Record-High Rental Revenue Growth and Active Store Expansion Drive BEKE’s Q3 2025
KE Holdings Inc. (NYSE: BEKE), a key player in China’s housing transaction and service platform, released its third quarter 2025 results with clear signs of sector resilience and bold corporate maneuvers. While new home sales revenue cooled, BEKE’s home rental and technology-led segments hit major milestones—offering an insightful snapshot of China’s real estate innovation in action.
Rental Services Surge, Store Footprint Grows Rapidly
The third quarter saw BEKE’s home rental services revenue climb by 45.3% year-over-year to RMB 5.73 billion (US$804 million), outpacing all other segments. This rapid rise was underpinned by the expanding Carefree Rent model and integration of AI into rental workflows, delivering RMB 100 million (US$14 million) in quarterly profits from rental operations alone.
Notably, BEKE’s platform infrastructure has expanded aggressively. The number of stores jumped 27.3% year-over-year to 61,393, with active stores growing 25.9% to 59,012. Agent count also rose by double-digits, signaling deepening national reach and improving service coverage. Mobile monthly active users increased to 49.3 million, a testament to BEKE’s continued customer engagement.
Segment Breakdown Highlights Contrasts Across Housing Services
| Segment | Q3 2025 Net Revenue (RMB B) | YoY % Change | Q3 2025 Contribution (RMB M) | YoY % Change (Contribution) |
|---|---|---|---|---|
| Existing Home Transactions | 5.99 | -3.6% | 2,334 | -8.4% |
| New Home Transactions | 6.64 | -14.1% | 1,600 | -16.4% |
| Home Renovation/Furnishing | 4.30 | +2.1% | 1,376 | +4.5% |
| Home Rental Services | 5.73 | +45.3% | 498 | +186% |
| Emerging/Other Services | 0.40 | -18.7% | 274 | -29% |
Despite segment-specific declines in new and existing home revenues, the outperformance in rentals and renovation supported a 2.1% rise in total net revenues, up to RMB 23.05 billion (US$3.24 billion). The highest contribution growth rate came from home rentals, highlighting where BEKE’s transformation efforts are paying off.
Profitability Pressured, Yet Efficiency Initiatives Show Impact
Adjusted net income declined 27.8% year-over-year to RMB 1.29 billion (US$181 million) in Q3, reflecting ongoing gross margin pressure as new home sales slowed. Gross profit margin eased to 21.4% (from 22.7%), influenced by a lower mix of higher-margin home sales and higher costs in emerging growth lines.
Nonetheless, management spotlighted operational efficiency improvements. Operating expenses decreased 1.8% from a year ago, with significant reductions in sales and marketing. Research and development outlays rose by 13.2% as BEKE pushed deeper into AI-powered innovation across its service verticals.
Share Buybacks Hit Two-Year High, Reinforcing Shareholder Returns
BEKE allocated a record US$281 million for share repurchases during the quarter, the largest quarterly buyback in two years. Year-to-date repurchases reached US$675 million—equivalent to 3% of year-end 2024 shares outstanding. Since 2022, BEKE has bought back approximately US$2.3 billion worth of shares, shrinking its pre-program share count by around 11.5%. This demonstrates the company’s strong balance sheet and confidence in long-term value creation.
Financial and Operating Metrics Reflect Broad Strategic Shift
| Key Metric | Q3 2025 | YoY % Change |
|---|---|---|
| Net Revenues (RMB B) | 23.05 | +2.1% |
| Gross Profit (RMB B) | 4.94 | -3.9% |
| Adjusted Net Income (RMB M) | 1,286 | -27.8% |
| Active Stores | 59,012 | +25.9% |
| Mobile MAU (Million) | 49.3 | +6.7% |
| Share Buybacks YTD (US$ M) | 675 | +15.7% |
The company’s cash and short-term investments totaled RMB 55.7 billion (US$7.8 billion), signaling strong financial flexibility.
Strategic Focus: AI Integration and City-Level Profitability
BEKE’s leadership reaffirmed their focus on AI and process innovation, including the expansion of pilot programs like “buyer-seller agent specialization” in Shanghai. AI-powered upgrades to home rental and renovation services not only enhanced the customer and agent experience, but also led these units to reach city-level profitability ahead of HQ expense allocation—a first in the company’s history.
Executives signaled ongoing investment in core technology and shareholder returns, setting the tone for continued adaptation amid market and regulatory changes. With over RMB 100 million in quarterly profit from rental operations and visible AI deployment, BEKE’s evolution as a tech-enabled real estate platform is accelerating.
Takeaway: Momentum Shifts to Technology, Rental and Renovation Segments
While BEKE’s Q3 2025 results show mixed performance on legacy home transaction metrics, the acceleration in home rental services and commitment to shareholder buybacks provide notable counterbalance. The integration of AI across services and store expansion efforts paint a picture of a platform focused on scalable, technology-led growth.
Investors may want to track how quickly BEKE can convert efficiency and technology initiatives into renewed earnings growth—especially if home rental, renovation, and service segments can further offset the volatility in home sales cycles. The strong share repurchase signal also hints at underlying management confidence as the platform adapts for the next stage of growth.
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