furnishing was RMB2.0 billion (US$0.3 billion), compared to RMB61 million in the same period of 2021. GTV of emerging and other services was RMB21.7 billion (US$3.1 billion), an increase of 3.5% year-over-year.
  • Net revenues in 2022 were RMB60.7 billion (US$8.8 billion), a decrease of 24.9% year-over-year.

    In the fourth quarter of 2022, net revenues were RMB16.7 billion (US$2.4 billion), a decrease of 5.8% year-over-year.
  • Net loss in 2022 was RMB1,397 million (US$203 million), compared to net loss of RMB525 million in 2021. Adjusted net income2 in 2022 was RMB2,843million (US$412 million), compared to adjusted net income of RMB2,294 million in 2021.

    In the fourth quarter of 2022, net income was RMB372 million (US$54 million), compared to net loss of RMB933 million in the same period of 2021. Adjusted net income was RMB1,547 million (US$224 million), compared to adjusted net income of RMB42 million in the same period of 2021.
  • Number of stores was 40,516 as of December 31, 2022, a 20.6% decrease from one year ago. Number of active stores3 was 37,446 as of December 31, 2022, a 17.4% decrease from one year ago.
  • Number of agents was 394,020 as of December 31, 2022, a 13.3% decrease from one year ago. Number of active agents4 was 349,681 as of December 31, 2022, a 14.0% decrease from one year ago.
  • Mobile monthly active users (MAU)5 averaged 36.6 million in the fourth quarter of 2022, compared to 37.4 million in the same period of 2021.

Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, commented, “Amid the challenging housing market in 2022, we underwent a strategic transformation from high-speed to high-quality growth, which not only enabled us to continue outperforming the market in GTV growth and cultivate new growth engines, such as home renovation and furnishing, but also delivered contribution margin expansion in both our existing and new home transaction services in 2022.”

“In the fourth quarter, our GTV of existing home transactions increased year-over-year against the prevailing market decline, as we drove more value for users through our effective ACN and fostered the development of high-quality stores and agents by providing effective tools such as better lead allocation and stringent ecosystem governance. In the new home market, alongside our successful “Commission in Advance” program, we actively promoted sales conversions while increasing the contribution from our collaborations with state-owned developers. The combined effect of these initiatives drove strong results without sacrificing operational and financial safety in exchange for growth. Our home renovation and furnishing business also outpaced the industry, led by the strength of our full-service model, strong traffic referrals from our core business, rapid increase in home furnishing sales, and solid improvement in the infrastructure that we built to support quality delivery.”

“The measures that we enacted in 2022 have expanded our revenue streams, lowered our expenses and reduced our risks, enabling us to be more efficient, more diversified, and healthier. With active real estate policy support and signs of market recovery, we are poised to bring further value to our customers, service providers, and China’s broader housing industry in 2023. In the meantime, we will adhere to our long-term approach and a market-neutral view, striving to transcend the short-term fluctuations and grow inclusively and sustainably,” concluded Mr. Peng.

Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike, added, “For the whole year of 2022, the market and our business experienced a wide range of challenges from the COVID-19 pandemic to spillover risks of developers. Facing the predicament, we took forceful actions to prioritize cost management and efficiency optimization, maximizing the value of our platform to improve the retention and acquisition of high-quality service providers. We achieved net revenues of RMB60.7 billion, down by 24.9% year-over-year, a smaller contraction compared with the decline of the market. Moreover, we reported notable improvements in multiple financial metrics, including contribution margin for both existing and new home transaction services, gross margin and adjusted net income, as well as a stronger free cash flow, demonstrating our successful shift of focus from high-speed to high-quality growth, and further strengthening our leading position in the market. As we look ahead into 2023, the advancement of our “One body, two wings” strategy will drive more diversified development and have higher requirements for operational stability and profitability. As such, with the optimized costs and expenses structure that we built in 2022, we will aim to maintain a dynamic balance among efficiency, risk management and scale expansion, to support our sustained business growth and improvement of service quality.”

Fourth Quarter 2022 Financial Results

Net Revenues

Net revenues decreased by 5.8% to RMB16.7 billion (US$2.4 billion) in the fourth quarter of 2022 from RMB17.8 billion in the same period of 2021, with total GTV declining by 11.7% to RMB647.0 billion (US$93.8 billion) in the fourth quarter of 2022 from RMB732.4 billion in the same period of 2021, which was primarily attributable to the decline in GTV of existing home transactions in top-tier cities and new home transactions, due to the disruption to China’s housing market recovery by COVID-19 flare-ups and soft market sentiment towards new home sales. The decrease of net revenues was partially offset by the increase of net revenues from home renovation and furnishing.

  • Net revenues from existing home transaction services decreased by 11.8% to RMB5.3 billion (US$0.8 billion) in the fourth quarter of 2022, compared to RMB6.0 billion in the same period of 2021, primarily due 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 increased by 1.5% to RMB359.9 billion (US$52.2 billion) in the fourth quarter of 2022 from RMB354.6 billion in the same period of 2021, primarily attributable to the increase of GTV served by connected agents on the Company’s platform, which was partially offset by the decrease of GTV served by Lianjia brand year-over-year. The different trend between net revenues and GTV of existing home transaction services 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 16.6% to RMB4.4 billion (US$0.6 billion) in the fourth quarter of 2022 from RMB5.3 billion in the same period of 2021, primarily due to a decrease in GTV of existing home transactions served by Lianjia stores of 17.2% to RMB161.4 billion (US$23.4 billion) in the fourth quarter of 2022 from RMB194.9 billion in the same period of 2021, resulting from the surge of COVID-19 cases especially in top-tier cities during the fourth quarter 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 25.2% to RMB0.9 billion (US$0.1 billion) in the fourth quarter of 2022, from RMB0.7 billion in the same period of 2021, mainly due to a 24.3% increase of GTV of existing home transactions served by connected agents on the Company’s platform to RMB198.5 billion (US$28.8 billion) in the fourth quarter of 2022 from RMB159.7 billion in the same period of 2021, which was primarily due to recovery for existing home sales market in certain second-tier cities along with more supportive policies, and a relatively low base in the same period of 2021.



  • Net revenues from new home transaction services decreased by 26.8% to RMB8.3 billion (US$1.2 billion) in the fourth quarter of 2022 from RMB11.3 billion in the same period of 2021, primarily due to the decrease of GTV of new home transactions of 26.1% to RMB263.5 billion (US$38.2 billion) in the fourth quarter of 2022 from RMB356.8 billion in the same period of 2021. 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 28.4% to RMB212.3 billion (US$30.8 billion), compared to RMB296.4 billion in the same period of 2021, while the GTV of new home transactions served by Lianjia brand decreased by 15.1% to RMB51.3 billion (US$7.4 billion) in the fourth quarter of 2022, compared to RMB60.4 billion in the same period of 2021.



  • Net revenues from home renovation and furnishing were RMB2.1 billion (US$0.3 billion) in the fourth quarter of 2022, compared to RMB58 million in the same period of 2021, primarily because the Company completed the acquisition (“Shengdu Acquisition”) of Shengdu Home Renovation Co., Ltd. (“Shengdu”), a full-service home renovation service provider in China, and began to consolidate its financial results during the second quarter of 2022 and the organic growth of the GTV for home renovation and furnishing business.



  • Net revenues from emerging and other services increased by 152.0% to RMB1.1 billion (US$0.2 billion) in the fourth quarter of 2022 from RMB0.4 billion in the same period of 2021, primarily attributable to the increase of net revenues from rental property management services and financial services.

Cost of Revenues

Total cost of revenues decreased by 14.9% to RMB12.7 billion (US$1.8 billion) in the fourth quarter of 2022 from RMB14.9 billion in the same period of 2021.

  • Commission - split. The Company’s cost of revenues for commissions to connected agents and other sales channels was RMB6.0 billion (US$0.9 billion) in the fourth quarter of 2022, compared to RMB7.7 billion in the same period of 2021, primarily due to the decrease in GTV of new home transactions completed through connected agents and other sales channels in the fourth quarter of 2022 compared with the same period of 2021.
  • Commission and compensation - internal. The Company’s cost of revenues for internal commission and compensation was RMB4.2 billion (US$0.6 billion) in the fourth quarter of 2022, compared to RMB5.4 billion in the same period of 2021, primarily due to the decrease in the fixed compensation costs of Lianjia agents, dedicated sales team with the expertise on new home transaction services and other front line operation staff along with the drop in the headcount, and the decrease in variable commission as a result of the decreased GTV of existing home transactions and new home transactions completed through Lianjia agents.
  • Cost of home renovation and furnishing. The Company’s cost of revenues for home renovation and furnishing was RMB1.5 billion (US$0.2 billion) in the fourth quarter of 2022, compared to RMB61 million in the same period of 2021, which was primarily attributable to Shengdu Acquisition and the organic increase of net revenues from home renovation and furnishing.
  • Cost related to stores. The Company’s cost related to stores decreased by 26.1% to RMB0.8 billion (US$0.1 billion) in the fourth quarter of 2022 compared to RMB1.0 billion in the same period of 2021, mainly due to the decrease in the number of Lianjia stores along with market downtrend in the fourth quarter of 2022 compared to the same period of 2021.
  • Other costs. The Company’s other costs decreased to RMB0.2 billion (US$23 million) in the fourth quarter of 2022 from RMB0.6 billion in the same period of 2021, mainly due to a decrease of business taxes and surcharges along with the decrease of net revenues, the decreased funding costs and the decreased human resources related costs.

Gross Profit

Gross profit increased by 40.4% to RMB4.1 billion (US$0.6 billion) in the fourth quarter of 2022 from RMB2.9 billion in the same period of 2021. Gross margin was 24.4% in the fourth quarter of 2022, compared to 16.4% in the same period of 2021. The increase in gross margin was primarily due to: a) a shift of revenue mix towards the existing home transaction services and home renovation and furnishing with relatively higher contribution margins than new home transaction services; b) a higher contribution margin for existing home transaction services led by the decreased fixed compensation costs for Lianjia agents along with the decreased number of Lianjia agents; c) a higher contribution margin for new home transaction services as a result of an increased number of projects with higher margins, and a relatively lower percentage of fixed compensation costs of net revenues from new home transaction services; and d) a relatively lower percentage of costs related to stores and other costs of net revenues in the fourth quarter of 2022 compared to the same period of 2021.

Income (Loss) from Operations

Total operating expenses decreased by 9.6% to RMB3.7 billion (US$0.5 billion) in the fourth quarter of 2022 from RMB4.1 billion in the same period of 2021.

  • General and administrative expenses decreased by 18.6% to RMB1,792 million (US$260 million) in the fourth quarter of 2022 from RMB2,202 million in the same period of 2021, mainly due to the decrease of provision for credit loss along with the decreased accounts receivable balance and the decrease of personnel costs and overheads along with the reduction of the headcount, which was partially offset by the increase of share-based compensation in the fourth quarter of 2022 compared to the same period of 2021.
  • Sales and marketing expenses were RMB1,333 million (US$193 million) in the fourth quarter of 2022, compared to RMB809 million in the same period of 2021, mainly due to the increase in sales and marketing expenses for home renovation and furnishing services as the financial results of Shengdu were consolidated since the second quarter of 2022.
  • Research and development expenses decreased by 31.1% to RMB509 million (US$74 million) in the fourth quarter of 2022 from RMB738 million in the same period of 2021, mainly due to the decrease of personnel costs and share-based compensation as a result of decreased headcount in research and development personnel in the fourth quarter of 2022 compared to the same period of 2021.

Income from operations was RMB387 million (US$56 million) in the fourth quarter of 2022, compared to loss from operations of RMB1,184 million in the same period of 2021. Operating margin was 2.3% in the fourth quarter of 2022, compared to negative 6.7% in the same period of 2021, primarily due to: a) a relatively higher gross profit margin, and b) improved operating leverage, primarily due to personnel severance in the first half of 2022 and optimized resource utilization in the fourth quarter of 2022 compared to the same period of 2021.

Adjusted income from operations6 was RMB1,339 million (US$194 million) in the fourth quarter of 2022, compared to adjusted loss from operations of RMB398 million in the same period of 2021. Adjusted operating margin7 was 8.0% in the fourth quarter of 2022, compared to negative 2.2% in the same period of 2021. Adjusted EBITDA8 was RMB2,164 million (US$314 million) in the fourth quarter of 2022, compared to RMB484 million in the same period of 2021.

Net Income (Loss)

Net income was RMB372 million (US$54 million) in the fourth quarter of 2022, compared to net loss of RMB933 million in the same period of 2021.

Adjusted net income was RMB1,547 million (US$224 million) in the fourth quarter of 2022, compared to RMB42 million in the same period of 2021.

Net Income (Loss) attributable to KE Holdings Inc.’s ordinary shareholders

Net income attributable to KE Holdings Inc.’s ordinary shareholders was RMB377 million (US$55 million) in the fourth quarter of 2022, compared to net loss attributable to KE Holdings Inc.’s ordinary shareholders of RMB930 million in the same period of 2021.

Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders9 was RMB1,552 million (US$225 million) in the fourth quarter of 2022, compared to RMB45 million in the same period of 2021.

Net Income (Loss) per ADS

Basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders10 were RMB0.32 (US$0.05) and RMB0.31 (US$0.04) in the fourth quarter of 2022, respectively, compared to RMB0.78 for both basic and diluted net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders in the same period of 2021.

Adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders11 were RMB1.31 (US$0.19) and RMB1.29 (US$0.18) in the fourth quarter of 2022, respectively, compared to RMB0.04 for both adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders in the same period of 2021.

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

As of December 31, 2022, the combined balance of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB61.1 billion (US$8.9 billion).

Fiscal Year 2022 Financial Results

Net Revenues

Net revenues decreased by 24.9% to RMB60.7 billion (US$8.8 billion) in 2022, compared to RMB80.8 billion in 2021. The decrease was primarily attributable to the decline in the total GTV by 32.3% to RMB2,609.6 billion (US$378.4 billion) in 2022 from RMB3,853.5 billion in 2021 due to soft market sentiment and the disruption of the resurgences to the Company’s operations caused by COVID-19 in 2022.

  • Net revenues from existing home transaction services decreased by 24.5% to RMB24.1 billion (US$3.5 billion) in 2022, compared to RMB31.9 billion in 2021, primarily due to a 23.4% decrease in GTV of existing home transactions to RMB1,576.5 billion (US$228.6 billion) in 2022 from RMB2,058.2 billion in 2021.



    Among that, (i) commission revenue decreased by 27.3% to RMB20.6 billion (US$3.0 billion) in 2022 from RMB28.4 billion in 2021, primarily due to a decrease in GTV of existing home transactions served by Lianjia stores of 27.9% to RMB746.4 billion (US$108.2 billion) in 2022 from RMB1,034.8 billion in 2021; and



    (ii) revenues derived from platform service, franchise service and other value-added services decreased by 2.5% to RMB3.5 billion (US$0.5 billion) in 2022 from RMB3.6 billion in 2021, as the GTV of existing home transactions served by connected agents on the Company’s platform decreased by 18.9% to RMB830.1 billion (US$120.3 billion) in 2022 from RMB1,023.4 billion in 2021, which was partially offset by a moderate increase in existing home transaction commission rate charged by connected stores and the increased penetration level of value-added services.



  • Net revenues from new home transaction services decreased by 38.3% to RMB28.7 billion (US$4.2 billion) in 2022 from RMB46.5 billion in 2021, primarily due to the decrease of GTV of new home transactions of 41.5% to RMB940.5 billion (US$136.4 billion) in 2022 from RMB1,608.6 billion in 2021. 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 42.3% year-over-year to RMB770.5 billion (US$111.7 billion) from RMB1,334.6 billion in 2021, while the GTV of new home transactions served by Lianjia brand decreased by 38.0% year-over-year to RMB170.0 billion (US$24.6 billion) from RMB274.1 billion in 2021.



  • Net revenues from home renovation and furnishing were RMB5.0 billion (US$0.7 billion) in 2022, compared to RMB197 million in 2021, primarily because the Company completed the acquisition of Shengdu, and began to consolidate its financial results during the second quarter of 2022 and the organic growth of the GTV for home renovation and furnishing business.



  • Net revenues from emerging and other services increased by 33.4% to RMB2.8 billion (US$0.4 billion) in 2022 from RMB2.1 billion in 2021, primarily attributable to the increase of net revenues from rental property management services which was partially offset by the decrease of net revenues from financial services.

Cost of Revenues

Total cost of revenues decreased by 27.8% to RMB46.9 billion (US$6.8 billion) in 2022 from RMB64.9 billion in 2021, primarily due to the decrease in both split commissions to connected agents and other sales channels, and internal commission and compensation.

  • Commission - split. The Company’s cost of revenues for commissions to connected agents and other sales channels decreased by 35.2% to RMB20.5 billion (US$3.0 billion) in 2022 from RMB31.6 billion in 2021, primarily due to the decrease in the GTV of new home transactions completed through connected agents and other sales channels in 2022 compared to 2021.
  • Commission and compensation - internal. The Company’s cost of revenues for internal commission and compensation decreased by 32.1% to RMB17.9 billion (US$2.6 billion) in 2022 from RMB26.3 billion in 2021, primarily due to the decrease in the fixed compensation costs of Lianjia agents, dedicated sales team with the expertise on new home transaction services and other front line operation staff along with the drop in the headcount, and the decrease in variable commission as a result of the decreased GTV of existing home transactions completed through Lianjia agents 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 was RMB3.6 billion (US$0.5 billion) in 2022, compared to RMB0.2 billion in 2021, which was primarily attributable to Shengdu Acquisition and the organic increase of net revenues from home renovation and furnishing.
  • Cost related to stores. The Company’s cost related to stores decreased by 12.2% to RMB3.3 billion (US$0.5 billion) in 2022 compared to RMB3.8 billion in 2021, mainly due to the decrease in the number of Lianjia stores along with market downtrend in 2022 compared to 2021.
  • Other costs. The Company’s other costs decreased by 45.6% to RMB1.6 billion (US$0.2 billion) in 2022 from RMB3.0 billion in 2021, mainly due to a decrease of business taxes and surcharges along with the decrease of net revenues, the decreased funding costs and provisions related to financial services and the decreased offline activities costs.

Gross Profit

Gross profit decreased by 12.9% to RMB13.8 billion (US$2.0 billion) in 2022 from RMB15.8 billion in 2021. Gross margin was 22.7% in 2022, compared to 19.6% in 2021. The increase in gross margin was primarily due to: a) a shift of revenue mix towards the existing home transaction services and home renovation and furnishing with relatively higher contribution margins than new home transaction services, b) a higher contribution margin for existing home transaction services led by the decreased fixed compensation costs for Lianjia agents along with the decreased number of Lianjia agents, and c) a higher contribution margin for new home transaction services as a result of an increased number of projects with higher margins, and a relatively lower percentage of fixed compensation costs of net revenues from new home transaction services.

Income (Loss) from Operations

Total operating expenses decreased by 14.9% to RMB14.6 billion (US$2.1 billion) in 2022 from RMB17.2 billion in 2021.

  • General and administrative expenses decreased by 17.7% to RMB7.3 billion (US$1.1 billion) in 2022 from RMB8.9 billion in 2021, mainly due to the decrease of provision for credit loss along with the decreased accounts receivable balance and the decrease of personnel costs and overheads along with the reduction of the headcount, which was partially offset by the increase of share-based compensation in 2022 compared to 2021.
  • Sales and marketing expenses were RMB4.6 billion (US$0.7 billion) in 2022, compared to RMB4.3 billion in 2021, mainly due to the increase in sales and marketing expenses for home renovation and furnishing services as the financial results of Shengdu were consolidated since the second quarter of 2022, which was partially offset by the decrease of the brand advertising and promotional marketing expenses and personnel costs for housing transaction services.
  • Research and development expenses decreased by 20.3% to RMB2.5 billion (US$0.4 billion) in 2022 from RMB3.2 billion in 2021, mainly due to the decrease of personnel costs and share-based compensation as a result of decreased headcount in research and development personnel in 2022 compared to 2021.

Loss from operations was RMB833 million (US$121 million) in 2022, compared to loss from operations of RMB1.4 billion in 2021. Operating margin was negative 1.4% in 2022, compared to negative 1.7% in 2021, primarily due to a relatively higher gross profit margin, which was partially offset by the increased spending in home renovation and furnishing and emerging and other services in 2022 compared to 2021.

Adjusted income from operations was RMB2.3 billion (US$0.3 billion) in 2022, compared to RMB1.4 billion in 2021. Adjusted operating margin was 3.8% in 2022, compared to 1.7% in 2021. Adjusted EBITDA was RMB4.7 billion (US$0.7 billion) in 2022, compared to RMB4.5 billion in 2021.

Net Income (Loss)

Net loss was RMB1,397 million (US$203 million) in 2022, compared to RMB525 million in 2021.

Adjusted net income was RMB2,843 million (US$412 million) in 2022, compared to RMB2,294 million in 2021.

Net Income (Loss) attributable to KE Holdings Inc.’s ordinary shareholders

Net loss attributable to KE Holdings Inc.’s ordinary shareholders was RMB1,386 million (US$201 million) in 2022, compared to RMB524 million in 2021.

Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders was RMB2,854 million (US$414 million) in 2022, compared to RMB2,295 million in 2021.

Net Income (Loss) per ADS

Basic and diluted net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders were both RMB1.17 (US$0.17) in 2022, compared to RMB0.44 for both basic and diluted net loss per ADS attributable to KE Holdings Inc.’s ordinary shareholders in 2021.

Adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders were RMB2.40 (US$0.35) and RMB2.38 (US$0.34) in 2022, respectively, compared to adjusted basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders of RMB1.94 and RMB1.92 in 2021, respectively.

Business Outlook

For the first quarter of 2023, the Company expects total net revenues to be between RMB18.0 billion (US$2.6 billion) and RMB18.5 billion (US$2.7 billion), representing an increase of approximately 43.4% to 47.4% from the same quarter of 2022. This forecast considers the potential impact of the recent real estate related policies and measures, all of which remain uncertain and may continue to affect the Company’s operations. Therefore, the Company’s ongoing and preliminary view are contingent on the business situation and market condition.

Share Repurchase Program

As previously disclosed, the Company established a share repurchase program under which the Company may purchase up to US$1 billion of its Class A ordinary shares and/or ADSs over a 12-month period. From the launch of the share repurchase program on September 1, 2022 to December 31, 2022, the Company in aggregate purchased approximately 14.2 million ADSs in the open market at a total consideration of approximately US$191 million pursuant to the share repurchase program, certain of which were settled in early January 2023.

Conference Call Information

The Company will hold an earnings conference call at 8:00 A.M. U.S. Eastern Time on Thursday, March 16, 2023 (8:00 P.M. Beijing/Hong Kong Time on Thursday, March 16, 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: https://s1.c-conf.com/diamondpass/10029216-ft4w0.html

A replay of the conference call will be accessible through March 23, 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:

   

10029216

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 RMB6.8972 to US$1.00, the noon buying rate in effect on December 30, 2022, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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 (benefit), (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) depreciation of property 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 housing customers efficiently navigate and complete housing transactions 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.

 

 

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share, per share data)

 

 

As of

December 31,

 

As of

December 31,

 

 

2021

 

2022

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

20,446,104

 

19,413,202

 

2,814,650

Restricted cash

 

6,286,105

 

6,181,057

 

896,169

Short-term investments

 

29,402,661

 

35,485,908

 

5,144,973

Short-term financing receivables, net of

allowance for credit losses of RMB131,558 and

RMB139,427 as of December 31, 2021 and 2022,

respectively

 

702,452

 

667,224

 

96,738

Accounts receivable and contract assets, net of allowance

for credit losses of RMB2,151,271, and RMB2,088,478

as of December 31, 2021 and 2022, respectively

 

9,324,952

 

4,163,022

 

603,581

Amounts due from and prepayments to related parties

 

591,342

 

405,956

 

58,858

Loan receivables from related parties

 

42,788

 

50,463

 

7,316

Prepayments, receivables and other assets

 

3,129,950

 

4,057,843

 

588,333

Total current assets

 

69,926,354

 

70,424,675

 

10,210,618

Non-current assets

 

 

 

 

 

 

Property and equipment, net

 

1,971,707

 

2,036,553

 

295,272

Right-of-use assets

 

7,244,211

 

11,284,070

 

1,636,036

Long-term financing receivables, net of

allowance for credit losses of RMB204 and nil as of

December 31, 2021 and 2022, respectively

 

10,039

 

-

 

-

Long-term investments, net

 

17,038,171

 

17,925,653

 

2,598,975

Intangible assets, net

 

1,141,273

 

1,686,976

 

244,589

Goodwill

 

1,805,689

 

4,934,235

 

715,397

Long-term loan receivables from related parties

 

-

 

22,934

 

3,325

Other non-current assets

 

1,181,421

 

1,032,251

 

149,663

Total non-current assets

 

30,392,511

 

38,922,672

 

5,643,257

TOTAL ASSETS

 

100,318,865

 

109,347,347

 

15,853,875

 
 

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

December 31,

 

 

2021

 

2022

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

6,008,765

 

5,843,321

 

847,202

Amounts due to related parties

 

584,078

 

425,685

 

61,719

Employee compensation and welfare payable

 

9,834,247

 

9,365,512

 

1,357,872

Customer deposits payable

 

4,181,337

 

4,194,828

 

608,193

Income taxes payable

 

567,589

 

542,290

 

78,625

Short-term borrowings

 

260,000

 

619,000

 

89,747

Lease liabilities current portion

 

2,752,795

 

4,972,345

 

720,922

Short-term funding debts

 

194,200

 

-

 

-

Contract liabilities

 

1,101,929

 

3,260,269

 

472,695

Accrued expenses and other current liabilities

 

3,451,197

 

4,118,068

 

597,063

Total current liabilities

 

28,936,137

 

33,341,318

 

4,834,038

Non-current liabilities

 

 

 

 

 

 

Deferred tax liabilities

 

22,920

 

351,186

 

50,917

Lease liabilities non-current portion

 

4,302,934

 

6,599,930

 

956,900

Other non-current liabilities

 

1,381

 

475

 

69

Total non-current liabilities

 

4,327,235

 

6,951,591

 

1,007,886

TOTAL LIABILITIES

 

33,263,372

 

40,292,909

 

5,841,924

 
 

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

December 31,

 

 

2021

 

2022

 

 

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, 885,301,280

Class B ordinary shares. 2,705,911,235 and

3,601,547,279 Class A ordinary shares issued and

outstanding as of December 31, 2021 and 2022,

respectively; and 885,301,280 and 156,426,896 Class B

ordinary shares issued and outstanding as of December

31, 2021 and 2022, respectively)

 

489

 

487

 

71

Treasury shares

 

-

 

(225,329)

 

(32,670)

Additional paid-in capital

 

78,972,169

 

80,302,956

 

11,642,834

Statutory reserves

 

483,887

 

660,817

 

95,809

Accumulated other comprehensive loss

 

(2,639,723)

 

(412,721)

 

(59,839)

Accumulated deficit

 

(9,842,846)

 

(11,405,850)

 

(1,653,693)

Total KE Holdings Inc. shareholders' equity

 

66,973,976

 

68,920,360

 

9,992,512

Non-controlling interests

 

81,517

 

134,078

 

19,439

TOTAL SHAREHOLDERS' EQUITY

 

67,055,493

 

69,054,438

 

10,011,951

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

100,318,865

 

109,347,347

 

15,853,875

 
 

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except for share, per share data, ADS and per ADS data)

 

 

For the Three Months Ended

 

For the Year Ended

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

Existing home transaction services

5,985,303

 

5,280,757

 

765,638

 

31,947,953

 

24,123,703

 

3,497,608

New home transaction services

11,309,748

 

8,281,269

 

1,200,671

 

46,472,378

 

28,650,374

 

4,153,914

Home renovation and furnishing

57,671

 

2,093,811

 

303,574

 

197,452

 

5,046,627

 

731,692

Emerging and other services

432,999

 

1,091,303

 

158,224

 

2,134,656

 

2,848,075

 

412,932

Total net revenues

17,785,721

 

16,747,140

 

2,428,107

 

80,752,439

 

60,668,779

 

8,796,146

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Commission-split

(7,740,832)

 

(6,030,785)

 

(874,382)

 

(31,633,827)

 

(20,499,632)

 

(2,972,167)

Commission and compensation-internal

(5,391,756)

 

(4,231,943)

 

(613,574)

 

(26,303,507)

 

(17,853,694)

 

(2,588,542)

Cost of home renovation and furnishing

(61,146)

 

(1,467,237)

 

(212,729)

 

(195,869)

 

(3,562,068)

 

(516,451)

Cost related to stores

(1,035,183)

 

(764,650)

 

(110,864)

 

(3,809,757)

 

(3,346,436)

 

(485,188)

Others

(641,542)

 

(159,567)

 

(23,134)

 

(2,990,064)

 

(1,626,202)

 

(235,776)

Total cost of revenues(1)

(14,870,459)

 

(12,654,182)

 

(1,834,683)

 

(64,933,024)

 

(46,888,032)

 

(6,798,124)

Gross profit

2,915,262

 

4,092,958

 

593,424

 

15,819,415

 

13,780,747

 

1,998,022

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing expenses(1)

(809,090)

 

(1,332,765)

 

(193,233)

 

(4,309,116)

 

(4,573,382)

 

(663,078)

General and administrative expenses(1)

(2,202,486)

 

(1,792,326)

 

(259,863)

 

(8,924,470)

 

(7,346,665)

 

(1,065,167)

Research and development expenses(1)

(738,118)

 

(508,663)

 

(73,749)

 

(3,193,988)

 

(2,545,549)

 

(369,070)

Impairment of goodwill, intangible assets and other long-lived assets

(349,639)

 

(71,813)

 

(10,412)

 

(746,705)

 

(148,057)

 

(21,466)

Total operating expenses

(4,099,333)

 

(3,705,567)

 

(537,257)

 

(17,174,279)

 

(14,613,653)

 

(2,118,781)

Income (loss) from operations

(1,184,071)

 

387,391

 

56,167

 

(1,354,864)

 

(832,906)

 

(120,759)

Interest income, net

113,086

 

255,314

 

37,017

 

354,567

 

743,484

 

107,795

Share of results of equity investees

(8,286)

 

(69)

 

(10)

 

36,606

 

44,588

 

6,465

Fair value changes in investments, net

121,084

 

(133,728)

 

(19,389)

 

564,804

 

(512,225)

 

(74,266)

Impairment loss for equity investments accounted for using Measurement Alternative

(183,789)

 

(100,004)

 

(14,499)

 

(183,789)

 

(591,876)

 

(85,814)

Foreign currency exchange gain (loss)

1,332

 

65,331

 

9,472

 

20,988

 

(127,362)

 

(18,466)

Other income, net

476,849

 

528,454

 

76,619

 

1,702,414

 

1,568,587

 

227,424

Income (loss) before income tax expense

(663,795)

 

1,002,689

 

145,377

 

1,140,726

 

292,290

 

42,379

Income tax expense

(269,469)

 

(630,779)

 

(91,454)

 

(1,665,492)

 

(1,689,574)

 

(244,965)

Net income (loss)

(933,264)

 

371,910

 

53,923

 

(524,766)

 

(1,397,284)

 

(202,586)

 
 

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS 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 Year Ended

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests shareholders

3,582

 

5,122

 

743

 

637

 

11,210

 

1,625

Net income (loss) attributable to KE Holdings Inc.

(929,682)

 

377,032

 

54,666

 

(524,129)

 

(1,386,074)

 

(200,961)

Net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders

(929,682)

 

377,032

 

54,666

 

(524,129)

 

(1,386,074)

 

(200,961)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

(933,264)

 

371,910

 

53,923

 

(524,766)

 

(1,397,284)

 

(202,586)

Currency translation adjustments

(561,546)

 

(479,196)

 

(69,477)

 

(841,214)

 

2,602,071

 

377,265

Unrealized gains (losses) on available-for-sale investments, net of reclassification

42,864

 

121,961

 

17,683

 

35,578

 

(375,069)

 

(54,380)

Total comprehensive income (loss)

(1,451,946)

 

14,675

 

2,129

 

(1,330,402)

 

829,718

 

120,299

Comprehensive loss attributable to non-controlling interests shareholders

3,582

 

5,122

 

743

 

637

 

11,210

 

1,625

Comprehensive income (loss) attributable to KE Holdings Inc.

(1,448,364)

 

19,797

 

2,872

 

(1,329,765)

 

840,928

 

121,924

Comprehensive income (loss) attributable to KE Holdings Inc.’s ordinary shareholders

(1,448,364)

 

19,797

 

2,872

 

(1,329,765)

 

840,928

 

121,924

 
 
 

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS 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 Year Ended

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

 US$

 

Weighted average number of ordinary shares used in computing net income (loss) per share, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

3,559,476,683

 

3,551,773,024

 

3,551,773,024

 

3,549,121,628

 

3,569,179,079

 

3,569,179,079

—Diluted

3,559,476,683

 

3,604,626,158

 

3,604,626,158

 

3,549,121,628

 

3,569,179,079

 

3,569,179,079

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in computing net income (loss) per ADS, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

1,186,492,228

 

1,183,924,341

 

1,183,924,341

 

1,183,040,543

 

1,189,726,360

 

1,189,726,360

—Diluted

1,186,492,228

 

1,201,542,053

 

1,201,542,053

 

1,183,040,543

 

1,189,726,360

 

1,189,726,360

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to KE Holdings Inc.'s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

(0.26)

 

0.11

 

0.02

 

(0.15)

 

(0.39)

 

(0.06)

—Diluted

(0.26)

 

0.10

 

0.01

 

(0.15)

 

(0.39)

 

(0.06)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

(0.78)

 

0.32

 

0.05

 

(0.44)

 

(1.17)

 

(0.17)

—Diluted

(0.78)

 

0.31

 

0.04

 

(0.44)

 

(1.17)

 

(0.17)

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes share-based compensation expenses as follows:

 

Cost of revenues

 106,663

 

 91,209

 

13,224

 

 406,131

 

356,844

 

51,738

Sales and marketing expenses

 17,804

 

 31,843

 

4,617

 

 110,446

 

121,396

 

17,601

General and administrative expenses

 112,491

 

 549,632

 

79,689

 

 595,732

 

1,659,755

 

240,641

Research and development expenses

 82,877

 

 52,495

 

7,611

 

 425,978

 

287,254

 

41,648

 

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 Year Ended

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

(1,184,071)

 

387,391

 

56,167

 

(1,354,864)

 

(832,906)

 

(120,759)

Share-based compensation expenses

319,835

 

725,179

 

105,141

 

1,538,287

 

2,425,249

 

351,628

Amortization of intangible assets resulting from acquisitions and business cooperation agreement

116,869

 

154,504

 

22,401

 

470,179

 

566,886

 

82,191

Impairment of goodwill, intangible assets and other long-lived assets

349,639

 

71,813

 

10,412

 

746,705

 

148,057

 

21,466

Adjusted income (loss) from operations

(397,728)

 

1,338,887

 

194,121

 

1,400,307

 

2,307,286

 

334,526

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

(933,264)

 

371,910

 

53,923

 

(524,766)

 

(1,397,284)

 

(202,586)

Share-based compensation expenses

319,835

 

725,179

 

105,141

 

1,538,287

 

2,425,249

 

351,628

Amortization of intangible assets resulting from acquisitions and business cooperation agreement

116,869

 

154,504

 

22,401

 

470,179

 

566,886

 

82,191

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration

3,084

 

129,731

 

18,809

 

(124,416)

 

526,926

 

76,397

Impairment of goodwill, intangible assets and other long-lived assets

349,639

 

71,813

 

10,412

 

746,705

 

148,057

 

21,466

Impairment of investments

186,703

 

100,004

 

14,499

 

186,703

 

591,876

 

85,814

Tax effects on non-GAAP adjustments

(953)

 

(6,560)

 

(951)

 

1,264

 

(18,951)

 

(2,748)

Adjusted net income

41,913

 

1,546,581

 

224,234

 

2,293,956

 

2,842,759

 

412,162

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

(933,264)

 

371,910

 

53,923

 

(524,766)

 

(1,397,284)

 

(202,586)

Income tax expense

269,469

 

630,779

 

91,454

 

1,665,492

 

1,689,574

 

244,965

Share-based compensation expenses

319,835

 

725,179

 

105,141

 

1,538,287

 

2,425,249

 

351,628

Amortization of intangible assets

121,517

 

158,624

 

22,998

 

491,032

 

584,460

 

84,739

Depreciation of property and equipment

280,440

 

230,999

 

33,492

 

879,729

 

918,261

 

133,135

Interest income, net

(113,086)

 

(255,314)

 

(37,017)

 

(354,567)

 

(743,484)

 

(107,795)

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration

3,084

 

129,731

 

18,809

 

(124,416)

 

526,926

 

76,397

Impairment of goodwill, intangible assets and other long-lived assets

349,639

 

71,813

 

10,412

 

746,705

 

148,057

 

21,466

Impairment of investments

186,703

 

100,004

 

14,499

 

186,703

 

591,876

 

85,814

Adjusted EBITDA

484,337

 

2,163,725

 

313,711

 

4,504,199

 

4,743,635

 

687,763

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to KE Holdings Inc.’s ordinary shareholders

(929,682)

 

377,032

 

54,666

 

(524,129)

 

(1,386,074)

 

(200,961)

Share-based compensation expenses

319,835

 

725,179

 

105,141

 

1,538,287

 

2,425,249

 

351,628

Amortization of intangible assets resulting from acquisitions and business cooperation agreement

116,869

 

154,504

 

22,401

 

470,179

 

566,886

 

82,191

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration

3,084

 

129,731

 

18,809

 

(124,416)

 

526,926

 

76,397

Impairment of goodwill, intangible assets and other long-lived assets

349,639

 

71,813

 

10,412

 

746,705

 

148,057

 

21,466

Impairment of investments

186,703

 

100,004

 

14,499

 

186,703

 

591,876

 

85,814

Tax effects on non-GAAP adjustments

(953)

 

(6,560)

 

(951)

 

1,264

 

(18,951)

 

(2,748)

Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders

(7)

 

(7)

 

(1)

 

(28)

 

(28)

 

(4)

Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders

45,488

 

1,551,696

 

224,976

 

2,294,565

 

2,853,941

 

413,783

   
 

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 Year Ended

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in computing net income (loss) per ADS, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

—Basic

1,186,492,228

 

1,183,924,341

 

1,183,924,341

 

1,183,040,543

 

1,189,726,360

 

1,189,726,360

—Diluted

1,186,492,228

 

1,201,542,053

 

1,201,542,053

 

1,183,040,543

 

1,189,726,360

 

1,189,726,360

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in calculating adjusted net income (loss) per ADS

 

 

 

 

 

 

 

 

 

 

 

—Basic

1,186,492,228

 

1,183,924,341

 

1,183,924,341

 

1,183,040,543

 

1,189,726,360

 

1,189,726,360

—Diluted

1,188,942,618

 

1,201,542,053

 

1,201,542,053

 

1,196,789,976

 

1,199,354,087

 

1,199,354,087

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

(0.78)

 

0.32

 

0.05

 

(0.44)

 

(1.17)

 

(0.17)

—Diluted

(0.78)

 

0.31

 

0.04

 

(0.44)

 

(1.17)

 

(0.17)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments to net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

0.82

 

0.99

 

0.14

 

2.38

 

3.57

 

0.52

—Diluted

0.82

 

0.98

 

0.14

 

2.36

 

3.55

 

0.51

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

—Basic

0.04

 

1.31

 

0.19

 

1.94

 

2.40

 

0.35

—Diluted

0.04

 

1.29

 

0.18

 

1.92

 

2.38

 

0.34

 

 

 

 

 

 

 

 

 

 

 

 

 

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

 

 

For the Three Months Ended

 

For the Year Ended

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

1,279,185

 

2,647,195

 

383,808

 

3,595,122

 

8,460,754

 

1,226,695

Net cash used in investing activities

(3,522,717)

 

(984,913)

 

(142,799)

 

(24,884,074)

 

(8,472,355)

 

(1,228,376)

Net cash used in financing activities

(202,800)

 

(913,499)

 

(132,445)

 

(1,074,173)

 

(1,154,993)

 

(167,459)

Effect of exchange rate change on cash, cash equivalents and restricted cash

(221,751)

 

41,537

 

6,022

 

(442,141)

 

28,644

 

4,153

Net increase (decrease) in cash and cash equivalents and restricted cash

(2,668,083)

 

790,320

 

114,586

 

(22,805,266)

 

(1,137,950)

 

(164,987)

Cash, cash equivalents and restricted cash at the beginning of the period/year

29,400,292

 

24,803,939

 

3,596,233

 

49,537,475

 

26,732,209

 

3,875,806

Cash, cash equivalents and restricted cash at the end of the period/year

26,732,209

 

25,594,259

 

3,710,819

 

26,732,209

 

25,594,259

 

3,710,819

 

KE Holdings Inc.

UNAUDITED SEGMENT CONTRIBUTION MEASURE

(All amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2022

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

Existing home transaction services

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

5,985,303

 

5,280,757

 

765,638

 

31,947,953

 

24,123,703

 

3,497,608

 

Less: Commission and compensation

 

(3,965,516)

 

(3,321,568)

 

(481,582)

 

(20,123,501)

 

(14,510,838)

 

(2,103,873)

 

Contribution

 

2,019,787

 

1,959,189

 

284,056

 

11,824,452

 

9,612,865

 

1,393,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New home transaction services

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

11,309,748

 

8,281,269

 

1,200,671

 

46,472,378

 

28,650,374

 

4,153,914

 

Less: Commission and compensation

 

(9,100,919)

 

(6,112,120)

 

(886,174)

 

(37,525,240)

 

(21,886,020)

 

(3,173,175)

 

Contribution

 

2,208,829

 

2,169,149

 

314,497

 

8,947,138

 

6,764,354

 

980,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home renovation and furnishing

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

57,671

 

2,093,811

 

303,574

 

197,452

 

5,046,627

 

731,692

 

Less: Material costs, commission and compensation costs

 

(61,146)

 

(1,467,237)

 

(212,729)

 

(195,869)

 

(3,562,068)

 

(516,451)

 

Contribution

 

(3,475)

 

626,574

 

90,845

 

1,583

 

1,484,559

 

215,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging and other services

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

432,999

 

1,091,303

 

158,224

 

2,134,656

 

2,848,075

 

412,932

 

Less: Commission and compensation

 

(66,153)

 

(829,040)

 

(120,200)

 

(288,593)

 

(1,956,468)

 

(283,661)

 

Contribution

 

366,846

 

262,263

 

38,024

 

1,846,063

 

891,607

 

129,271

 

     

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 45,339 as of December 31, 2021.

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 406,794 as of December 31, 2021.

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, (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 (benefit), (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) depreciation of property 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.

Contacts

For investor and media inquiries:



In China:

KE Holdings Inc.

Investor Relations

Siting Li

E-mail: ir@ke.com



The Piacente Group, Inc.

Yang Song

Tel: +86-10-6508-0677

E-mail: ke@tpg-ir.com



In the United States:

The Piacente Group, Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: ke@tpg-ir.com

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