0001104659-26-048109
SEC filingKE Holdings delivered modest revenue growth of 1.2% to $94.6B in FY2025, but profitability eroded sharply across all major metrics — gross profit fell 11.9%, operating income dropped 43.9%, and net income declined 26.3% — driven by structural margin pressure and negative operating cash flow for the first time in three years.
In FY2025, KE Holdings reported revenue of $94.6 billion, a 1.2% increase from $93.5 billion in FY2024. This growth reflects sustained platform adoption and transaction volume resilience, though it masks underlying pressure in core brokerage economics. Gross profit declined 11.9% to $20.2 billion, and gross margin contracted to 21.4% — a compression driven primarily by the amortization of intangible assets, as explicitly stated in Item 7. This non-cash expense reflects prior acquisition accounting and is not tied to operational inefficiency, but it materially impacts gross margin comparability year-over-year.
Operating income fell sharply to $2.1 billion (a 43.9% decline), with operating margin narrowing to 2.2%. While the authoritative financial packet does not isolate goodwill impairment or segment-level drivers, management notes that fixed compensation for Lianjia agents and cost structure adjustments in home rental services contributed meaningfully to margin pressure. These are structural elements of KE Holdings’ asset-light, platform-led model — where investment in agent quality and service expansion precedes margin stabilization.
Net income declined 26.3% to $3.0 billion, and diluted EPS fell to $0.86 from $1.15. The decline reflects the cascading effect of gross and operating margin erosion, with no offsetting one-time gains or tax benefits disclosed in the authoritative packet. Notably, the company funded capital expenditures primarily with net cash flows from operating activities in prior years; however, FY2025 marked a reversal, with net cash provided by operating activities turning negative at -$376 million — the first outflow in three years. This shift signals heightened working capital strain, particularly from declining accounts payable and rising receivables, consistent with slower collection cycles in a softer housing environment.