StepStone (STEP) - 2026 Q1 - Quarterly Results

Report Overview and Key Announcements First Quarter Fiscal 2026 Results Announcement 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] - The results cover the first quarter of the fiscal year ending March 31, 2026[1] Company Profile 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] - StepStone specializes in private equity, infrastructure, private debt, and real estate asset classes[4] Financial Performance Financial Highlights and Key Operating Metrics Summary 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 GAAP financials show total assets at $4.78 billion, liabilities at $3.08 billion, and a $12.0 million net loss Balance Sheets 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) 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 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][25] Adjusted Net Income (ANI) and Fee-Related Earnings (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] - FRE is a component of ANI used to monitor baseline earnings from recurring management and advisory fees[29] 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][45] Performance Fee-Related Earnings (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] Adjusted Net Income (ANI) Per Share 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] Key Operating Metrics Fee-Earning AUM (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] Asset Class Summary 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][61] Supplementary Information Legal Disclaimers and Non-GAAP Measures 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] - 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] Glossary of Terms 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] - AUA: Client assets for which the firm provides advisory or monitoring services without full discretion[65] - FEAUM: Assets from which the company earns management fee revenue, typically based on capital commitments or net invested capital[70]