StepStone Group (STEP) Earnings Date & Reports

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.
• For additional detail on STEP's Major News, Today's Price Move, Price Targets, and Forecast, visit the dedicated pages.
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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.

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.

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.

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Market Reaction and Investor Sentiment

StepStone 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.

Forward Outlook and Key Factors to Monitor

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.

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