KE Holdings Inc. reported a 74.9% year-over-year increase in non-GAAP net income to RMB 3.185 billion for the second quarter of 2026, while revenue declined 5.7% to RMB 24.56 billion.
The Beijing-based real estate platform also disclosed a 100.8% year-over-year rise in GAAP net income to RMB 2.624 billion and a 185.6% jump in GAAP operating profit to RMB 3.026 billion. Gross margin expanded by 670 basis points to 28.6%, the highest in three years.
Total gross transaction value returned to growth, rising 6.3% year-over-year, while net operating cash inflow totaled RMB 6.61 billion. The company maintained a broad cash balance of approximately RMB 67.3 billion, excluding customer deposits.
Chief Financial Officer Tao Xu highlighted the company's improved profitability despite revenue declines, stating that profits materially outperformed both GTV and revenue. "Our second half operations will not rely on market events," Xu said. "Better decision support will help us win more customers, and our healthier cost structure will protect cash flow."
KE Holdings repurchased about $250 million of its shares in the second quarter, including the first buyback in the Hong Kong market, bringing first-half repurchases to $460 million, up 14% year-over-year. Cumulative buybacks since September 2022 reached $2.99 billion, representing roughly 14.8% of outstanding shares prior to the program's launch.
The company's stock rose 5.24% in pre-market trading to $17.88, following a 5.36% gain in the regular session. Shares remain about 14.8% below their 52-week high of $20.98 and 14.3% above the 52-week low of $13.81. Analyst targets imply a potential 37% upside.
Existing home transaction services generated RMB 7.02 billion in revenue, up 4.5% year-over-year, with GTV increasing 8% to RMB 629.89 billion. New home business revenue rose 3.8% to RMB 8.95 billion, while contribution margins improved across most segments.
AI-driven initiatives contributed to a 7.4% lead-to-showing conversion rate between May and July, outperforming the broader market average of 5%. CEO Stanley Peng emphasized a shift toward district-specific and project-specific strategies, noting the company is "regrowing the company with AI" rather than merely installing it.
