Business Wire | Nov 8, 2021 05:30PM EST

KE Holdings Inc. Announces Third Quarter 2021 Unaudited Financial Results

Nov. 08, 2021

BEIJING--(BUSINESS WIRE)--Nov. 08, 2021--KE Holdings Inc. ("Beike" or the "Company") (NYSE: BEKE), a leading integrated online and offline platform for housing transactions and services, today announced its unaudited financial results for the third quarter ended September 30, 2021.

Business Highlights for the Third Quarter of 2021

* Gross transaction value (GTV)1 was RMB830.7 billion (US$128.9 billion), a decrease of 20.9% year-over-year. GTV of existing home transactions was RMB378.2 billion (US$58.7 billion), a decrease of 34.3% year-over-year. GTV of new home transactions was RMB410.1 billion (US$63.7 billion), a decrease of 2.5% year-over-year. GTV of emerging and other services was RMB42.3 billion (US$6.6 billion), a decrease of 20.4% year-over-year. * Net revenues were RMB18.1 billion (US$2.8 billion), a decrease of 11.9% year-over-year. * Net loss was RMB1,766 million (US$274 million). Adjusted net loss2 was RMB888 million (US$138 million). * Number of stores was 53,946 as of September 30, 2021, a 20.2% increase from one year ago. Number of active stores3 was 49,468 as of September 30, 2021, a 20.2% increase from one year ago. * Number of agents was 515,486 as of September 30, 2021, a 7.9% increase from one year ago. Number of active agents4 was 468,014 as of September 30, 2021, a 13.1% increase from one year ago. * Mobile monthly active users (MAU)5 averaged 46.1 million, compared to 47.9 million in the same period of 2020.

Mr. Stanley Yongdong Peng, Chairman of the Board and Chief Executive Officer of Beike, commented, "The third quarter was challenging and difficult for the industry with corrective and sweeping adjustments to safeguard and bring about a long-term healthy development of the real-estate market in China. Under the guidance of national policies on stabilizing housing price, curbing speculation and promoting common prosperity, Beike remained committed to our mission of 'admirable service, joyful living'. Our third quarter results reflected both the broad macroenvironment challenges the industry is facing and the resiliency of our business, with a total GTV of RMB830.7 billion for the quarter, decreasing 20.9% year over year while still outperforming the market."

"In the third quarter, we continued to execute our Agent Specialization Strategy and make further strides in digital empowerment by launching the 'Xiaobei existing home sales training camp', which helps agents to develop new skills to provide premium and focused services through highly efficient collaboration. For new home transaction services, we carried out stringent new home risk control measures, deepened digitalization, enriched online content, and persisted in pursuing top-quality service with a continued emphasis on new home business conduct. For home renovation business, in Beijing, we opened Craftsman (Jinggong) Academy as the industry's first full-service vocational training base and Beiwoo, our home renovation brand, launched ten 'heart-to-heart' service commitments to address the renovation industry's key pain points. Shengdu, the home renovation business we proposed to acquire, also maintained rapid growth in the East China market. Its future potential integration with the Company will further enhance our competitiveness in the renovation business."

"We believe that China's recently announced pilot program of a five-year property tax will contribute to a healthier, more stable development of China's real estate market and the formulation of a long-term mechanism for growth, which is also a favorable environment for the Company's future growth. Followed by the acceleration of the era of quality service for housing industry, we will continue to take more social responsibilities and focus on the overall service quality improvement and technological empowerment to our connected service providers, and strive for our vision of providing quality housing services to 300 million families in China," concluded Mr. Peng.

Mr. Tao Xu, Executive Director and Chief Financial Officer of Beike, added, "During the third quarter, we generated RMB18.1 billion of net revenues, down 11.9% year over year, as we saw the GTV for both existing home and new home transaction services experiencing downward trends amidst necessary market corrections. While we strongly believe the new regulatory measures will benefit the industry, the broader economy and the society in the long term, we adopted multiple initiatives to enhance service quality and ensure good business conduct, with a view to contributing to the establishment of a sustainable housing market. We will stick to our path with full commitment to serve our customers better, and we are confident that we would stay resilient and have our values recognized."

Third Quarter 2021 Financial Results

Net Revenues

Net revenues decreased by 11.9% to RMB18.1 billion (US$2.8 billion) in the third quarter of 2021 from RMB20.5 billion in the same period of 2020. The decrease was primarily attributable to the decline in total GTV of 20.9% to RMB830.7 billion (US$128.9 billion) in the third quarter of 2021 from RMB1,050.0 billion in the same period of 2020.

* Net revenues from existing home transaction services were RMB6.1 billion (US$0.9 billion) in the third quarter of 2021, compared to RMB8.8 billion in the same period of 2020, primarily due to a 34.3% decrease in GTV of existing home transactions to RMB378.2 billion (US$58.7 billion) in the third quarter of 2021 from RMB576.1 billion in the same period of 2020, led by a slow-down of the existing home market which was affected by a series of market-cooling measures in the third quarter of 2021. Among that, (i) the revenues derived from platform service, franchise service and other value-added services, which are mostly charged to connected stores and agents on the Company's platform, were RMB0.8 billion (US$0.1 billion) in the third quarter of 2021, compared to RMB0.9 billion in the same period of 2020, primarily because the GTV of existing home transactions served by connected agents on the Company's platform decreased by 33.6% to RMB192.9 billion (US$29.9 billion) in the third quarter of 2021 from RMB290.4 billion in the same period of 2020. The downtrend was partially offset by a moderate increase in existing home transaction commission rate charged by connected stores due to the increased percentage of rental transactions with a relatively higher commission rate; (ii) commission revenue was RMB5.3 billion (US$0.8 billion) in the third quarter of 2021, compared to RMB7.9 billion in the same period of 2020, primarily due to a decrease in GTV of existing home transactions served by Lianjia stores to RMB185.3 billion (US$28.8 billion) in the third quarter of 2021, compared to RMB285.7 billion in the same period of 2020.

* Net revenues from new home transaction services increased by 2.5% to RMB11.3 billion (US$1.8 billion) in the third quarter of 2021 from RMB11.1 billion in the same period of 2020, primarily attributable to a moderate increase of new home transactions commission rate, while the GTV of new home transactions was RMB410.1 billion (US$63.7 billion) in the third quarter of 2021, compared to RMB420.7 billion in the same period of 2020. The GTV of new home transaction services completed on Beike platform through connected agents and other sales channels was RMB337.6 billion (US$52.4 billion), compared to RMB337.9 billion in the same period of 2020, while the GTV of new home transactions served by Lianjia brand was RMB72.6 billion (US$11.3 billion) in the third quarter of 2021, compared to RMB82.8 billion in the same period of 2020.

* Net revenues from emerging and other services was RMB610 million (US$94.6 million) in the third quarter of 2021 from RMB625 million in the same period of 2020, primarily due to a decrease of net revenues for financial services around the existing housing transaction services, while it was partially offset by a 29.4% increase of net revenues from renovation service.

Cost of Revenues

Total cost of revenues was RMB15.3 billion (US$2.4 billion) in the third quarter of 2021, compared to RMB16.2 billion in the same period of 2020.

* Commission - split. The Company's cost of revenues for commissions to connected agents and other sales channels was RMB7,689 million (US$1,193 million) in the third quarter of 2021, compared to RMB7,737 million in the same period of 2020, along with the relatively stable number of new home transactions completed through connected agents and other sales channels in the third quarter of 2021 compared with the same period of 2020.

* Commission and compensation - internal. The Company's cost of revenues for internal commission and compensation was RMB6.0 billion (US$0.9 billion) in the third quarter of 2021, compared to RMB6.6 billion in the same period of 2020, primarily due to the decrease in the number of exiting home and new home transactions completed through Lianjia agents.

* Cost related to stores. The Company's cost related to stores increased by 19.7% to RMB1.0 billion (US$0.2 billion) in the third quarter of 2021 compared to RMB0.8 billion in the same period of 2020, mainly due to an increase in the number of stores for Lianjia brand and the incremental rise in rental fees of contract service centers opened in 2021.

* Other costs. The Company's other costs decreased by 28.1% to RMB0.7 billion (US$0.1 billion) in the third quarter of 2021 from RMB1.0 billion in the same period of 2020, mainly due to the decrease in share-based compensation expenses.

Gross Profit

Gross profit was RMB2.8 billion (US$0.4 billion) in the third quarter of 2021, compared to RMB4.4 billion in the same period of 2020. Gross margin was 15.2% in the third quarter of 2021, compared to 21.3% in the same period of 2020. The decrease in gross margin was mainly due to a lower contribution margin of existing home transactions led by the decreased net revenues from existing home transactions and the relatively flat fixed compensation costs for Lianjia agents.

Income (Loss) from Operations

Total operating expenses were RMB5.1 billion (US$0.8 billion) in the third quarter of 2021, compared to RMB4.5 billion in the same period of 2020.

* General and administrative expenses were RMB2,412 million (US$374 million) in the third quarter of 2021, compared to RMB2,649 million in the same period of 2020, mainly due to the decrease in share-based compensation expenses, partially offset by the increase of personnel costs and bad debt provision.

* Sales and marketing expenses were RMB1,202 million (US$187 million) in the third quarter of 2021, compared to RMB1,026 million in the same period of 2020, mainly due to the increase of headcount in business development personnel.

* Research and development expenses were RMB1,043 million (US$162 million) in the third quarter of 2021, compared to RMB789 million in the same period of 2020, mainly due to the increase of headcount in experienced research and development personnel, partially offset by the decrease of share-based compensation expenses.

* Impairment of goodwill and intangible assets was RMB397 million (US$62 million) in the third quarter of 2021, compared to nil in the same period of 2020, mainly due to recent market downtrend and the Company's long term view of the outlook of the businesses in the qualitative goodwill impairment assessments, as it is more likely than not that the carrying amount of certain acquired businesses exceeded their fair value. The Company will continue to monitor and evaluate the fair value of goodwill, and should facts and circumstances change, additional non-cash impairment charge could be recorded in the future.

Loss from operations was RMB2,300 million (US$357 million) in the third quarter of 2021, compared to RMB81 million in the same period of 2020. Operating margin was negative 12.7% in the third quarter of 2021, compared to negative 0.4% in the same period of 2020, primarily due to 1) a relatively lower gross profit margin in the third quarter of 2021 compared to the same period of 2020; and 2) an increase of the percentage of total operating expenses as of net revenues in the third quarter of 2021, primarily due to decreased net revenues along with the relatively flat recurring operating expenses, and additional impairment of goodwill as well as severance provision of RMB250 million incurred in the third quarter of 2021 compared to the same period of 2020.

Adjusted loss from operations6 was RMB1,435 million (US$223 million) in the third quarter of 2021, compared to adjusted income from operations RMB1,740 million in the same period of 2020. Adjusted operating margin7was negative 7.9% in the third quarter of 2021, compared to 8.5% in the same period of 2020. Adjusted EBITDA8 was negative RMB550 million (US$85 million) in the third quarter of 2021, compared to RMB2,248 million in the same period of 2020.

Net Income (Loss)

Net loss was RMB1,766 million (US$274 million) in the third quarter of 2021, compared to net income RMB75 million in the same period of 2020.

Adjusted net loss was RMB888 million (US$138 million) in the third quarter of 2021, compared to adjusted net income RMB1,858 million in the same period of 2020.

Net Income (Loss) attributable to KE Holdings Inc.'s ordinary shareholders

Net loss attributable to KE Holdings Inc.'s ordinary shareholders was RMB1,765 million (US$274 million) in the third quarter of 2021, compared to RMB271 million in the same period of 2020.

Adjusted net loss attributable to KE Holdings Inc.9was RMB887 million (US$138 million) in the third quarter of 2021, compared to adjusted net income attributable to KE Holdings Inc. RMB1,857 million in the same period of 2020.

Net Income (Loss) per ADS

Diluted net loss per ADS attributable to KE Holdings Inc.'s ordinary shareholders10 was RMB1.50 (US$0.23) in the third quarter of 2021, compared to RMB0.33 in the same period of 2020.

Adjusted diluted net loss per ADS attributable to KE Holdings Inc.'s ordinary shareholders11 was RMB0.75 (US$0.12) in the third quarter of 2021, compared to adjusted diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders RMB1.38 in the same period of 2020.

Cash, Cash Equivalents, Restricted Cash and Short-Term Investments

As of September 30, 2021, the combined balance of the Company's cash, cash equivalents, restricted cash and short-term investments amounted to RMB52.7 billion (US$8.2 billion).

Business Outlook

For the fourth quarter of 2021, the Company expects total net revenues to be between RMB14.5 billion (US$2.3 billion) and RMB15.5 billion (US$2.4 billion), representing a decrease of approximately 31.6% to 36.0% from the same quarter of 2020. This forecast considers the potential impact of the recent real estate related policies and measures, and the Company's current and preliminary view on the business situation and market condition, which is subject to change.

Conference Call Information

The Company will hold a conference call on 8:00 PM U.S. Eastern Time on Monday, November 8, 2021 (9:00 AM Beijing/Hong Kong Time on Tuesday, November 9, 2021) to discuss the financial results. Details for the conference call are as follows:

Event Title: Beike's Third Quarter 2021 Earnings Conference Call Conference ID: 2491775

All participants must use the link provided below to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event pass code, and a unique registrant ID by email.

PRE-REGISTER LINK: http://apac.directeventreg.com/registration/event/2491775

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://investors.ke.com/.

The replay will be accessible through November 16, 2021, by dialing the following numbers:

United States Toll Free: +1-855-452-5696

Mainland, China: 400-602-2065

Hong Kong, China: +852-3051-2780

International: +61-2-8199-0299

Conference ID: 2491775

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.4434 to US$1.00, the noon buying rate in effect on September 30, 2021, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Non-GAAP Financial Measures

The Company uses adjusted income (loss) from operations, adjusted net income (loss), adjusted net income (loss) attributable to KE Holdings Inc., adjusted operating margin, adjusted EBITDA and adjusted net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Beike believes that these non-GAAP financial measures help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that the Company includes in its net income (loss). Beike also believes that these non-GAAP financial measures provide useful information about its results of operations, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making. A limitation of using these non-GAAP financial measures is that these non-GAAP financial measures exclude share-based compensation expenses that have been, and will continue to be for the foreseeable future, a significant recurring expense in the Company's business.

The presentation of these non-GAAP financial measures should not be considered in isolation or construed as an alternative to gross profit, net income (loss) or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review these non-GAAP financial measures and the reconciliation to the most directly comparable GAAP measures. The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. Beike encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Adjusted income (loss) from operations is defined as income (loss) from operations, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, and (iii) impairment of goodwill and intangible assets. Adjusted operating margin is defined as adjusted income (loss) from operations as a percentage of net revenues. Adjusted net income (loss) is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill and intangible assets, and (v) tax effects of the above non-GAAP adjustments. Adjusted net income (loss) attributable to KE Holdings Inc. is defined as net income (loss) attributable to KE Holdings Inc., excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill and intangible assets, (v) tax effects of the above non-GAAP adjustments, and (vi) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Adjusted EBITDA is defined as net income (loss), excluding (i) interest income, net, (ii) income tax expense (benefit), (iii) depreciation of property and equipment, (iv) amortization of intangible assets, (v) share-based compensation expenses, (vi) impairment of goodwill and intangible assets, and (vii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration. Adjusted net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders is defined as adjusted net income (loss) attributable to KE Holdings Inc.'s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted.

Please see the "Unaudited reconciliation of GAAP and non-GAAP results" included in this press release for a full reconciliation of each non-GAAP measure to its respective comparable GAAP measure.

About KE Holdings Inc.

KE Holdings Inc. is a leading integrated online and offline platform for housing transactions and services. The Company is a pioneer in building the industry infrastructure and standards in China to reinvent how service providers and housing customers efficiently navigate and consummate housing transactions, ranging from existing and new home sales, home rentals, to home renovation, real estate financial solutions, and other services. The Company owns and operates Lianjia, China's leading real estate brokerage brand and an integral part of its Beike platform. With 20 years of operating experience through Lianjia since its inception in 2001, the Company believes the success and proven track record of Lianjia pave the way for it to build the industry infrastructure and standards and drive the rapid and sustainable growth of Beike.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to," and similar statements. Among other things, the business outlook and quotations from management in this press release, as well as Beike's strategic and operational plans, contain forward-looking statements. Beike may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about KE Holdings Inc.'s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Beike's goals and strategies; Beike's future business development, financial condition and results of operations; expected changes in the Company's revenues, costs or expenditures; Beike's ability to empower services and facilitate transactions on Beike's platform; competition in our industry; relevant government policies and regulations relating to our industry; Beike's ability to protect the Company's systems and infrastructures from cyber-attacks; Beike's dependence on the integrity of brokerage brands, stores and agents on the Company's platform; general economic and business conditions in China and globally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in KE Holdings Inc.'s filings with the SEC. All information provided in this press release is as of the date of this press release, and KE Holdings Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share, per share data)

As of As of December September 30, 31,

2020 2021

RMB RMB US$

ASSETSCurrent assetsCash and cash equivalents 40,969,979 21,780,230 3,380,239

Restricted cash 8,567,496 7,620,062 1,182,615

Short-term investments 15,688,321 23,344,042 3,622,939

Short-term financing receivables, netof allowance for credit losses of 3,931,641 2,616,323 406,047RMB113,905 and RMB250,242 as ofDecember 31, 2020 and September 30,2021, respectivelyAccounts receivable, net of allowancefor credit losses of RMB1,122,218 and 13,183,559 10,516,025 1,632,061RMB1,642,883 as of December 31, 2020and September 30, 2021, respectivelyAmounts due from and prepayments to 484,349 583,138 90,502related partiesLoan receivables from related parties 36,378 46,055 7,148

Prepayments, receivables and other 4,677,378 3,805,474 590,600assetsTotal current assets 87,539,101 70,311,349 10,912,151

Non-current assets

Property and equipment, net 1,472,460 2,031,300 315,253

Right-of-use assets 6,821,100 7,730,585 1,199,768

Long-term financing receivables, net ofallowance for credit losses of 218,018 43,674 6,778RMB13,414 and RMB 1,633 as of December31, 2020 and September 30, 2021,respectivelyLong-term investments, net 3,140,315 17,650,777 2,739,358

Intangible assets, net 1,642,651 1,280,315 198,702

Goodwill 2,467,497 2,107,777 327,122

Other non-current assets 994,394 985,297 152,916

Total non-current assets 16,756,435 31,829,725 4,939,897

TOTAL ASSETS 104,295,536 102,141,074 15,852,048

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)

As of

As of

December 31,

September 30,

2020

2021

RMB

RMB

US$

LIABILITIESCurrent liabilitiesAccounts payable6,594,846

5,309,823

824,072

Amounts due to related parties254,255

493,352

76,567

Employee compensation and welfare payable11,231,800

10,048,545

1,559,510

Customer deposits payable6,743,256

6,074,677

942,775

Income taxes payable986,465

266,335

41,335

Short-term borrowings-

260,000

40,351

Lease liabilities current portion2,625,979

2,884,426

447,656

Short-term funding debt1,512,510

397,000

61,613

Contract liabilities734,157

1,024,196

158,953

Accrued expenses and other current liabilities2,950,078

2,634,461

408,863

Total current liabilities33,633,346

29,392,815

4,561,695

Non-current liabilitiesDeferred tax liabilities17,289

17,289

2,683

Lease liabilities non-current portion3,833,914

4,572,826

709,691

Long-term funding debt15,000

-

-

Other non-current liabilities3,471

2,491

387

Total non-current liabilities3,869,674

4,592,606

712,761

TOTAL LIABILITIES37,503,020

33,985,421

5,274,456

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)

As of As of December September 30, 31,

2020 2021

RMB RMB US$

LIABILITIESCurrent liabilitiesAccounts payable 6,594,846 5,309,823 824,072

Amounts due to related parties 254,255 493,352 76,567

Employee compensation and welfare payable 11,231,800 10,048,545 1,559,510

Customer deposits payable 6,743,256 6,074,677 942,775

Income taxes payable 986,465 266,335 41,335

Short-term borrowings - 260,000 40,351

Lease liabilities current portion 2,625,979 2,884,426 447,656

Short-term funding debt 1,512,510 397,000 61,613

Contract liabilities 734,157 1,024,196 158,953

Accrued expenses and other current 2,950,078 2,634,461 408,863liabilitiesTotal current liabilities 33,633,346 29,392,815 4,561,695

Non-current liabilities

Deferred tax liabilities 17,289 17,289 2,683

Lease liabilities non-current portion 3,833,914 4,572,826 709,691

Long-term funding debt 15,000 - -

Other non-current liabilities 3,471 2,491 387

Total non-current liabilities 3,869,674 4,592,606 712,761

TOTAL LIABILITIES 37,503,020 33,985,421 5,274,456

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)

As of

As of

December 31,

September 30,

2020

2021

RMB

RMB

US$

SHAREHOLDERS' EQUITYKE Holdings Inc. shareholders' equityOrdinary Shares (US$0.00002 par value; 25,000,000,000 ordinary shares authorized, comprising of 23,614,698,720 Class A ordinary shares, 885,301,280 Class B ordinary shares and 500,000,000 shares each of such classes to be designated, 2,666,966,855 and 2,687,391,656 Class A ordinary shares issued and outstanding as of December 31, 2020 and September 30, 2021; 885,301,280 Class B ordinary shares issued and outstanding as of December 31, 2020 and September 30, 2021)482

489

76

Additional paid-in capital77,433,882

78,652,334

12,206,651

Statutory reserves392,834

392,834

60,967

Accumulated other comprehensive loss(1,834,087)

(2,121,041)

(329,180)

Accumulated deficit(9,227,664)

(8,822,111)

(1,369,170)

Total KE Holdings Inc. shareholders' equity66,765,447

68,102,505

10,569,344

Non-controlling interests27,069

53,148

8,248

TOTAL SHAREHOLDERS' EQUITY66,792,516

68,155,653

10,577,592

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY104,295,536

102,141,074

15,852,048

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share, per share data)

As of As of December September 30, 31,

2020 2021

RMB RMB US$

SHAREHOLDERS' EQUITYKE Holdings Inc. shareholders' equityOrdinary Shares (US$0.00002 par value;25,000,000,000 ordinary sharesauthorized, comprising of23,614,698,720 Class A ordinaryshares, 885,301,280 Class B ordinaryshares and 500,000,000 shares each ofsuch classes to be designated, 482 489 762,666,966,855 and 2,687,391,656 ClassA ordinary shares issued andoutstanding as of December 31, 2020and September 30, 2021; 885,301,280Class B ordinary shares issued andoutstanding as of December 31, 2020and September 30, 2021)Additional paid-in capital 77,433,882 78,652,334 12,206,651

Statutory reserves 392,834 392,834 60,967

Accumulated other comprehensive loss (1,834,087) (2,121,041) (329,180)

Accumulated deficit (9,227,664) (8,822,111) (1,369,170)

Total KE Holdings Inc. shareholders' 66,765,447 68,102,505 10,569,344equityNon-controlling interests 27,069 53,148 8,248

TOTAL SHAREHOLDERS' EQUITY 66,792,516 68,155,653 10,577,592

TOTAL LIABILITIES AND SHAREHOLDERS' 104,295,536 102,141,074 15,852,048EQUITYKE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except for share, per share data, ADS and per ADS data)

Three months endedNine months endedSeptember 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2020

2021

2021

2020

2021

2021

RMB

RMB

US$

RMB

RMB

US$

Net revenuesExisting home transaction services8,849,706

6,138,020

952,606

21,404,907

25,962,650

4,029,340

New home transaction services11,074,424

11,348,472

1,761,255

25,051,136

35,162,630

5,457,155

Emerging and other services624,785

609,648

94,616

1,354,290

1,841,438

285,787

Total net revenues20,548,915

18,096,140

2,808,477

47,810,333

62,966,718

9,772,282

Cost of revenuesCommission-split(7,736,904)

(7,688,787)

(1,193,281)

(16,115,155)

(24,027,308)

(3,728,980)

Commission and compensation-internal(6,624,055)

(5,956,798)

(924,481)

(16,534,075)

(20,912,161)

(3,245,516)

Cost related to stores(832,719)

(996,936)

(154,722)

(2,260,339)

(2,774,574)

(430,607)

Others(972,007)

(698,988)

(108,481)

(1,465,127)

(2,348,522)

(364,485)

Total cost of revenues(1)(16,165,685)

(15,341,509)

(2,380,965)

(36,374,696)

(50,062,565)

(7,769,588)

Gross profit4,383,230

2,754,631

427,512

11,435,637

12,904,153

2,002,694

Operating expensesSales and marketing expenses(1)(1,026,479)

(1,202,248)

(186,586)

(2,391,909)

(3,500,026)

(543,196)

General and administrative expenses(1)(2,648,678)

(2,412,235)

(374,373)

(5,705,203)

(6,721,984)

(1,043,236)

Research and development expenses(1)(789,089)

(1,042,906)

(161,856)

(1,763,520)

(2,455,870)

(381,145)

Impairment of goodwill and intangible assets-

(397,066)

(61,624)

-

(397,066)

(61,624)

Total operating expenses(4,464,246)

(5,054,455)

(784,439)

(9,860,632)

(13,074,946)

(2,029,201)

Income/(loss) from operations(81,016)

(2,299,824)

(356,927)

1,575,005

(170,793)

(26,507)

Interest income, net22,231

90,717

14,079

158,926

241,481

37,477

Share of results of equity investees7,138

10,785

1,674

4,812

44,892

6,967

Fair value changes in investments, net76,277

97,557

15,141

55,968

443,720

68,864

Foreign currency exchange gain/(loss)(8,096)

12,068

1,873

(684)

19,656

3,051

Other income, net317,798

526,336

81,686

780,585

1,225,565

190,205

Income/(loss) before income tax expense334,332

(1,562,361)

(242,474)

2,574,612

1,804,521

280,057

Income tax expense(258,991)

(203,514)

(31,585)

(891,845)

(1,396,023)

(216,659)

Net income/(loss)75,341

(1,765,875)

(274,059)

1,682,767

408,498

63,398

Net (income)/loss attributable to non-controlling interests shareholders(644)

955

148

(152)

(2,945)

(457)

Net income/(loss) attributable to KE Holdings Inc.74,697

(1,764,920)

(273,911)

1,682,615

405,553

62,941

Accretion on convertible redeemable preferred shares to redemption value(346,143)

-

-

(1,755,228)

-

-

Net income/(loss) attributable to KE Holdings Inc.'s ordinary shareholders(271,446)

(1,764,920)

(273,911)

(72,613)

405,553

62,941

Net income/(loss)75,341

(1,765,875)

(274,059)

1,682,767

408,498

63,398

Currency translation adjustments(745,045)

117,994

18,312

(594,662)

(279,668)

(43,404)

Unrealized losses on available-for-sale investments, net of reclassification-

(4,577)

(710)

-

(7,286)

(1,131)

Total comprehensive income/(loss)(669,704)

(1,652,458)

(256,457)

1,088,105

121,544

18,863

Comprehensive (income)/loss attributable to non-controlling interests shareholders(644)

955

148

(152)

(2,945)

(457)

Comprehensive income/(loss) attributable to KE Holdings Inc.(670,348)

(1,651,503)

(256,309)

1,087,953

118,599

18,406

Accretion on convertible redeemable preferred shares to redemption value(346,143)

-

-

(1,755,228)

-

-

Comprehensive income/(loss) attributable to KE Holdings Inc.'s ordinary shareholders(1,016,491)

(1,651,503)

(256,309)

(667,275)

118,599

18,406

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except for share, per share data, ADS and per ADSdata)

Three months ended Nine months ended September September September September September September 30, 30, 30, 30, 30, 30,

2020 2021 2021 2020 2021 2021

RMB RMB US$ RMB RMB US$

Net revenuesExisting home 8,849,706 6,138,020 952,606 21,404,907 25,962,650 4,029,340transaction servicesNew home transaction 11,074,424 11,348,472 1,761,255 25,051,136 35,162,630 5,457,155servicesEmerging and other 624,785 609,648 94,616 1,354,290 1,841,438 285,787servicesTotal net revenues 20,548,915 18,096,140 2,808,477 47,810,333 62,966,718 9,772,282

Cost of revenues

Commission-split (7,736,904) (7,688,787) (1,193,281) (16,115,155) (24,027,308) (3,728,980)

Commission and (6,624,055) (5,956,798) (924,481) (16,534,075) (20,912,161) (3,245,516)compensation-internalCost related to (832,719) (996,936) (154,722) (2,260,339) (2,774,574) (430,607)storesOthers (972,007) (698,988) (108,481) (1,465,127) (2,348,522) (364,485)

Total cost of (16,165,685) (15,341,509) (2,380,965) (36,374,696) (50,062,565) (7,769,588)revenues^(1)Gross profit 4,383,230 2,754,631 427,512 11,435,637 12,904,153 2,002,694

Operating expenses

Sales and marketing (1,026,479) (1,202,248) (186,586) (2,391,909) (3,500,026) (543,196)expenses^(1)General and (2,648,678) (2,412,235) (374,373) (5,705,203) (6,721,984) (1,043,236)administrativeexpenses^(1)Research and (789,089) (1,042,906) (161,856) (1,763,520) (2,455,870) (381,145)development expenses^(1)Impairment of - (397,066) (61,624) - (397,066) (61,624)goodwill andintangible assetsTotal operating (4,464,246) (5,054,455) (784,439) (9,860,632) (13,074,946) (2,029,201)expensesIncome/(loss) from (81,016) (2,299,824) (356,927) 1,575,005 (170,793) (26,507)operationsInterest income, net 22,231 90,717 14,079 158,926 241,481 37,477

Share of results of 7,138 10,785 1,674 4,812 44,892 6,967equity investeesFair value changes in 76,277 97,557 15,141 55,968 443,720 68,864investments, netForeign currency (8,096) 12,068 1,873 (684) 19,656 3,051exchange gain/(loss)Other income, net 317,798 526,336 81,686 780,585 1,225,565 190,205

Income/(loss) before 334,332 (1,562,361) (242,474) 2,574,612 1,804,521 280,057income tax expenseIncome tax expense (258,991) (203,514) (31,585) (891,845) (1,396,023) (216,659)

Net income/(loss) 75,341 (1,765,875) (274,059) 1,682,767 408,498 63,398

Net (income)/lossattributable to (644) 955 148 (152) (2,945) (457)non-controllinginterestsshareholdersNet income/(loss) 74,697 (1,764,920) (273,911) 1,682,615 405,553 62,941attributable to KEHoldings Inc.Accretion onconvertible (346,143) - - (1,755,228) - -redeemable preferredshares to redemptionvalueNet income/(loss)attributable to KE (271,446) (1,764,920) (273,911) (72,613) 405,553 62,941Holdings Inc.'sordinary shareholders

Net income/(loss) 75,341 (1,765,875) (274,059) 1,682,767 408,498 63,398

Currency translation (745,045) 117,994 18,312 (594,662) (279,668) (43,404)adjustmentsUnrealized losses onavailable-for-sale - (4,577) (710) - (7,286) (1,131)investments, net ofreclassificationTotal comprehensive (669,704) (1,652,458) (256,457) 1,088,105 121,544 18,863income/(loss)Comprehensive(income)/lossattributable to (644) 955 148 (152) (2,945) (457)non-controllinginterestsshareholdersComprehensive income/ (670,348) (1,651,503) (256,309) 1,087,953 118,599 18,406(loss) attributableto KE Holdings Inc.Accretion onconvertible (346,143) - - (1,755,228) - -redeemable preferredshares to redemptionvalueComprehensive income/(loss) attributable (1,016,491) (1,651,503) (256,309) (667,275) 118,599 18,406to KE Holdings Inc.'sordinary shareholdersKE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(All amounts in thousands, except for share, per share data, ADS and per ADS data)

Three months endedNine months endedSeptember 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2020

2021

2021

2020

2021

2021

RMB

RMB

US$

RMB

RMB

US$

Weighted average number of ordinary shares used in computing net income/(loss) per share, basic and diluted-Basic2,470,138,350

3,533,752,811

3,533,752,811

1,812,367,756

3,526,805,332

3,526,805,332

-Diluted2,470,138,350

3,533,752,811

3,533,752,811

1,812,367,756

3,579,020,205

3,579,020,205

Weighted average number of ADS used in computing net income/(loss) per ADS, basic and diluted-Basic823,379,450

1,177,917,604

1,177,917,604

604,122,585

1,175,601,777

1,175,601,777

-Diluted823,379,450

1,177,917,604

1,177,917,604

604,122,585

1,193,006,735

1,193,006,735

Net income/(loss) per share attributable to KE Holdings Inc.'s ordinary shareholders-Basic(0.11)

(0.50)

(0.08)

(0.04)

0.11

0.02

-Diluted(0.11)

(0.50)

(0.08)

(0.04)

0.11

0.02

Net income/(loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders-Basic(0.33)

(1.50)

(0.23)

(0.12)

0.34

0.05

-Diluted(0.33)

(1.50)

(0.23)

(0.12)

0.34

0.05

(1)Includes share-based compensation expenses as follows:Cost of revenues435,021

65,196

10,118

435,021

299,468

46,477

Sales and marketing expenses47,362

22,512

3,494

47,362

92,642

14,378

General and administrative expenses901,692

144,263

22,389

901,692

483,240

74,998

Research and development expenses284,120

117,628

18,256

284,120

343,101

53,248

KE Holdings Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(All amounts in thousands, except for share, per share data, ADS and per ADSdata)

Three months ended Nine months ended September 30, September 30, September 30, September 30, September 30, September 30, 2020 2021 2021 2020 2021 2021

RMB RMB US$ RMB RMB US$

Weightedaverage numberof ordinaryshares used incomputing netincome/(loss)per share,basic anddiluted-Basic 2,470,138,350 3,533,752,811 3,533,752,811 1,812,367,756 3,526,805,332 3,526,805,332

-Diluted 2,470,138,350 3,533,752,811 3,533,752,811 1,812,367,756 3,579,020,205 3,579,020,205



Weightedaverage numberof ADS used in computing netincome/(loss)per ADS, basicand diluted-Basic 823,379,450 1,177,917,604 1,177,917,604 604,122,585 1,175,601,777 1,175,601,777

-Diluted 823,379,450 1,177,917,604 1,177,917,604 604,122,585 1,193,006,735 1,193,006,735



Net income/(loss) pershareattributable to KE HoldingsInc.'sordinaryshareholders-Basic (0.11) (0.50) (0.08) (0.04) 0.11 0.02

-Diluted (0.11) (0.50) (0.08) (0.04) 0.11 0.02



Net income/(loss) per ADSattributable to KE HoldingsInc.'sordinaryshareholders-Basic (0.33) (1.50) (0.23) (0.12) 0.34 0.05

-Diluted (0.33) (1.50) (0.23) (0.12) 0.34 0.05



(1)Includes share-based compensation expenses as follows:Cost of 435,021 65,196 10,118 435,021 299,468 46,477revenuesSales and 47,362 22,512 3,494 47,362 92,642 14,378marketingexpensesGeneral and 901,692 144,263 22,389 901,692 483,240 74,998administrativeexpensesResearch and 284,120 117,628 18,256 284,120 343,101 53,248developmentexpensesKE Holdings Inc.

UNAUDITED RECONCILIATION of GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share, per share data, ADS and per ADS data)

Three months endedNine months endedSeptember 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2020

2021

2021

2020

2021

2021

RMB

RMB

US$

RMB

RMB

US$

Income/(loss) from operations(81,016)

(2,299,824)

(356,927)

1,575,005

(170,793)

(26,507)

Share-based compensation expenses1,668,195

349,599

54,257

1,668,195

1,218,451

189,101

Amortization of intangible assets resulting from acquisitions and business cooperation agreement152,685

118,191

18,343

461,286

353,310

54,833

Impairment of goodwill and intangible assets-

397,066

61,624

-

397,066

61,624

Adjusted income/(loss) from operations1,739,864

(1,434,968)

(222,703)

3,704,486

1,798,034

279,051

Net income/(loss)75,341

(1,765,875)

(274,059)

1,682,767

408,498

63,398

Share-based compensation expenses1,668,195

349,599

54,257

1,668,195

1,218,451

189,101

Amortization of intangible assets resulting from acquisitions and business cooperation agreement152,685

118,191

18,343

461,286

353,310

54,833

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration(36,499)

11,160

1,732

(91,030)

(127,500)

(19,788)

Impairment of goodwill and intangible assets-

397,066

61,624

-

397,066

61,624

Tax effects on non-GAAP adjustments(1,510)

1,604

249

(2,325)

2,217

344

Adjusted net income/(loss)1,858,212

(888,255)

(137,854)

3,718,893

2,252,042

349,512

Net income/(loss)75,341

(1,765,875)

(274,059)

1,682,767

408,498

63,398

Income tax expense258,991

203,514

31,585

891,845

1,396,023

216,659

Share-based compensation expenses1,668,195

349,599

54,257

1,668,195

1,218,451

189,101

Amortization of intangible assets155,728

121,776

18,899

475,796

369,515

57,348

Depreciation of property and equipment148,061

223,668

34,713

372,022

599,289

93,008

Interest income, net(22,231)

(90,717)

(14,079)

(158,926)

(241,481)

(37,477)

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration(36,499)

11,160

1,732

(91,030)

(127,500)

(19,788)

Impairment of goodwill and intangible assets-

397,066

61,624

-

397,066

61,624

Adjusted EBITDA2,247,586

(549,809)

(85,328)

4,840,669

4,019,861

623,873

Net income/(loss) attributable to KE Holdings Inc.74,697

(1,764,920)

(273,911)

1,682,615

405,553

62,941

Share-based compensation expenses1,668,195

349,599

54,257

1,668,195

1,218,451

189,101

Amortization of intangible assets resulting from acquisitions and business cooperation agreement152,685

118,191

18,343

461,286

353,310

54,833

Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration(36,499)

11,160

1,732

(91,030)

(127,500)

(19,788)

Impairment of goodwill and intangible assets-

397,066

61,624

-

397,066

61,624

Tax effects on non-GAAP adjustments(1,510)

1,604

249

(2,325)

2,217

344

Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders(90)

(7)

(1)

(1,593)

(21)

(3)

Adjusted net income/(loss) attributable to KE Holdings Inc.1,857,478

(887,307)

(137,707)

3,717,148

2,249,076

349,052

Accretion on convertible redeemable preferred shares to redemption value(346,143)

-

-

(1,755,228)

-

-

Adjusted net income allocated to participating preferred shares(342,033)

-

-

(799,341)

-

-

Adjusted net income/(loss) attributable to KE Holdings Inc.'s ordinary shareholders1,169,302

(887,307)

(137,707)

1,162,579

2,249,076

349,052

KE Holdings Inc.

UNAUDITED RECONCILIATION of GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share, per share data, ADS and per ADSdata)

Three months ended Nine months ended September September September September September September 30, 30, 30, 30, 30, 30,

2020 2021 2021 2020 2021 2021

RMB RMB US$ RMB RMB US$

Income/(loss) (81,016) (2,299,824) (356,927) 1,575,005 (170,793) (26,507)from operationsShare-based 1,668,195 349,599 54,257 1,668,195 1,218,451 189,101compensationexpensesAmortization ofintangibleassetsresulting from 152,685 118,191 18,343 461,286 353,310 54,833acquisitionsand businesscooperationagreementImpairment ofgoodwill and - 397,066 61,624 - 397,066 61,624intangibleassetsAdjusted income 1,739,864 (1,434,968) (222,703) 3,704,486 1,798,034 279,051/(loss) fromoperations

Net income/ 75,341 (1,765,875) (274,059) 1,682,767 408,498 63,398(loss)Share-based 1,668,195 349,599 54,257 1,668,195 1,218,451 189,101compensationexpensesAmortization ofintangibleassetsresulting from 152,685 118,191 18,343 461,286 353,310 54,833acquisitionsand businesscooperationagreementChanges in fairvalue from longterminvestments,loan (36,499) 11,160 1,732 (91,030) (127,500) (19,788)receivablesmeasured atfair value andcontingentconsiderationImpairment ofgoodwill and - 397,066 61,624 - 397,066 61,624intangibleassetsTax effects on (1,510) 1,604 249 (2,325) 2,217 344non-GAAPadjustmentsAdjusted net 1,858,212 (888,255) (137,854) 3,718,893 2,252,042 349,512income/(loss)

Net income/ 75,341 (1,765,875) (274,059) 1,682,767 408,498 63,398(loss)Income tax 258,991 203,514 31,585 891,845 1,396,023 216,659expenseShare-based 1,668,195 349,599 54,257 1,668,195 1,218,451 189,101compensationexpensesAmortization of 155,728 121,776 18,899 475,796 369,515 57,348intangibleassetsDepreciation of 148,061 223,668 34,713 372,022 599,289 93,008property andequipmentInterest (22,231) (90,717) (14,079) (158,926) (241,481) (37,477)income, netChanges in fairvalue from longterminvestments,loan (36,499) 11,160 1,732 (91,030) (127,500) (19,788)receivablesmeasured atfair value andcontingentconsiderationImpairment ofgoodwill and - 397,066 61,624 - 397,066 61,624intangibleassetsAdjusted EBITDA 2,247,586 (549,809) (85,328) 4,840,669 4,019,861 623,873



Net income/(loss) 74,697 (1,764,920) (273,911) 1,682,615 405,553 62,941attributable toKE HoldingsInc.Share-based 1,668,195 349,599 54,257 1,668,195 1,218,451 189,101compensationexpensesAmortization ofintangibleassetsresulting from 152,685 118,191 18,343 461,286 353,310 54,833acquisitionsand businesscooperationagreementChanges in fairvalue from longterminvestments,loan (36,499) 11,160 1,732 (91,030) (127,500) (19,788)receivablesmeasured atfair value andcontingentconsiderationImpairment ofgoodwill and - 397,066 61,624 - 397,066 61,624intangibleassetsTax effects on (1,510) 1,604 249 (2,325) 2,217 344non-GAAPadjustmentsEffects ofnon-GAAPadjustments onnet income (90) (7) (1) (1,593) (21) (3)attributable tonon-controllinginterestsshareholdersAdjusted netincome/(loss) 1,857,478 (887,307) (137,707) 3,717,148 2,249,076 349,052attributable toKE HoldingsInc.Accretion onconvertibleredeemable (346,143) - - (1,755,228) - -preferredshares toredemptionvalueAdjusted netincomeallocated to (342,033) - - (799,341) - -participatingpreferredsharesAdjusted netincome/(loss)attributable to 1,169,302 (887,307) (137,707) 1,162,579 2,249,076 349,052KE HoldingsInc.'s ordinaryshareholdersKE Holdings Inc.

UNAUDITED RECONCILIATION of GAAP AND NON-GAAP RESULTS (Continued)

(All amounts in thousands, except for share, per share data, ADS and per ADS data)

Three months endedNine months endedSeptember 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2020

2021

2021

2020

2021

2021

RMB

RMB

US$

RMB

RMB

US$

Weighted average number of ADS used in computing net income/(loss) per ADS, basic and diluted-Basic823,379,450

1,177,917,604

1,177,917,604

604,122,585

1,175,601,777

1,175,601,777

-Diluted823,379,450

1,177,917,604

1,177,917,604

604,122,585

1,193,006,735

1,193,006,735

Weighted average number of ADS used in calculating adjusted net income/(loss) per ADS, basic and diluted-Basic823,379,450

1,177,917,604

1,177,917,604

604,122,585

1,175,601,777

1,175,601,777

-Diluted844,473,061

1,177,917,604

1,177,917,604

617,202,590

1,193,006,735

1,193,006,735

Net income/(loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders-Basic(0.33)

(1.50)

(0.23)

(0.12)

0.34

0.05

-Diluted(0.33)

(1.50)

(0.23)

(0.12)

0.34

0.05

Non-GAAP adjustments to net income/(loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders-Basic1.75

0.75

0.11

2.04

1.57

0.25

-Diluted1.71

0.75

0.11

2.00

1.55

0.24

Adjusted net income/(loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders-Basic1.42

(0.75)

(0.12)

1.92

1.91

0.30

-Diluted1.38

(0.75)

(0.12)

1.88

1.89

0.29

KE Holdings Inc.

UNAUDITED RECONCILIATION of GAAP AND NON-GAAP RESULTS (Continued)

(All amounts in thousands, except for share, per share data, ADS and per ADSdata)

Three months ended Nine months ended September September 30, September 30, September September 30, September 30, 30, 30,

2020 2021 2021 2020 2021 2021

RMB RMB US$ RMB RMB US$

Weightedaveragenumber ofADS used incomputingnet income/(loss) perADS, basicand diluted-Basic 823,379,450 1,177,917,604 1,177,917,604 604,122,585 1,175,601,777 1,175,601,777

-Diluted 823,379,450 1,177,917,604 1,177,917,604 604,122,585 1,193,006,735 1,193,006,735



Weightedaveragenumber ofADS used incalculating adjusted netincome/(loss) perADS, basicand diluted-Basic 823,379,450 1,177,917,604 1,177,917,604 604,122,585 1,175,601,777 1,175,601,777

-Diluted 844,473,061 1,177,917,604 1,177,917,604 617,202,590 1,193,006,735 1,193,006,735



Net income/(loss) perADSattributable to KEHoldingsInc.'sordinaryshareholders-Basic (0.33) (1.50) (0.23) (0.12) 0.34 0.05

-Diluted (0.33) (1.50) (0.23) (0.12) 0.34 0.05



Non-GAAPadjustmentsto netincome/(loss) perADS attributableto KEHoldingsInc.'sordinaryshareholders-Basic 1.75 0.75 0.11 2.04 1.57 0.25

-Diluted 1.71 0.75 0.11 2.00 1.55 0.24



Adjusted netincome/(loss) perADSattributable to KEHoldingsInc.'sordinaryshareholders-Basic 1.42 (0.75) (0.12) 1.92 1.91 0.30

-Diluted 1.38 (0.75) (0.12) 1.88 1.89 0.29

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

Three months endedNine months endedSeptember 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2020

2021

2021

2020

2021

2021

RMB

RMB

US$

RMB

RMB

US$

Net cash provided by/(used in) operating activities3,213,000

(1,158,435)

(179,786)

8,257,465

2,315,937

359,428

Net cash used in investing activities(6,945,255)

(10,964,521)

(1,701,667)

(9,369,789)

(21,361,357)

(3,315,231)

Net cash provided by/(used in) financing activities16,565,408

71,801

11,143

15,996,088

(871,373)

(135,235)

Effect of exchange rate change on cash, cash equivalents and restricted cash(815,884)

84,964

13,187

(698,940)

(220,390)

(34,204)

Net increase/(decrease) in cash and cash equivalents and restricted cash12,017,269

(11,966,191)

(1,857,123)

14,184,824

(20,137,183)

(3,125,242)

Cash, cash equivalents and restricted cash at the beginning of the period34,098,131

41,366,483

6,419,977

31,930,576

49,537,475

7,688,096

Cash, cash equivalents and restricted cash at the end of the period46,115,400

29,400,292

4,562,854

46,115,400

29,400,292

4,562,854

KE Holdings Inc.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

Three months ended Nine months ended September September September September September September 30, 30, 30, 30, 30, 30,

2020 2021 2021 2020 2021 2021

RMB RMB US$ RMB RMB US$



Net cashprovided by 3,213,000 (1,158,435) (179,786) 8,257,465 2,315,937 359,428/(used in)operatingactivitiesNet cashused in (6,945,255) (10,964,521) (1,701,667) (9,369,789) (21,361,357) (3,315,231)investingactivitiesNet cashprovided by 16,565,408 71,801 11,143 15,996,088 (871,373) (135,235)/(used in)financingactivitiesEffect ofexchangerate changeon cash, (815,884) 84,964 13,187 (698,940) (220,390) (34,204)cashequivalentsandrestrictedcashNetincrease/(decrease)in cash and 12,017,269 (11,966,191) (1,857,123) 14,184,824 (20,137,183) (3,125,242)cashequivalentsandrestrictedcashCash, cashequivalentsandrestricted 34,098,131 41,366,483 6,419,977 31,930,576 49,537,475 7,688,096cash at thebeginningof theperiodCash, cashequivalentsand 46,115,400 29,400,292 4,562,854 46,115,400 29,400,292 4,562,854restrictedcash at theend of theperiodKE Holdings Inc.

UNAUDITED SEGMENT CONTRIBUTION MEASURE

(All amounts in thousands)

Three months endedNine months endedSeptember 30,

September 30,

September 30,

September 30,

September 30,

September 30,

2020

2021

2021

2020

2021

2021

RMB

RMB

US$

RMB

RMB

US$

Existing home transaction servicesNet revenues8,849,706

6,138,020

952,606

21,404,907

25,962,650

4,029,340

Less: Commission and compensation(5,133,485)

(4,394,794)

(682,061)

(12,842,121)

(16,157,985)

(2,507,680)

Contribution3,716,221

1,743,226

270,545

8,562,786

9,804,665

1,521,660

New home transaction servicesNet revenues11,074,424

11,348,472

1,761,255

25,051,136

35,162,630

5,457,155

Less: Commission and compensation(9,128,976)

(9,117,892)

(1,415,075)

(19,602,097)

(28,424,321)

(4,411,385)

Contribution1,945,448

2,230,580

346,180

5,449,039

6,738,309

1,045,770

Emerging and other servicesNet revenues624,785

609,648

94,616

1,354,290

1,841,438

285,787

Less: Commission and compensation(98,498)

(132,899)

(20,626)

(205,012)

(357,163)

(55,431)

Contribution526,287

476,749

73,990

1,149,278

1,484,275

230,356

1GTV for a given period is calculated as the total value of all transactions which the Company facilitated on the Company's platform and evidenced by signed contracts as of the end of the period, including the value of the existing home transactions, new home transactions and emerging and other services, and including transactions that are contracted but pending closing at the end of period. 2Adjusted net income (loss) is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill and intangible assets, and (v) tax effects of the above non-GAAP adjustments. Please refer to the section titled "Unaudited reconciliation of GAAP and non-GAAP results" for details. 3Based on our accumulated operational experience, we have introduced the number of active agents and active stores on our platform which can better reflect the operational activeness of stores and agents on our platform. "Active stores" as of a given date is defined as stores on our platform excluding the stores which (i) have not facilitated any housing transaction during the preceding 60 days, (ii) do not have any agent who has engaged in any critical steps in housing transactions (including but not limited to introducing new properties, attracting new customers and conducting property showings) during the preceding seven days, or (iii) have not been visited by any agent during the preceding 14 days. The numbers of active stores on our platform are 41,152, 43,436, 44,937 and 49,046 as of September 30, 2020, December 31, 2020, March 31, 2021 and June 30, 2021, respectively. 4"Active agents" as of a given date is defined as agents on our platform excluding the agents who (i) delivered notice to leave but have not yet completed the exit procedures, (ii) have not engaged in any critical steps in housing transactions (including but not limited to introducing new properties, attracting new customers and conducting property showings) during the preceding 30 days, or (iii) have not participated in facilitating any housing transaction during the preceding three months. The numbers of active agents on our platform are 413,732, 445,438, 479,308 and 499,690 as of September 30, 2020, December 31, 2020, March 31, 2021 and June 30, 2021, respectively. 5"Mobile monthly active users" or "mobile MAU" are to the sum of (i) the number of accounts that have accessed our platform through our Beike or Lianjia mobile app (with duplication eliminated) at least once during a month, and (ii) the number of Weixin users that have accessed our platform through our Weixin mini programs at least once during a month. Average mobile MAU for any period is calculated by dividing (i) the sum of the Company's mobile MAUs for each month of such period, by (ii) the number of months in such period. 6Adjusted income (loss) from operations is a non-GAAP financial measure, which is defined as income (loss) from operations, excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement and (iii) impairment of goodwill and intangible assets. Please refer to the section titled "Unaudited reconciliation of GAAP and non-GAAP results" for details. 7Adjusted operating margin is adjusted income (loss) from operations as a percentage of net revenues. 8Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income (loss), excluding (i) interest income, net, (ii) income tax expense (benefit), (iii) depreciation of property and equipment, (iv) amortization of intangible assets, (v) share-based compensation expenses, (vi) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, and (vii) impairment of goodwill and intangible assets. Please refer to the section titled "Unaudited reconciliation of GAAP and non-GAAP results" for details. 9Adjusted net income (loss) attributable to KE Holdings Inc. is a non-GAAP financial measure and represents adjusted income (loss) attributable to KE Holdings Inc.'s ordinary shareholders and preferred shareholders, and all preferred shares of KE Holdings Inc. had been automatically converted to ordinary shares upon initial public offering of KE Holdings Inc. on a one-for-one basis. Adjusted net income (loss) attributable to KE Holdings Inc. is defined as net income (loss) attributable to KE Holdings Inc., excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, (iii) changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration, (iv) impairment of goodwill and intangible assets, (v) tax effects of the above non-GAAP adjustments, and (vi) effects of non-GAAP adjustments on net income (loss) attributable to non-controlling interests shareholders. Please refer to the section titled "Unaudited reconciliation of GAAP and non-GAAP results" for details. 10ADS is American Depositary Share. Each ADS represents three Class A ordinary shares of the Company. Diluted net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders is net income (loss) attributable to ordinary shareholders divided by weighted average number of diluted ADS. 11Adjusted net income (loss) per ADS attributable to KE Holdings Inc.'s ordinary shareholders is a non-GAAP financial measure, which is defined as adjusted net income (loss) attributable to KE Holdings Inc.'s ordinary shareholders divided by weighted average number of ADS outstanding during the periods used in calculating adjusted net income (loss) per ADS, basic and diluted. Please refer to the section titled "Unaudited reconciliation of GAAP and non-GAAP results" for details.

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CONTACT: For investor and media inquiries:

CONTACT: In China: KE Holdings Inc. Investor Relations Matthew Zhao Siting Li E-mail: ir@ke.com

CONTACT: The Piacente Group, Inc. Ross Warner Tel: +86-10-6508-0677 E-mail: ke@tpg-ir.com

CONTACT: In the United States: The Piacente Group, Inc. Brandi Piacente Tel: +1-212-481-2050 E-mail: ke@tpg-ir.com