BEKE - KE Holdings fall despite earnings beat on soft Q2 outlook

2023-05-18 14:11:47 ET

Housing transactions and services platform KE Holdings ( NYSE: BEKE ) fell ~8% on Thursday afternoon, despite the company having reported a Q1 earnings beat, on the back of a soft Q2 outlook.

The company's Q1 non-GAAP EPADS of $0.43 beats by $0.18 and revenue of $2.95B (+61.6% Y/Y) beats by $410M.

Net revenues from existing home transaction services increased by 49.3% on a yearly basis to $1.3B. Net revenues from new home transaction services was up by 42.2% to $1.2B.

Net revenues from home renovation and furnishing were $0.2B, while net revenues from emerging and other services rose by 222.1% to $0.2B.

Gross profit increased by 186.1% to $0.9B. Gross margin was 31.3%, compared to 17.7% in the same period of 2022.

Income from operations stood at $434M, compared to a year-ago loss.

As of March 31, the combined balance of the company’s cash, cash equivalents, restricted cash and short-term investments amounted to $9.7B.

For Q2, the company expects net revenues to be between $2.7B and $2.8B, vs. consensus of $2.57B.

The outlook represents an increase of ~34.3% to 37.9% from Q2 of 2022.

The outlook 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.

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