Report Overview and Key Announcements [First Quarter Fiscal 2026 Results Announcement](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Announcement) StepStone Group announced Q1 FY2026 results, including a net loss and a **$0.28 per share** quarterly dividend - The Board of Directors declared a quarterly cash dividend of **$0.28 per share** of Class A common stock[1](index=1&type=chunk) - The results cover the first quarter of the fiscal year ending March 31, 2026[1](index=1&type=chunk) [Company Profile](index=1&type=section&id=Company%20Profile) StepStone Group is a global private markets investment firm managing **$723 billion** total capital and **$199 billion** AUM Capital Responsibility as of June 30, 2025 | Metric | Amount (USD) | | :--- | :--- | | Total Capital | ~$723 billion | | Assets Under Management (AUM) | $199 billion | - The firm's clients include large institutional investors like pension funds and sovereign wealth funds, as well as family offices and private wealth clients[4](index=4&type=chunk) - StepStone specializes in private equity, infrastructure, private debt, and real estate asset classes[4](index=4&type=chunk) Financial Performance [Financial Highlights and Key Operating Metrics Summary](index=3&type=section&id=Financial%20Highlights%20and%20Key%20Operating%20Metrics%20Summary) Q1 FY2026 reported a GAAP net loss of **$12.0 million**, with Adjusted Net Income at **$48.5 million** Q1 FY2026 vs Q1 FY2025 GAAP Performance | Metric | Q1 FY2026 (ended Jun 30, 2025) (USD million) | Q1 FY2025 (ended Jun 30, 2024) (USD million) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | 364.3 | 186.4 | +95% | | Net Income (Loss) | (12.0) | 48.0 | N/A | | Diluted EPS | (0.49) | 0.20 | N/A | Q1 FY2026 vs Q1 FY2025 Non-GAAP Performance | Metric | Q1 FY2026 (ended Jun 30, 2025) (USD million) | Q1 FY2025 (ended Jun 30, 2024) (USD million) | YoY Change | | :--- | :--- | :--- | :--- | | Fee Revenues | 212.7 | 178.5 | +19% | | Fee-Related Earnings (FRE) | 81.2 | 71.7 | +13% | | Adjusted Net Income (ANI) | 48.5 | 57.2 | -15% | | ANI Per Share | 0.40 | 0.48 | -17% | Key Business Drivers (as of June 30) | Metric | 2025 (USD billion) | 2024 (USD billion) | YoY Change | | :--- | :--- | :--- | :--- | | Assets Under Management (AUM) | 199.3 | 169.3 | +18% | | Fee-Earning AUM (FEAUM) | 127.2 | 100.4 | +27% | | Assets Under Advisement (AUA) | 524.2 | 531.4 | -1% | [GAAP Condensed Consolidated Financial Statements](index=4&type=section&id=GAAP%20Condensed%20Consolidated%20Financial%20Statements) GAAP financials show total assets at **$4.78 billion**, liabilities at **$3.08 billion**, and a **$12.0 million** net loss [Balance Sheets](index=4&type=section&id=Balance%20Sheets) As of June 30, 2025, total assets were **$4.78 billion**, total liabilities **$3.08 billion**, and stockholders' equity **$1.23 billion** Selected Balance Sheet Items | Account | June 30, 2025 (USD thousands) | March 31, 2025 (USD thousands) | | :--- | :--- | :--- | | **Total Assets** | **4,782,411** | **4,586,693** | | Cash and cash equivalents | 191,469 | 244,791 | | Accrued carried interest allocations | 1,585,209 | 1,495,664 | | **Total Liabilities** | **3,084,999** | **2,812,321** | | Accrued compensation and benefits | 943,007 | 736,695 | | **Total Stockholders' Equity** | **1,230,579** | **1,390,148** | [Statements of Income (Loss)](index=5&type=section&id=Statements%20of%20Income%20(Loss)) Q1 FY2026 total revenues rose to **$364.3 million**, but expenses surged to **$423.3 million**, resulting in a **$12.0 million** net loss Condensed Income Statement | Account | Three Months Ended June 30, 2025 (USD thousands) | Three Months Ended June 30, 2024 (USD thousands) | | :--- | :--- | :--- | | Management and advisory fees, net | 211,173 | 178,015 | | Total performance fees | 153,114 | 8,386 | | **Total revenues** | **364,287** | **186,401** | | Equity-based compensation | 188,718 | 19,179 | | **Total expenses** | **423,316** | **139,250** | | **Net income (loss)** | **(12,011)** | **48,045** | | Net income (loss) attributable to StepStone Group Inc. | (38,424) | 13,328 | Non-GAAP Financial Measures and Reconciliations [Fee Revenues and Adjusted Revenues](index=6&type=section&id=Fee%20Revenues%20and%20Adjusted%20Revenues) Q1 FY2026 fee revenues increased **19%** to **$212.7 million**, with adjusted revenues reaching **$237.5 million** Fee Revenues by Source | Source | Q1 FY2026 (Jun 30, 2025) (USD thousands) | Q1 FY2025 (Jun 30, 2024) (USD thousands) | | :--- | :--- | :--- | | Focused commingled funds | 120,036 | 104,798 | | Separately managed accounts | 70,379 | 57,376 | | Advisory and other services | 19,939 | 14,769 | | **Total Fee Revenues** | **212,740** | **178,514** | - Adjusted revenues are reconciled from total GAAP revenues by excluding unrealized carried interest allocations and other specific items to present a measure of realized revenues[23](index=23&type=chunk)[25](index=25&type=chunk) [Adjusted Net Income (ANI) and Fee-Related Earnings (FRE)](index=7&type=section&id=Adjusted%20Net%20Income%20(ANI)%20and%20Fee-Related%20Earnings%20(FRE)) Q1 FY2026 Adjusted Net Income was **$48.5 million**, Fee-Related Earnings **$81.2 million**, with an FRE margin of **38%** - ANI is a non-GAAP measure of after-tax net realized income used to evaluate profitability, excluding unrealized items, certain equity compensation, and amortization of intangibles[28](index=28&type=chunk) - FRE is a component of ANI used to monitor baseline earnings from recurring management and advisory fees[29](index=29&type=chunk) Reconciliation to ANI and FRE for Q1 FY2026 | Metric | Amount (USD thousands) | | :--- | :--- | | Income (loss) before income tax | (20,350) | | Adjustments (Unrealized items, Equity comp, etc.) | 82,790 | | **Pre-tax ANI** | **62,440** | | Income taxes | (13,906) | | **ANI** | **48,534** | | Adjustments to derive FRE | 18,806 | | **FRE** | **81,246** | - The FRE margin for the quarter ended June 30, 2025 was **38%**, calculated as FRE (**$81.2 million**) divided by Fee Revenues (**$212.7 million**)[44](index=44&type=chunk)[45](index=45&type=chunk) [Performance Fee-Related Earnings (PRE)](index=11&type=section&id=Performance%20Fee-Related%20Earnings%20(PRE)) Q1 FY2026 Performance Fee-Related Earnings (PRE) were **$13.0 million**, a **40% decrease** year-over-year PRE Calculation for Q1 FY2026 | Metric | Amount (USD thousands) | | :--- | :--- | | Gross realized performance fees | 24,727 | | Realized performance fee-related compensation | (11,705) | | **PRE** | **13,022** | - Gross realized performance fees for Q1 FY2026 (**$24.7 million**) decreased by **42%** from Q1 FY2025 (**$42.7 million**)[8](index=8&type=chunk) [Adjusted Net Income (ANI) Per Share](index=12&type=section&id=Adjusted%20Net%20Income%20(ANI)%20Per%20Share) Q1 FY2026 ANI per share was **$0.40**, a **17% decrease** year-over-year, based on **122.3 million** adjusted shares ANI Per Share Calculation for Q1 FY2026 | Metric | Amount | | :--- | :--- | | ANI (USD thousands) | 48,534 | | Adjusted weighted-average shares | 122,292,943 | | **ANI per share (USD)** | **0.40** | - Adjusted weighted-average shares increased by **3%** year-over-year to **122.3 million**[8](index=8&type=chunk) Key Operating Metrics [Fee-Earning AUM (FEAUM)](index=13&type=section&id=Fee-Earning%20AUM%20(FEAUM)) FEAUM grew **27%** year-over-year to **$127.2 billion** as of June 30, 2025, with **$5.0 billion** in quarterly contributions FEAUM Roll-Forward | Metric | Q1 FY2026 (ended Jun 30, 2025) (USD millions) | | :--- | :--- | | Beginning Balance | 121,390 | | Contributions | 5,035 | | Distributions | (1,402) | | Market value, FX and other | 2,196 | | **Ending Balance** | **127,219** | - Contributions to FEAUM for the quarter were **$5.0 billion**, a **35% decrease** from the **$7.7 billion** contributed in the same quarter of the prior year[56](index=56&type=chunk) [Asset Class Summary](index=14&type=section&id=Asset%20Class%20Summary) As of June 30, 2025, total capital responsibility was **$723.5 billion**, AUM **$199.3 billion**, and FEAUM **$127.2 billion** FEAUM by Asset Class (as of June 30, 2025) | Asset Class | FEAUM (USD millions) | YoY Change | | :--- | :--- | :--- | | Private equity | 66,428 | +21% | | Infrastructure | 26,090 | +28% | | Private debt | 21,435 | +33% | | Real estate | 13,266 | +48% | | **Total** | **127,219** | **+27%** | AUM by Asset Class (as of June 30, 2025) | Asset Class | AUM (USD millions) | YoY Change | | :--- | :--- | :--- | | Private equity | 100,540 | +13% | | Infrastructure | 40,087 | +22% | | Private debt | 39,242 | +29% | | Real estate | 19,445 | +15% | | **Total** | **199,314** | **+18%** | - Total capital responsibility, the sum of AUM and AUA, reached **$723.5 billion**, a **3% increase** year-over-year[60](index=60&type=chunk)[61](index=61&type=chunk) Supplementary Information [Legal Disclaimers and Non-GAAP Measures](index=2&type=section&id=Legal%20Disclaimers%20and%20Non-GAAP%20Measures) The report includes forward-looking statements and utilizes non-GAAP financial measures, which supplement but do not substitute GAAP results - The report includes forward-looking statements that are not guarantees of future performance and are subject to various risks and uncertainties[5](index=5&type=chunk) - The company uses several non-GAAP financial measures to supplement its GAAP financial statements, for which definitions and reconciliations are provided within the report[6](index=6&type=chunk) [Glossary of Terms](index=16&type=section&id=Glossary%20of%20Terms) The glossary defines key metrics including AUM, AUA, FEAUM, and total capital responsibility, used throughout the report - AUM: Assets where the firm has full discretion over investment decisions[67](index=67&type=chunk) - AUA: Client assets for which the firm provides advisory or monitoring services without full discretion[65](index=65&type=chunk) - FEAUM: Assets from which the company earns management fee revenue, typically based on capital commitments or net invested capital[70](index=70&type=chunk)

Core Viewpoint - StepStone Group Inc. reported its financial results for the first quarter of fiscal year 2026, highlighting a quarterly cash dividend declaration and significant financial metrics [1][4]. Financial Highlights - The company reported total revenues of $364.287 million for the quarter ended June 30, 2025, representing a 95% increase compared to the same quarter in the previous year [9]. - Management and advisory fees, net, were $211.173 million, a 19% increase from the previous quarter [9]. - The net loss for the quarter was $12.011 million, compared to a net income of $48.045 million in the same quarter last year [9][19]. - The company declared a quarterly cash dividend of $0.28 per share of Class A common stock, payable on September 15, 2025 [1]. Non-GAAP Financial Measures - Fee revenues for the quarter were reported at $212.740 million, a 19% increase from the previous quarter [9]. - Adjusted revenues were $237.467 million, reflecting a 7% decrease compared to the previous quarter [9]. - Fee-related earnings (FRE) were $81.246 million, with a FRE margin of 38% [9][10]. - Adjusted net income (ANI) was $48.534 million, with ANI per share at $0.40, a 17% decrease from the previous quarter [10]. Key Business Drivers - As of June 30, 2025, StepStone managed approximately $723 billion in total capital, including $199 billion in assets under management (AUM), which represents an 18% increase year-over-year [4][10]. - Fee-earning AUM increased by 27% to $127.2 billion [10]. - The company reported a 4% increase in undeployed fee-earning capital, totaling $28.7 billion [10].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for StepStone Group Inc. despite higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.44 per share, reflecting an 8.3% decrease year-over-year, while revenues are projected to be $238.25 million, a 7.7% increase from the previous year [3]. - The consensus EPS estimate has been revised 0.77% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP for StepStone Group is +7.63%, suggesting a higher Most Accurate Estimate compared to the Zacks Consensus Estimate, indicating a likelihood of beating the consensus EPS [12]. - The company holds a Zacks Rank of 3, which, when combined with a positive Earnings ESP, suggests a strong potential for an earnings beat [10][12]. Historical Performance - In the last reported quarter, StepStone Group exceeded the expected earnings of $0.46 per share by delivering $0.68, resulting in a surprise of +47.83% [13]. - Over the past four quarters, the company has surpassed consensus EPS estimates three times [14]. Industry Context - Another company in the same industry, Brookfield Asset Management, is expected to report earnings of $0.39 per share, indicating a 14.7% year-over-year increase, but has a negative Earnings ESP of -0.06% and a Zacks Rank of 4, making predictions of an earnings beat uncertain [18][19][20].

Company Overview - StepStone Group Inc. (STEP) currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [2][11] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the market [3][11] Price Performance - Over the past week, STEP shares have increased by 5.09%, while the Zacks Financial - Miscellaneous Services industry has only risen by 0.03% [5] - In a longer time frame, STEP's monthly price change is 9.05%, outperforming the industry's 5.35% [5] - Over the past quarter, STEP shares have gained 18.57%, and over the last year, they have increased by 26.29%, compared to the S&P 500's gains of 16.43% and 18.63%, respectively [6] Trading Volume - STEP's average 20-day trading volume is 541,261 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Estimates - In the past two months, two earnings estimates for STEP have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $1.79 to $1.84 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [9]

Core Viewpoint - StepStone Group Inc. will release its financial results for the first quarter of the fiscal year ending March 31, 2026, on August 7, 2025, after market close [1] Group 1: Earnings Release Information - The earnings results will be available after the market closes on August 7, 2025 [1] - A webcast and conference call will be held on the same day at 5:00 pm ET to discuss the results [2] - Participants can register for the live Q&A portion of the call through a provided link [3] Group 2: Company Overview - StepStone Group Inc. is a global private markets investment firm focused on customized investment solutions and advisory services [4] - As of March 31, 2025, the company managed approximately $709 billion in total capital, including $189 billion in assets under management [4] - The client base includes large public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, family offices, and high-net-worth individuals [4]

Group 1 - StepStone Group Inc. (STEP) shares increased by 6% to close at $63.24, with a notable trading volume compared to normal sessions, and an overall gain of 11.3% over the past four weeks [1][2] - The price surge was driven by the announcement that StepStone is leveraging Goji's technology to improve access to its European private market evergreen funds, enhancing the investor experience [2] - The company is projected to report quarterly earnings of $0.41 per share, reflecting a year-over-year decline of 14.6%, while revenues are expected to reach $228.81 million, a 3.5% increase from the previous year [3] Group 2 - The consensus EPS estimate for StepStone has remained stable over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [4] - StepStone Group holds a Zacks Rank of 1 (Strong Buy), suggesting strong market confidence in the stock's potential [4] - The company operates within the Zacks Financial - Miscellaneous Services industry, which includes other firms like Houlihan Lokey, whose stock has also shown positive performance [4][5]

Company Overview - StepStone Group is a global private markets investment firm with approximately $709 billion in total capital as of March 31, 2025, including $189 billion in assets under management [2] - The firm serves a diverse client base, including large public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, family offices, and high-net-worth individuals [2] Partnership with Goji - StepStone Group is leveraging Goji's technology to enhance access to its European private market evergreen funds, aiming to simplify the investor journey [1] - Goji provides a technology-enabled investment platform that offers a secure, scalable, and customizable solution for asset managers and investors [3] - The collaboration is expected to deliver a streamlined and efficient investment experience, supported by Euroclear's digital infrastructure and regulatory expertise [1] Fund Performance - StepStone Private Markets (Luxembourg) ("SPRIM Lux") has $351 million in assets under management and a total net return of 43.81% since its inception in September 2022 [4] - StepStone Private Venture and Growth (Luxembourg) ("SPRING Lux") has $427 million in assets under management with a total net return of 70.65% since its inception in November 2022 [4] - StepStone Private Infrastructure (Luxembourg) ("STRUCTURE Lux") has $89.9 million in assets under management and a total net return of 32.24% since its inception in September 2023 [4] - StepStone Private Credit Europe ELTIF ("SCRED Europe") launched in February 2025 with over €250 million in seed capital, focusing on a diversified European private credit strategy [4]

Core Insights - StepStone Real Estate (SRE) has been awarded the 2025 IPE Real Estate Global Awards' Investment Consultancy of the Year, marking its fourth consecutive year receiving this recognition [1][2]. Group 1: Award Recognition - The Investment Consultancy of the Year Award highlights SRE's effective advisory approach for institutional clients and investors in real estate investment programs [2]. - The firm's competitive advantages include global reach, an experienced team, strong relationships with general partners, extensive market coverage, and proprietary technology for market intelligence [2]. Group 2: Performance Metrics - In 2024, SRE conducted approximately 1,000 manager meetings and approved $14 billion in real estate capital commitments across 47 funds [2]. - As of March 31, 2025, StepStone Group managed approximately $709 billion in total capital, with $189 billion in assets under management [3]. Group 3: Company Strategy - SRE differentiates itself through hands-on experience in secondaries, recapitalizations, and co-investments, along with deep manager, fund, and market research capabilities [3]. - The company aims to provide tailor-made solutions to a diverse and growing client base [3].

Summary of StepStone Group Conference Call Company Overview - **Company**: StepStone Group - **Industry**: Private Markets Investment and Advisory - **Assets Under Management**: Approximately $190 billion, overseeing nearly $500 billion in private market allocations [3][4] Key Points and Arguments Business Model and Market Position - StepStone operates as a solution provider, differentiating itself from traditional General Partners (GPs) like Blackstone and KKR by allocating capital on behalf of clients to funds managed by GPs while also managing direct strategies [4][5] - The private markets have grown from approximately $2 trillion in assets under management (AUM) in 2007 to over $15 trillion today, indicating a significant market opportunity for solution providers [7][8] - StepStone's strategies include primary fund investments, co-investments, and secondary interests across four asset classes: private equity, venture capital, real estate, and private credit [6] Fundraising Success - Fiscal year 2025 was a record year for StepStone with total inflows of $30 billion, including $20 billion from separate accounts and $10 billion from commingled funds [10][11] - The company achieved a 90% re-up rate for managed accounts, with clients increasing their investments by an average of 30% upon re-upping [14][15] - The commingled fund side saw significant success, with over $3 billion raised across three different funds, marking the largest fundraising year for commingled funds since inception [12][13] Global Footprint and Client Base - Over 60% of StepStone's business comes from outside the U.S., allowing the firm to tap into growing allocations in emerging markets [11][24] - The firm aims to work with a diverse range of clients, from large sovereign wealth funds to individual investors, reflecting a solutions-oriented approach [9] Partnership with FTSE Russell - StepStone announced a partnership with FTSE Russell to develop private asset indices and analytics products, aiming to address the challenge of measuring performance across liquid and illiquid assets [17][20] - The partnership will initially focus on benchmarking solutions, with potential for investable products like index funds in the future [18][19] Macro Environment and Market Dynamics - The macroeconomic environment has been volatile, impacting fundraising and investment activity; however, StepStone's diversification across asset classes and geographies has mitigated some risks [22][24] - The secondary market has seen significant growth, with total secondary volume reaching approximately $160 billion in 2024, more than doubling in the last five to six years [33][34] Opportunities in Private Wealth and Institutional Markets - Private wealth management has seen substantial growth, with assets on the platform exceeding $8 billion, driven by a strong performance and efficient capital structures [40][42] - There is a growing interest in private credit and infrastructure as newer asset classes, with many institutional investors beginning to allocate to these areas [30][29] Future Outlook - StepStone is focused on expanding its international operations and product offerings, particularly in the private wealth channel and retirement markets [48][54] - The firm is exploring opportunities in public-private partnerships and the retirement channel, recognizing the potential for significant asset growth in these areas [50][53] Additional Important Insights - The firm has developed a comprehensive product suite for private wealth, catering to a wide range of investors and emphasizing a solutions-oriented approach [44][45] - The secondary market is expected to continue growing, driven by liquidity challenges faced by limited partners (LPs) and the increasing importance of secondary transactions [31][33] This summary encapsulates the key insights and developments discussed during the conference call, highlighting StepStone Group's strategic positioning, fundraising success, and future opportunities in the private markets landscape.

Core Insights - StepStone Group has opened a new office in Jeonju, South Korea, enhancing its partnership with the National Pension Service (NPS) [1][2] - The Jeonju office is StepStone's second location in South Korea, following the Seoul office established in 2014 [1] - The opening ceremony was attended by senior leaders from both StepStone and NPS, highlighting the importance of this partnership [3] Company Overview - StepStone Group is a global private markets investment firm managing approximately $709 billion in total capital, with $189 billion in assets under management as of March 31, 2025 [4] - The firm provides customized investment solutions and advisory services to a diverse client base, including large pension funds, sovereign wealth funds, and private wealth clients [4] - StepStone focuses on developing private markets portfolios across various asset classes, including private equity, infrastructure, private debt, and real estate [4]