GET DAILY SIGNALSStepStone Group (STEP) Delivers +70% Revenue Growth in Q2 Fiscal 2027
Key Takeaways
- StepStone Group reported GAAP total revenues of $773.1 million for the second quarter of fiscal 2027, up 70% from $454.2 million in the prior-year period.
- Adjusted (non-GAAP) revenue of $362.7 million came in ahead of the roughly $321.7 million consensus estimate, driven by recurring management and advisory fees.
- Fee-related earnings (FRE), which measures profitability from recurring fees, rose 61% year over year to $126.2 million, with the FRE margin expanding to 42% from 36%.
- GAAP net loss attributable to StepStone Group was $71.2 million, or $(0.87) per diluted share, pressured by non-cash items including unrealized carried interest allocations and equity-based compensation.
- Assets under management (AUM) climbed 25% year over year to $261.0 billion, within roughly $958 billion of total capital responsibility.
- The board raised the quarterly dividend 18% to $0.33 per Class A share, payable on December 15, 2026.
Earnings Context and Why It Matters
StepStone Group is a global private markets investment firm that earns money through management fees, advisory services, and performance-based carried interest tied to the funds it manages. Because a large share of its results flows from long-dated, illiquid assets, investors watch recurring fee-related earnings closely as a measure of durable profitability, while performance fees can swing sharply with market valuations. This quarter matters because it shows whether StepStone can keep converting strong fundraising into growing management fees, even as realized performance income fluctuates. With AUM expanding rapidly and a sizable pool of undeployed capital waiting to be invested, the results offer a window into both current operating momentum and the fee pipeline that could support future quarters.
Breaking Down the Reported Results
For the quarter ended September 30, 2026 — the second quarter of StepStone's fiscal year ending March 31, 2027 — GAAP total revenues reached $773.1 million, a 70% increase from $454.2 million a year earlier. Management and advisory fees, net, rose 36% to $293.1 million, while non-GAAP fee revenues grew 37% to $297.6 million. Adjusted revenue of $362.7 million exceeded the consensus estimate of roughly $321.7 million. I also checked this using Tickeron’s AI Screener to see how STEP compares to others in the industry.
The headline GAAP figures were complicated by large non-cash movements. Total performance fees reached $480.0 million, up 101% year over year, but most of that came from $362.5 million of carried interest allocations, of which $301.7 million was unrealized. As a result, StepStone recorded a net loss attributable to the company of $71.2 million, or $(0.87) per diluted share, despite positive consolidated net income of $65.4 million. Adjusted net income (ANI), a non-GAAP measure, was $82.9 million, or $0.66 per share.
On operating metrics, AUM grew to $261.0 billion, fee-earning AUM rose 19% to $158.2 billion, and undeployed fee-earning capital climbed 42% to $42.4 billion. Accrued carried interest allocations increased 37% to $2.38 billion, reflecting potential future performance fees.
How the Market Reacted
STEP shares were little changed immediately after the release, with the stock holding near $42.69 in the wake of the report, according to market data. The muted reaction reflects a familiar pattern for the company: investors tend to discount GAAP swings driven by unrealized carried interest and equity-based compensation, focusing instead on recurring fee growth and AUM trends. The 61% jump in fee-related earnings and the expanding FRE margin were viewed favorably, while the GAAP loss and lighter-than-expected realized performance fees tempered enthusiasm. Sentiment remains anchored to whether StepStone can sustain its fundraising momentum and convert undeployed capital into higher fee-earning AUM over coming quarters.
What to Watch Going Forward
Looking ahead, investors will focus on StepStone's ability to sustain fee-related earnings growth as the core earnings engine. The company's record undeployed fee-earning capital of roughly $42.4 billion represents a pipeline for future management fees, but the pace at which that capital is activated will be a key variable. Margin trends also deserve attention. The expansion in the FRE margin to 42% signals improving operating leverage, yet equity-based compensation and performance fee-related expenses remain significant cost items that can dampen reported profitability. Finally, realized performance fees will hinge on broader capital markets activity. With realized carried interest remaining modest relative to unrealized allocations, the timing and scale of exits across StepStone's funds will influence both earnings and investor perception of monetization. Private wealth subscriptions and continued dividend growth are additional signals to monitor as management balances capital returns with reinvestment in data and technology.
Using AI Tools in My Research Process
I often turn to Tickeron’s AI Screener when analyzing names like STEP to quickly filter for patterns in fee growth and AUM trends across the asset management space. It helps surface comparable setups and keeps my review process efficient without replacing deeper fundamental work.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
STEP's RSI Indicator recovers from oversold territory
The RSI Oscillator for STEP moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 29 similar instances when the indicator left oversold territory. In 25 of the 29 cases the stock moved higher. This puts the odds of a move higher at 86%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 28, 2026. You may want to consider a long position or call options on STEP as a result. In 77 of 100 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 77%.
The Moving Average Convergence Divergence (MACD) for STEP just turned positive on October 22, 2026. Looking at past instances where STEP's MACD turned positive, the stock continued to rise in 41 of 49 cases over the following month. The odds of a continued upward trend are 84%.
STEP moved above its 50-day moving average on November 04, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +6.03% 3-day Advance, the price is estimated to grow further. Considering data from situations where STEP advanced for three days, in 237 of 315 cases, the price rose further within the following month. The odds of a continued upward trend are 75%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where STEP declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 74%.
STEP broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for STEP entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 60 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 62 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: STEP's P/B Ratio (-7.081) is slightly lower than the industry average of (2.440). P/E Ratio (-6.026) is within average values for comparable stocks, (-3.350). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.319). Dividend Yield (0.028) settles around the average of (0.267) among similar stocks. P/S Ratio (1.926) is also within normal values, averaging (15.694).
The Tickeron Price Growth Rating for this company is 70 (best 1 - 100 worst), indicating slightly worse than average price growth. STEP’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 78 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. STEP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock better than average.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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