KE (BEKE) Q3 2024 earnings summary

Executive summary

• Achieved dynamic and sustainable growth in Q3 2024, with all business segments delivering solid results despite market challenges.

• Gross transaction value (GTV) rose 12.5% year-over-year to RMB 736.8 billion, with net revenues up 26.8% to RMB 22.6 billion.

• Net income was RMB 1.2 billion; non-GAAP/adjusted net income was RMB 1.8 billion, reflecting a year-over-year decline.

• Number of stores and active stores increased 12.1% and 14.6% year-over-year, respectively; active agents grew 6.1%.

• Home renovation, furnishing, and rental services saw robust growth, contributing 38.3% of total net revenues.

Financial highlights

• Net revenue was RMB 22.6 billion, a 26.8% year-over-year increase; gross profit was RMB 5.1 billion, up 5.2%.

• Gross margin declined by 4.7 percentage points year-over-year to 22.7% due to revenue mix and higher compensation costs.

• Operating income was RMB 727 million (3.2% margin); adjusted operating income was RMB 1,363 million (6.0% margin).

• Adjusted EBITDA was RMB 2,154 million, down from RMB 2,515 million year-over-year.

• Basic and diluted net income per ADS were RMB 1.04 and RMB 1.00, respectively; adjusted per ADS were RMB 1.58 and RMB 1.53.

Outlook and guidance

• Recent policy measures have led to a strong market rebound, especially in Tier 1 cities, with transaction volumes and prices stabilizing.

• Management expects continued sustainable growth, supported by government policy and market recovery seen in October.

• Expecting relatively stable market in Q4, with short-term price stability but sustainability requiring further observation.

• Focus remains on long-term vision, innovation, and prudent resource allocation to support diversified business lines.

• Further economic recovery and supply-side measures are key for long-term market stabilization.