STEP

The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how custody bank stocks fared in Q2, starting with StepStone Group (NASDAQ:STEP). Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space. The 16 custody bank stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.2%. Thankfully, share prices of the companies have been resilient as they are up 5.6% on average since the latest earnings results. Operating as both an advisor and asset manager with over $100 billion in assets under management, StepStone Group (NASDAQ:STEP) is an investment firm that provides clients with access to private market investments across private equity, real estate, private debt, and infrastructure. StepStone Group reported revenues of $300.6 million, up 26.6% year on year. This print fell short of analysts’ expectations by 3.9%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA and AUM estimates. StepStone Group delivered the weakest performance against analyst estimates among its peers. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $50.34. Is now the time to buy StepStone Group? Access our full analysis of the earnings results here, it’s free. With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ:HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors. Hamilton Lane reported revenues of $275.3 million, up 56.5% year on year, outperforming analysts’ expectations by 21%. The business had an incredible quarter with a beat of analysts’ EPS and AUM estimates. Hamilton Lane pulled off the biggest analyst estimate beat in the group. The market seems happy with the results as the stock is up 11.7% since reporting. It currently trades at $106.04. Is now the time to buy Hamilton Lane? Access our full analysis of the earnings results here, it’s free. Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE:VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products. Voya Financial reported revenues of $1.88 billion, flat year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates. Voya Financial delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 2.9% since the results and currently trades at $103.61. Read our full analysis of Voya Financial’s results here. With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE:FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors. Federated Hermes reported revenues of $502.8 million, up 18.3% year on year. This print surpassed analysts’ expectations by 2.3%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ AUM and EPS estimates. The stock is up 8.6% since reporting and currently trades at $64.57. Read our full, actionable report on Federated Hermes here, it’s free. Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE:WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors. WisdomTree reported revenues of $177.2 million, up 57.3% year on year. This number beat analysts’ expectations by 3.4%. It was an exceptional quarter as it also put up an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates. WisdomTree achieved the fastest revenue growth among its peers. The stock is up 30.2% since reporting and currently trades at $24.48. Read our full, actionable report on WisdomTree here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Over the past six months, StepStone Group’s stock price fell to $48.28. Shareholders have lost 15.1% of their capital, which is disappointing considering the S&P 500 has climbed by 13.1%. This was partly driven by its softer quarterly results and might have investors contemplating their next move. Following the pullback, is this a buying opportunity for STEP? Find out in our full research report, it’s free. Operating as both an advisor and asset manager with over $100 billion in assets under management, StepStone Group (NASDAQ:STEP) is an investment firm that provides clients with access to private market investments across private equity, real estate, private debt, and infrastructure. A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, StepStone Group’s revenue grew at an incredible 26.9% compounded annual growth rate over the last five years. Its growth beat the average financials company and shows its offerings resonate with customers. We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable. StepStone Group’s EPS grew at a solid 14.7% compounded annual growth rate over the last five years. This performance was better than most financials businesses. Return on equity, or ROE, quantifies financial firm profitability relative to shareholder equity — an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth. Over the last five years, StepStone Group has averaged an ROE of negative 10.6%, a disappointing result relative to the majority of firms putting up 25%+. But we wouldn’t write off StepStone Group given its success in other measures of financial health. StepStone Group’s merits more than compensate for its flaws. After the recent drawdown, the stock trades at 18.8× forward P/E (or $48.28 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free. ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

StepStone Group’s second quarter results were met with a negative market reaction, as both revenue and adjusted earnings per share came in below Wall Street expectations. Management attributed the quarter’s performance to continued strength in fee-related earnings, driven by robust fundraising across both commingled and managed accounts, as well as the rapid growth of its Private Wealth platform. CEO Scott Hart described the company’s client retention as “enviable” and highlighted expansion in Private Wealth subscriptions, which surpassed $2.8 billion for the quarter. Management also acknowledged that changes in fee structures and the timing of fund activations had a noticeable impact on margins and revenue growth this quarter. Is now the time to buy STEP? Find out in our full research report (it’s free). Revenue: $300.6 million vs analyst estimates of $312.8 million (26.6% year-on-year growth, 3.9% miss) Adjusted EPS: $0.48 vs analyst expectations of $0.50 (4.8% miss) Operating Margin: -68.1%, down from -24.9% in the same quarter last year Market Capitalization: $3.96 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Brennan Hawken (BMO): Asked about the impact of fundraising and AUM growth on fee rates. CFO David Park explained fee rates will remain flat near-term due to changes in secondaries fund structures, with potential for growth as Private Wealth expands. Kenneth Worthington (JPMorgan): Questioned the management of equity lockups and cash needs related to the Private Wealth buy-in. President Michael McCabe outlined capital management plans, emphasizing conservative leverage and staged equity lockup expirations. Benjamin Budish (Barclays): Inquired about the impact of distribution fees from the wealth channel and their implications for margins. Park clarified that these fees are tied to Private Wealth growth and are already incorporated in the company’s run-rate expenses. Michael Brown (UBS): Asked about the adoption and fundraising progress of the flagship private equity secondaries fund. CEO Scott Hart noted strong initial fundraising, positive LP feedback, and continued interest in the secondaries market. Michael Cyprys (Morgan Stanley): Probed the long-term growth limits of Private Wealth and the monetization potential of data partnerships. Jason Ment, President, expressed confidence in sustained growth given low market penetration and outlined ambitions for data analytics as a future business line. In the coming quarters, focus will be on (1) progress toward the buy-in of the Private Wealth profits interest and its financial impact, (2) sustained fundraising momentum and net inflows across the Private Wealth and institutional channels, and (3) the pace of adoption and monetization for new data analytics and benchmarking partnerships. Additional attention will be paid to product launches and international expansion efforts. StepStone Group currently trades at $48.09, down from $50.33 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET Chief Executive Officer - Scott Hart President and Co-Chief Operating Officer - Jason Ment Head of Strategy - Mike McCabe Chief Financial Officer - David Park Head of Investor Relations - Seth Weiss Operator: Ladies and gentlemen, thank you for standing by. Welcome to the First Quarter Fiscal Year 2027 StepStone Group Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Seth Weiss, Head of Investor Relations. Please go ahead. Seth Weiss: Thank you. Joining me on today's call are Scott Hart, Chief Executive Officer; Jason Ment, President and Co-Chief Operating Officer; Mike McCabe, Head of Strategy; and David Park, Chief Financial Officer. During our prepared remarks, we will be referring to a presentation, which is available on our Investor Relations website at shareholders.stepstonegroup.com. Before we begin, I would like to remind everyone that this conference call as well as the presentation, contains certain forward-looking statements regarding the company's expected operating and financial performance for future periods. Forward-looking statements reflect management's current plans, estimates and expectations and are inherently uncertain and are subject to various risks, uncertainties and assumptions. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to changes in circumstances or a number of risks or other factors that are described in the Risk Factors section of StepStone's periodic filings. These forward-looking statements are made only as of today, and except as required, we undertake no obligation to update or revise any of them. Today's presentation contains references to non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, our presentation, and our filings with the SEC. Turning to our financial results for the first quarter of fiscal 2027. Beginning with Slide 3, we reported a GAAP net loss attributable to StepStone Group, Inc. of $116 million or $1.41 per share. As a reminder, GAAP accounting requires us to factor the change in fair value of the buy-in of the StepStone Private Wealth profits interest through our income statement, which drove the negative GAAP earnings result this quarter. We have a put-call option agreement in place with an entity composed of members of the Private Wealth team that enables StepStone's buy-in of these profits interests. The Private Wealth team entered the put period in the June quarter and StepStone will enter into the call period in the third quarter of calendar 2027. Moving to Slide 5. We generated fee-related earnings of $106 million, up 30% from the prior year quarter, and we generated an FRE margin of 39%. The quarter reflected retroactive fees primarily from our infrastructure secondaries fund. Retroactive fees contributed $1.1 million to revenue, which compares to retroactive fees of $2.9 million in the first quarter of the prior fiscal year. When excluding the impact of retroactive fees, core fee-related earnings were $105 million, up 33% relative to the prior year quarter, and our core FRE margin remains at 39%. We earned $60 million in adjusted net income for the quarter or $0.48 per share. This is up from $49 million or $0.40 per share in the first quarter of the last fiscal year, driven primarily by higher fee-related earnings. I'll now hand the call over to Scott. Scott Hart: Thank you, Seth, and good evening. We kicked off our fiscal 2027 year with outstanding financial results, robust and balanced fundraising, and a healthy pipeline that gives us visibility for continued earnings growth. Beginning with results, we are comfortably generating run rate management and advisory fees of over $1 billion per year and generating run rate fee-related earnings of well over $400 million per year. These are numbers that we frankly could not have imagined just 6 short years ago as we were preparing for our IPO. As I reflect on our progress, I am proud of both the magnitude of our results and the path we took to get here, driven by an unwavering commitment to investing for the long term in solutions that will best serve our clients and provide value for our shareholders, balanced growth across asset classes and geographies, and by pursuing selective, synergistic, and highly strategic M&A. Looking forward, we continue to follow this playbook. First, we are generating consistent growth from our existing business. Our client-centric mission leads to enviable client retention as well as extension and expansion opportunities across our advisory, managed account, and commingled fund investors. Second, we are investing in long-term growth initiatives, including data and technology and solutions for the U.S. defined contribution retirement market, where we see potential to replicate the success we are achieving in Private Wealth. And third, we may continue to pursue opportunistic M&A with our current focus on acquiring our noncontrolling interest at a material discount to our public valuation. We now own 65% of our infrastructure, private debt, and real estate asset classes, and we plan to buy in the Private Wealth profits interest as soon as we are contractually able. The Private Wealth buy-in will materially increase adjusted net income by enabling StepStone to capture the full economics of one of our highest growth businesses at a significant discount to our prevailing multiple. We expect this will provide material earnings per share accretion that should only compound into the future. Shifting to fundraising. We generated another double-digit quarter with $10 billion of gross inflows split between managed accounts and commingled funds. Our Private Wealth platform generated another record quarter with $2.8 billion of subscriptions, while total Private Wealth assets surpassed $21 billion, more than doubling the net asset value over the last year. We continue to see a high persistency of investors within our funds with total platform redemptions under 2% for the quarter. SPRING, our venture and growth equity fund, continues to be a standout. SPRING has tapped into the excitement of the innovation economy, investing in native artificial intelligence companies, AI infrastructure, cybersecurity, energy, aerospace and defense, and yes, even space exploration. We believe the $1.7 billion of SPRING subscriptions this quarter include an elevated level of inflows. While the pace of subscriptions may normalize, we expect SPRING will continue to generate a healthy rate of ongoing subscriptions and that our overall Private Wealth platform will generate a strong level of annual inflows, consistent with the pace we highlighted at the beginning of this year. I'll now turn the call over to Mike, to speak about fundraising, asset growth, and shareholder distributions. Michael McCabe: Thanks, Scott. Turning to Slide 8. We generated nearly $40 billion of gross AUM additions over the last year, our best 12-month period ever. This fundraising was split evenly with approximately $20 billion coming from each of managed accounts and commingled funds, including Private Wealth. Of the managed account additions, $9 billion or 45% came from a combination of new accounts or the expansion of existing accounts into new asset classes or strategies. During the quarter, we generated over $10 billion in gross additions, including approximately $4.5 billion of managed account additions and $5.5 billion of commingled fund inflows. Notable additions to our drawdown commingled funds included $1 billion first close in our newest venture capital secondaries fund, $500 million of closes in our infrastructure co-investment fund, $300 million of closes in our private equity secondaries funds, and $200 million of closes in our private equity co-investment fund. We have also launched the next vintages of our special situations real estate secondaries fund and our multi-strategy growth equity fund, with first closes expected in the coming quarters and activations to follow. Turning to our evergreen funds. We generated $2.8 billion of subscriptions in our Private Wealth suite of offerings, growing the platform to over $21 billion as of the end of the quarter. As Scott mentioned, SPRING drove nearly $1.7 billion of these inflows in the quarter. SPRIM, our all private markets fund, generated over $400 million of subscriptions, while the remaining inflows were split between our private equity, credit and infrastructure evergreen funds. Additionally, we generated over $500 million of subscriptions in our evergreen non-traded BDC, SCRED, growing the fund to $2.8 billion. We continue to make progress on expanding our syndicate with over 800 partners selling StepStone Private Wealth funds. Among the platforms that have been selling StepStone funds for at least a year, those distributing partners sell an average of 2 funds, a figure that has steadily increased over time. We view growth in the syndicate and increase in multi-fund adoption as key indicators for the health of our Private Wealth distribution and of the strength of our deep relationships with our partners in the wealth channel. Slide 9 shows our fee-earning assets by structure and asset class. For the quarter, we increased fee-earning assets by nearly $10 billion. The drivers of our growth in fee-earning AUM included record subscriptions in Private Wealth, activations of commingled funds, new commitments to our drawdown funds and healthy deployment by our managed accounts. We activated our 2 PE secondaries funds in June, which was on the early side of our expected range, resulting in nearly $3 billion of additions to our fee-earning assets. Even with these large activations and steady managed account deployment, we maintained a healthy balance in our undeployed fee-earning capital, or UFEC, of over $39 billion as strong fundraising in managed accounts and the first close of our venture capital secondaries fund helped to replenish the UFEC balance. The combination of fee-earning assets plus UFEC grew to approximately $193 billion, which is up $9 billion sequentially and is up $37 billion from a year ago. This translates to a 19% annual organic growth rate since fiscal 2022. Consistent with our commitment to communicate forthcoming distributions out of fee-earning AUM, we anticipate an expiration of a managed account of roughly $1.5 billion next quarter. The mandate carries a fee rate in line with the average of our SMA fee rate, but there will be a partial offset to adjusted net income from noncontrolling interest. Slide 10 shows the evolution in our fee revenues. We generated a blended management fee rate of 65 basis points over the last 12 months, consistent with the fee rate from fiscal 2025, as favorable mix shift to our evergreen funds offset a moderation in retroactive fees. And finally, I am pleased to announce that we are raising our quarterly dividend by 18% from $0.28 per share to $0.33 per share, reflecting strong, consistent and sustainable growth of our fee-related earnings. Furthermore, we have repurchased an additional $21 million of shares since the end of fiscal 2026. In total, we have executed $30 million of our $100 million repurchase authorization, buying over 710,000 shares at an average price of $41.87 since announcing the authorization in March. I'll now turn the call over to David, to speak to our financial highlights. David Park: Thanks, Mike. Turning to Slide 12. We earned fee revenue of $271 million, up 27% from the prior year quarter. The increase was driven by growth in fee-earning AUM across the platform with particularly strong growth in commingled funds across both drawdown and evergreen funds. Fee-related earnings were $106 million, up 30% from a year ago. FRE margin was 39% for the quarter, both on a reported and adjusted basis after normalizing for retroactive fees. Shifting to expenses. Adjusted cash-based compensation was $117 million. This is up from last quarter's $111 million. The increase reflected the impact of our annual merit increase, which took effect April 1, as well as headcount growth. The cash compensation ratio adjusted for retroactive fees was 43%. Adjusted equity-based compensation was $7 million. Both the cash compensation ratio and adjusted equity-based compensation are in line with the expectations we set out on our year-end earnings call and are good run rates to use for the remainder of the fiscal year, understanding there could be some variability quarter-to-quarter. General and administrative expenses were $42 million, up $10 million from the prior year quarter. About $3 million of the increase reflects platform distribution fees related to our Private Wealth funds, which are running at roughly $5 million per quarter. These expenses are charged on a trailing basis of Private Wealth NAV at certain distribution partners. We expect this expense to generally grow in line with Private Wealth assets. Gross realized performance fees were $30 million for the quarter and $16 million net of related compensation expense. As a reminder, performance fees can be episodic quarter-to-quarter, and we generally do not control the pace of realizations. Our investment performance continues to be strong, supporting our growing backlog of future carry. Sticking with performance fees, we are on pace for another strong year of Private Wealth incentive fees driven by SPRING returns. These incentive fees will be recognized in our fiscal third quarter, consistent with SPRING's annual crystallization at the end of December. SPRING has delivered extraordinary results over the first half of the calendar year, generating 23% net returns, supported by several significant value creation events. While we do not view these exceptionally strong returns as typical, we believe SPRING is a durable fund that benefits from our robust sourcing efforts and broader StepStone flywheel to generate attractive performance over time. As we track SPRING's results, we may see more near-term volatility than usual from public market valuation movements. As private markets investors, we actively and prudently manage the exit of public positions in the ordinary course, subject to contractual lockups and market conditions. Importantly, because SPRING'S performance fees crystallize annually at the end of December, investors in the fund are not charged performance fees based on intra-period movements in underlying valuations. Taken together, adjusted net income per share was $0.48, up from $0.40 in the prior year quarter, driven by growth in fee-related earnings. Moving to key items on the balance sheet on Slide 13. Net accrued carry finished the quarter at $935 million, up 19% from a year ago. Our net accrued carry is relatively mature. Over 70% are tied to programs that are older than 5 years, which means that these programs are ready to harvest. Our own investment portfolio ended the quarter at $363 million. This concludes our prepared remarks. I'll now turn it back over to the operator to open the line for any questions. Operator: [Operator Instructions] And the first question will come from Brennan Hawken with BMO. Brennan Hawken: So Mike, you spoke to a bunch of the moving pieces in UFEC and some -- but my question is, when we think about some of those moving pieces and some of those adjustments, could you walk us through what the impact would be on the fee rate here in the quarter? Given how much fundraising and how much AUM grew, the translation into base fees wasn't quite as I would expect, and I thought maybe timing might be part of it. Michael McCabe: So maybe a few different comments there. Thanks, Brennan, for the question. I'll start just kind of generally talking about UFEC, how we see that converting into fee-earning AUM and the likely fee rates there. Maybe then David can kind of comment specifically on what you saw in the quarter and maybe if you're doing sort of a point-to-point estimate there, why it may not have looked exactly as expected. But look, as we think about UFEC, that will continue to be a pipeline of future fee-earning AUM growth for us, still stands at $39 billion. We mentioned there was about $3 billion of activations during the quarter with some of the additional fundraising right back up to $39 billion, and there's probably still about $3 billion that needs to be activated. The remaining $36 billion will be subject to deployment. And if we look at the average fee rate across that UFEC number today, it is generally in line with our overall fee rate. So as that's deployed, I wouldn't expect a major change there. But again, maybe over to David to comment on the specific quarter and the timing of some of the commingled fund activations. David Park: Yes. I think if you look back over the last year or so, you've seen a steady, progressive increase in the average fee rate, right? And that was largely due to the mix shift from SMA to commingled funds driven by not only the fundraising for commingled funds, but the growth in Private Wealth assets. Last quarter, we had mentioned in our prepared remarks that we did have a change in the fee structure for our PE secondaries and GP-led secondaries funds and that the impact would result in a relatively muted growth in the average fee rate. That's exactly what you're seeing right now as we raise capital and we activated the secondaries funds in June, you're going to see a little bit of fee pressure just from the lower fee rate, offset by growth in Private Wealth assets. So I think what we had mentioned was you should expect to see the commingled fund fee rate stay relatively flattish over the next few quarters to a year as the secondaries funds continue to fundraise. And once that is fully raised, then you should see the resumption of the progress in fee rates as Private Wealth assets grow and as the fee rate steps up for the secondaries funds. Brennan Hawken: Got it. Okay. And then you touched on this a bit in your prepared remarks. The strength in SPRING is really remarkable. And you touched on some of the excitement it's tapping into, including space exploration. Now that there's a decent sized position that is public in that fund, can you walk through what we should expect as far as tracking of performance of that public equity and translation into SPRING'S performance and how maybe a little bit of extra texture around the management of that position that you touched on briefly in your prepared remarks? Seth Weiss: Yes. Thanks. I'll start and Jason may jump in here as well. But I think the first one I'd make is, look, I think this fund SPRING is not about any one company or a small group of companies. There's over 2,000 positions in the fund. There's about 75 or so that drive 75% of the net asset value. And I think interestingly, while it was an incredibly strong year of performance in the year to June 30, even if you stripped out the performance of SpaceX was still a fund that was up in the sort of mid- to high-20s or double what we target for this fund and well above even some of the public benchmarks. So strong performance really across the board here. With the recent trading down in that position as well as continued fundraising and markups across the portfolio, that position is now more of a mid-teens-ish position down from sort of its peak there. But to your point, as it begins to come off lockup, look, our view is as a private market investor, we are -- it's not our job to be long-term holders of public positions. And so we will look to exit in an orderly way, but trying to manage that on behalf of the investors in the fund. And so stay tuned in future quarters here, but certainly will introduce some level of volatility into the performance as a result of the public positions, but something that can be managed going forward. Operator: And the next question is going to come from Ken Worthington with JPMorgan. Kenneth Worthington: Maybe first, talk about the buyout of the profit interest in the Private Wealth business. There were a couple of short reports this quarter expressing concern about, one, the amount of stock likely to be issued to the management team; and two, the cash portion of the raise. So how do you think about the -- about managing the lockup expirations sort of in the following 3 years post the buyout? Anything you're thinking about to just make sure the stock price is sort of stable if and as those shares come to market? And then on the cash side, clearly, you're not concerned given the special dividend, the buyback and the increase in the regular dividend. But can you talk about what you've put into place thus far, what you're thinking about in terms of managing that cash portion? Are you going to increase the size of the revolver? Are there any things that you've done in preparation that you could share with us? Michael McCabe: Thanks, Ken. It's Mike here. Maybe I'll start with the cash portion and maybe ask Scott to talk a little bit about your first part of the question with respect to the potential overhang as the lockups expire on the equity portion of the buy-in. But in terms of capital management priorities, clearly, our near-term focus is preparing for the buy-in of the profits interest associated with the Private Wealth platform. And as a reminder, the structure provides a lot of flexibility, including the ability to fund up to 75% of the consideration in StepStone equity with the balance, as you point out, Ken, being funded in cash. I think also it's worth revisiting more broadly that from a philosophical standpoint, our capital management approach remains unchanged. And we operate a capital-light business and our first priority is to invest in growth. Beyond that, we look to returning capital to shareholders while maintaining flexibility for strategic initiatives like this one. I think given the upcoming cash requirement associated with the buy-in, we have a couple of options available to us, beginning with cash on hand and cash generating from the business. And as part of that, we will certainly continue to evaluate what the appropriate level is and timing of discretionary choices like the capital return and including future share repurchases. We did certainly signal strength in the prepared remarks here with the buybacks that we have completed so far. But we're going to certainly revisit that as we prepare for the buy-in of the Private Wealth platform as well as we'll revisit all options are on the table here with respect to discretionary spend, including the annual supplemental dividend, as you know, is tied to performance fees. And lastly, I think we also have a very strong track record in the capital markets and currently maintain an investment-grade rating from Kroll, which is supported by the debt private placement and revolver we put in place a couple of years ago. And you can expect that we will certainly reaccess the capital markets to fund the additional cash portion that is required above and beyond what we have on hand and what we can extract from our operating cash flows. And then I would just say, historically, we've taken a pretty conservative approach to leverage, and you can expect that to continue. The incremental earnings associated with the Private Wealth buy-in should provide meaningful capacity for us to fund a decent portion of the cash consideration with debt while maintaining conservative leverage ratios. But with that, I'll maybe ask Scott to touch on how the lockups will expire and some of the thoughts around there. Scott Hart: Yes. No, Ken, as you mentioned, we have the ability to fund up to 75% of the purchase price in the form of stock or units there, 30% of which are tradable immediately, the remainder of which is locked up over a 3-year period. Look, in a lot of ways, it resembles the same types of lockups that the management team had at the time of the IPO, resembles the types of lockups that the management team had post the Greenspring acquisition, similar to some of the lockups that our asset class teams have as we continue the buy-in of the asset class interest. So something that has been part of our playbook, both in terms of making sure to generate alignment of incentives, but also to help in terms of the orderly potential sell-down of those interests over time. And obviously, this one has the potential to be sizable. But I think that past experience gives you a sense for the orderly fashion in which we will look to manage it going forward. Kenneth Worthington: Great. And maybe just as a follow-up, Mike, you mentioned a couple of times wanting to maintain sort of a conservative leverage position. What does that mean? Like how conservative? Clearly, the more debt you use to finance this, the more accretive the buyback -- the buy-in becomes. What's your comfort zone in terms of what is a conservative leverage position? Michael McCabe: I think the bellwether that we're looking to inform that decision really revolves around the rating that we receive. We're currently, as I mentioned, enjoying an investment-grade rating A+. And I think we're going to start that as our opening position and see how far we can go in the debt capital markets while maintaining that strong investment-grade rating. And I think that's really our starting point, Ken. Operator: And the next question will come from Ben Budish with Barclays. Benjamin Budish: Maybe, David, in your prepared remarks, you talked a bit about distribution fees coming in from the wealth channel. As I recall in the past, when this sort of became a bigger narrative for some of the bigger public peers, you were sort of -- it didn't impact you guys as much, I think, for a variety of reasons. So I'm curious, it doesn't sound like it's anything that's accelerating, but just curious if anything has changed recently, if the mix of distribution between RIAs and Wires, or U.S. versus international has changed? And are there any other implications we should think about as we think about your longer-term margin profile? Again, it sounds like you've indicated that you kind of -- that $5 million should grow with the wealth platform, but any other things we should be thinking about from that perspective? David Park: Yes. Happy to answer that. Look, like we said, these trail fees are largely tied to private wealth assets. We're not concentrated in any single channel. We're nicely distributed between Wires, RIAs and IBDs. So again, it's going to depend on any given period on which channel raises the assets. Some have -- carry a higher fee than others, some carry no fee. So it's really going to depend. But generally speaking, I think it's fully baked into our run rate at that $5 million we had disclosed in the prepared remarks. And so I think the best assumption is as the wealth assets grow, you can assume that, that $5 million will continue to grow along with it. Benjamin Budish: All right. Helpful. And then maybe just curious if we could check in on some of the newer kind of tech and index initiatives, the partnership with FTSE Russell, Kroll, and PitchBook. I think some of this you started monetizing around the end of last year. But just curious if you could give us an update, receptivity and uptake from clients, anything like that. Michael McCabe: Thanks, Ben. There's no material update across the partnerships, although I'm pleased to report that we are starting to see adoption rates starting to tick up across the 3 partnerships we have in place with FTSE Russell, PitchBook, and Kroll. We're not at a certain scale yet where you'll start seeing a specific line item flow through the P&L under advisory revenue, but we're pleased with the way the outreach is going, the way the education is going in the market and the way the adoption rates are starting to tick up with subscriptions starting to flow in. We'll certainly keep you posted in the future quarters. And I think certainly by the end of this fiscal year, you might start seeing that line item in the P&L starting to reflect some of the activity in these partnerships. Operator: And our next question will come from Mike Brown with UBS. Michael Brown: You guys recently adjusted the fee structure on the flagship PE secondaries fund, as you mentioned earlier. Just curious a little bit about what you're seeing in terms of feedback from LPs as you've kind of gone out there with the newer terms. Have you noticed any maybe broadening in terms of participation levels in this first close relative to prior vintages when you've been out fundraising that fund? Scott Hart: Yes. No, thanks for the question. This is Scott. So look, it's hard to point to any one thing in terms of what is driving the activity and the fundraise, but I would say that we are off to a very strong start there, probably ahead of expectations, certainly ahead of where we were last time around with this commingled fund. So again, whether you point to the fee rate, whether you point to the performance, the quality of the platform or the overall market opportunity, and there does continue to be significant interest in the secondaries market more broadly, hard to point to any one thing, but it is resulting in a successful fundraise for us here. You heard Mike talk during the prepared remarks about the fact that we had activated the fund ahead of schedule, and that's across both of the flagship private equity secondaries fund as well as our GP-led secondaries fund as well here. So again, good receptivity, continued good interest. You've seen some of the first half statistics come out about the secondaries market. The first half was another sort of record first half and on pace for what very much looks to be another record year. Yet at the same time, there's not a tremendous amount of dry powder, only about a year's worth of dry powder that's available in the market there. And so we think very well positioned there. Just to put a couple of additional numbers on it with some smaller closings that we had during the quarter, that took the private equity secondaries fund to somewhere in the $2.5 billion range, the GP-led fund around $300 million based on what have been raised to-date and with incremental closings post quarter end, continued progress there. So making very good progress. Michael Brown: Okay. Great. I wanted to ask a little bit about the accrued carry here. So it's reached roughly $935 million. And I know that nobody has kind of crystal ball in the near term, but over 70% tied to programs older than 5 years. So any color about maybe how investors should think about the pace of how that will convert into realized performance revenue near term would be very helpful, but maybe just over the next couple of years would also be helpful? Michael McCabe: Yes. So look, maybe I'll step back and just spend a few seconds on the broader realization activity that we're seeing across the market, which obviously then plays into the performance-related earnings and realized carry over time here. I think in a lot of ways, the first half of this year kind of reminded us of the first half of last year where people came into the year with high expectations. Those expectations were probably not quite met as a result of some of the macro activity that took place in the first half of the year last year with tariffs this year with AI disruption, and war in the Middle East. But there have been some positive signs of life there. Certainly, GPs are looking to generate liquidity on behalf of their LPs, but are also trying to optimize their exits. And so one of the comments you've heard me make really probably over the last couple of years at this point is that a lot of the realization activity that you do see results in partial realizations as opposed to full realizations. And so whether that's through a continuation vehicle, a minority sale, the divestiture of a division, selling to a strategic but receiving stock in return that needs to be exited over time. There have been a number of different forms of partial realizations that we've seen. And what that can mean in some cases that it may not always translate into carry or performance fees if those funds that have a European waterfall have not returned cost plus preferred return or those vehicles with an American waterfall have not returned cost plus preferred return on that individual company. So I think we're seeing a little bit of a disconnect right now between some of the improving realization activity that hasn't yet flowed through in terms of carry. We do think that is starting to improve. We've seen a number of announced full exits, some of which will come through in the coming quarters. I think there's a strong pipeline of that activity as well. But as you say, difficult to predict. We don't have a crystal ball, and we don't control the exits in a lot of cases. I think as you move forward a couple of years and certain vehicles that have a European waterfall move into carry-paying mode, that's when you may see a more sort of consistent flow of realized performance earnings over time. Operator: And the next question will come from Alexander Blostein with Goldman Sachs. Anthony Corbin: This is Anthony on for Alex. Maybe just on SPRING, just given the high concentration of SpaceX, how is this kind of affecting how clients and advisers are thinking about the product today? And what are your expectations on gross flows and redemptions over the next few months? Jason Ment: Yes. Thanks, Anthony. Jason here. So as Scott noted earlier, concentration in SpaceX actually has muted a bit over the last quarter or so down to a mid-teens position. So clearly demonstrating our confidence in the power law where venture-backed companies select few drive the majority of the returns, but no longer what we would think of as an outsized position by any stretch. In terms of the go-to-market, as we talk about SPRING, whether that's 2 quarters ago, a quarter ago, a year ago or tomorrow, we've never sold it as access to a single company or even a select group of companies. It's designed to be access to a diversified portfolio of venture assets, obviously, with, again, a focus on the power law and as Scott mentioned earlier, 75 companies driving 75% of the NAV. In terms of the redemption activity, obviously, heretofore, it's been very low. And as we talk to the channel partners that are actively allocating to SPRING, have allocated in the past or contemplating onboarding it now, we continue to hear a lot of excitement, not about the names everybody knows, but really about the names that are going to be the companies of tomorrow that people are talking about. And that's consistent with the venture and growth sector for as long as we've been active in it. It's always about the companies of tomorrow, not the companies of today. In terms of the -- so in terms of future redemption activity, we're not hearing any pent-up demand for redemption. We always, with all of the evergreen funds, plan for and manage the portfolio in anticipation of maximum redemption per quarter or biannually, depending on which fund we're talking about, so that we're prepared from a liquidity perspective. And in terms of future flows, we continue to see high activity at the top of the funnel and SPRING, in particular, adoption into additional model portfolios. So continue to be very bullish on what we'll see going forward. Again, as we mentioned in the prepared remarks, last couple of quarters were definitely outsized. Again, we weren't marketing it as access to one or even a handful of specific companies, but you can't control activity out in the market, but interest continues to be quite strong. Anthony Corbin: Got it. That's helpful. Maybe staying on the evergreen topic. I believe the international exposure in your evergreen funds is fairly low. So how are you thinking about expanding distribution overseas? Jason Ment: Yes. So we have added dedicated personnel within territories that are fully focused on the wealth channel, and we've built that out over half a dozen-plus territories internationally today. The vast majority of their activity is around getting on platform as opposed to calling on advisers, right? And so as that kind of activity level balances out toward calling on advisers, rather than calling to get on platforms, we'll start to see a much more material uptake in terms of the funds. The second point that I'd make is we have really focused on enhancing brand awareness in different markets internationally through targeted outreach, not just calling campaigns but advertising and the like. Operator: [Operator Instructions] The next question comes from Michael Cyprys with Morgan Stanley. Michael Cyprys: Maybe just staying with private wealth. Clearly, this has become arguably one of the biggest growth engines for StepStone. So as you think out 3 to 5 years, curious what becomes the limiting factor in your view to sustaining this multibillion-dollar quarterly inflows that you've been putting up? Jason Ment: We don't see a limiting factor to being able to keep that multibillion pace up into the future. The TAM is quite high, penetration is very low. And these funds, in addition to being well tuned for the high net worth and mass affluent markets are also very likely going to be component parts of our solution for 401(k), which represents an equally large and less tapped market today. Michael Cyprys: Great. And then just as a follow-up question. Historically, you've monetized your investment expertise through management fees and carry. But as you broaden the business with data analytics, technology through some of the various partnerships with FTSE, Kroll, PitchBook you mentioned earlier, I guess, to what extent do you envision those becoming more meaningful business lines? Maybe you can help frame what success looks like for these data businesses? And maybe you could speak to some of your initiatives and steps you're looking to take there to help drive an inflection over the next 12 to 24 months. Michael McCabe: Thanks, Mike. This is certainly playing a long game in many ways. But the data that StepStone is sitting on is probably the deepest, broadest and largest data set in the industry across all the asset classes and strategies. The partnerships that we put in place have really been done so with a very long-term view, starting with FTSE Russell. In many ways, to Jason's point, as we start migrating into defined contribution, whether it's 401(k) or Scott pointed out model portfolios as another channel for us, we think benchmarking tools and analytical tools are going to be table stakes for accessing some of these markets. And we believe the FTSE Step suite of indices will become into focus and a priority for asset allocators, particularly in that segment of the market as they think about how to figure out transparency and governance and benchmarking returns, particularly in the retirement market. The industry has relied heavily over the years on this quarterly lagged benchmarking tools that I just -- we don't think are sustainable over the long term. So I think what we're creating with FTSE Russell is very long term. But I think the big economic model that I think we're all curious to see whether or not we can unlock is if some of these indices that we're creating with FTSE Russell could have an asset management solution wrapper attached to it. So stay tuned for more thoughts there. Certainly, the PitchBook partnership is an exciting one for us that will enable general partners and other members of the asset class to analyze performance at the deal level, not just at the fund level. So how managers can start benchmarking their returns by portfolio company in a specific GICS code or sector or geography, enterprise value or entry multiple, all of those deal level data points are now going to be available to the general partner community and other service providers to really assess how performance can be measured with transparency in the marketplace. And last but not least, given all of the attention that private credit has received over the last year or so, the partnership that we've created with Kroll, provides a variety of users in the industry how to better understand measuring risk at the loan level, not at the fund level data points. So all 3, we think, sets StepStone up to be the leading source of truth when it comes to data and technology in the private markets. Operator: And the next question will come from John Dunn with Evercore. John Dunn: Maybe just thinking about some of the newer strategies you guys have in private wealth. Maybe can you talk about like how your early experiences are tracking towards your prior experiences and maybe kind of openness to acceptance and potential for platform expansion domestically? Jason Ment: Sure. Thanks, John. I think that if you look at the adoption curve, we kind of call it the day 0 asset raise curve with SPRIM going first, if I look at each of the successive funds, every single one of them is at or above the SPRIM adoption curve today and really has been from inception of each of those funds. So there is no doubt that there is a benefit in this channel of having built the brand and the trust relationship starting with SPRIM that has helped us with each of the successive funds. If I look at our lived experience from a cross-sell perspective, multifund adoption perspective, Mike touched on it in the prepared remarks that we now average 2 funds per platform if the platform has been with us for at least a year. That number has definitely crept up over the last number of quarters. So we're very happy with the evidence of the relationship that we've built, that trust relationship we've built with each of our partners as evidenced by that. And if we look at the number of platforms, again, looking at that seasoned universe of they've been with us for more than a year, we're now over 50% of those platforms have adopted at least 2 funds with a growing number of platforms adopting 3, 4 and even 5 funds with us. John Dunn: Got it. And then maybe on the institutional side, any geographies you kind of point to as seeing accelerating demand or any shifts in strategy preference? Scott Hart: Thanks, John. Yes. So I think if you look at it over either the last quarter or the last 12 months, a couple of things. One, U.S. stands out as an area of strength, but some of that is driven by private wealth, which we've touched on. So if I exclude private wealth and focus on what you asked about institutional, the 3 broad geographies that stand out over both the last quarter and the last 12 months are U.S., Europe and then Asia plus Australia. And those things are driven by different things. I would say in the U.S., it's been the strong initial closings we've had on our venture secondaries and private equity secondaries funds. In Europe, it's been driven by, I'd say, mainly private credit and infrastructure, both some very strong separate account re-ups, but also strong fundraising across certain of our commingled vehicles there, things like infrastructure co-investments, things like our SCRED fund. And then if I think about Asia and Australia, there has probably been a bit more of a mix. Some of it is commingled fundraising, particularly in private equity across both co-investments and secondaries. And then in Australia, in particular, continued growth in separate accounts in areas like infrastructure. So again, no one geography driving anything, different drivers that are resulting in those 3 broad geographic regions standing out over the last 12 months. But hopefully, some of that color is helpful there. Operator: I am showing no further questions at this time. I would now like to turn the call back over to Scott for closing remarks. Scott Hart: Well, great. Well, thank you for your time today. I hope everyone enjoys the rest of their summer, and we look forward to updating you again next quarter. Thank you. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Before you buy stock in StepStone Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and StepStone Group wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. StepStone (STEP) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Interested in StepStone Group Inc.? Here are five stocks we like better. Operating performance improved despite a GAAP loss: StepStone reported a $116 million GAAP net loss tied to the fair-value accounting of its planned private wealth buy-in, while fee-related earnings rose 30% year over year to $106 million and adjusted net income increased to $60 million. Assets and fundraising expanded significantly: Fee revenue grew 27% to $271 million, while fee-earning assets plus undeployed capital reached approximately $193 billion. Private wealth and secondaries drove record inflows, including $2.8 billion in quarterly private wealth subscriptions and more than $39 billion in undeployed fee-earning capital. Shareholder returns and strategic ownership are advancing: StepStone plans to buy in private wealth profits interests when permitted, potentially using up to 75% equity, and raised its quarterly dividend 18% to $0.33 per share. The company has also repurchased $30 million of stock under its current authorization. 3 Late-Season Earnings Plays for Mid-Cap Traders StepStone Group (NASDAQ:STEP) reported a fiscal first-quarter 2027 GAAP net loss attributable to the company of $116 million, or $1.41 per share, while fee-related earnings and adjusted net income increased from the prior-year period. Head of Investor Relations Seth Weiss said the GAAP result reflected accounting for a change in the fair value of StepStone’s planned buy-in of profits interests associated with its private wealth business. The private wealth team entered its put period during the June quarter, and StepStone expects to enter its call period in the third quarter of calendar 2027. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth On a non-GAAP basis, StepStone generated fee-related earnings of $106 million, up 30% year over year, with a 39% fee-related earnings margin. Adjusted net income rose to $60 million, or $0.48 per share, from $49 million, or $0.40 per share, a year earlier. Chief Financial Officer David Park said fee revenue increased 27% from the prior-year quarter to $271 million, supported by growth in fee-earning assets across the company’s platform. The company ended the quarter with nearly $10 billion of sequential growth in fee-earning assets. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High StepStone’s fee-earning assets plus undeployed fee-earning capital reached approximately $193 billion, up $9 billion sequentially and $37 billion from a year earlier. Undeployed fee-earning capital totaled more than $39 billion after the company activated two private equity secondaries funds in June, adding nearly $3 billion of fee-earning assets. Park said StepStone’s blended management fee rate was 65 basis points over the trailing 12 months, unchanged from fiscal 2025. Growth in evergreen funds offset lower fee rates associated with recently revised terms for the company’s private equity secondaries and GP-led secondaries funds. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Management said it expects the commingled-fund fee rate to remain relatively flat over the next several quarters to a year as the secondaries funds continue raising capital. The company expects fee-rate expansion to resume after the funds are fully raised, driven by private wealth growth and fee-rate step-ups in the secondaries strategies. The company also expects a managed-account mandate of roughly $1.5 billion to expire in the next quarter. The mandate carries a fee rate in line with StepStone’s average separate managed account fee rate, though management noted there will be a partial offset to adjusted net income from non-controlling interests. Chief Executive Officer Scott Hart said the company recorded $10 billion of gross inflows during the quarter, split between managed accounts and commingled funds. Over the past 12 months, StepStone generated nearly $40 billion of gross asset additions, its strongest 12-month fundraising period, with roughly equal contributions from managed accounts and commingled funds. Private wealth was a major contributor. The platform recorded a quarterly record of $2.8 billion in subscriptions, lifting private wealth assets above $21 billion. Platform redemptions were below 2% during the quarter, according to Hart. The company’s SPRING venture and growth equity fund accounted for nearly $1.7 billion of private wealth subscriptions. Hart said the quarter’s subscription pace was elevated but that StepStone expects SPRING to continue generating healthy ongoing subscriptions. S Prime, the company’s all-private-markets offering, raised more than $400 million during the quarter, while other inflows were spread across private equity, credit and infrastructure evergreen funds. StepStone’s evergreen non-traded business development company, S-Cred, generated more than $500 million of subscriptions and grew to $2.8 billion. The company said more than 800 partners now distribute its private wealth funds. Among platforms that have been selling StepStone products for at least one year, the average platform distributes two funds. In drawdown funds, StepStone cited a $1 billion first close for its newest venture capital secondaries fund, $500 million of closes for an infrastructure co-investment fund, $300 million for private equity secondaries funds, and $200 million for a private equity co-investment fund. Park said SPRING generated a 23% net return during the first half of the calendar year, supported by several value-creation events. The fund’s incentive fees are expected to be recognized in StepStone’s fiscal third quarter because they crystallize annually at the end of December. Management said the fund’s results could experience more near-term volatility because of public-market valuation movements. Hart said SPRING has more than 2,000 positions, with approximately 75 investments accounting for 75% of net asset value. He said a previously larger public position had declined to a mid-teens percentage of the fund after recent trading and ongoing fundraising and portfolio markups. Net accrued carry rose 19% year over year to $935 million. Park said more than 70% of accrued carry was tied to programs older than five years. Hart said improving realization activity has not always translated directly into performance fees because many transactions have involved partial rather than full realizations, and because of preferred-return and waterfall structures. However, he said the company has seen a number of announced full exits that could contribute in coming quarters. Hart said StepStone intends to buy in the private wealth profits interests as soon as it is contractually permitted. The transaction would allow the company to capture the full economics of one of its fastest-growing businesses, he said. Head of Strategy Mike McCabe said the transaction can be funded with up to 75% StepStone equity, with the remainder in cash. StepStone expects to use available cash, operating cash flow and potentially capital markets financing for the cash portion while seeking to maintain its investment-grade credit rating. Hart said a portion of equity consideration would be immediately tradable, while the balance would be subject to a three-year lockup. The company raised its quarterly dividend by 18% to $0.33 per share from $0.28 per share. It also repurchased an additional $21 million of stock since the end of fiscal 2026. Since announcing its $100 million authorization in March, StepStone has repurchased $30 million of shares, or more than 710,000 shares, at an average price of $41.87. StepStone Group is a global private markets investment firm that provides specialized investment solutions across private equity, private credit and real assets. The firm offers customized portfolios, secondary interests, direct co-investments and tailored advisory services to institutional investors worldwide. StepStone's integrated research and data analytics platform supports its investment teams in sourcing opportunities and monitoring portfolio companies. Founded in 2007 as an independent private markets specialist, the company has grown its presence through both organic expansion and strategic partnerships. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "StepStone Group Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

StepStone Group Inc. (STEP) came out with quarterly earnings of $0.48 per share, missing the Zacks Consensus Estimate of $0.51 per share. This compares to earnings of $0.4 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -5.88%. A quarter ago, it was expected that this company would post earnings of $0.51 per share when it actually produced earnings of $0.57, delivering a surprise of +11.76%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. StepStone Group, which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $300.6 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.14%. This compares to year-ago revenues of $237.47 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. StepStone Group shares have lost about 22.4% since the beginning of the year versus the S&P 500's gain of 12.8%. While StepStone Group has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for StepStone Group was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.58 on $344.33 million in revenues for the coming quarter and $2.54 on $1.67 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, AlTi Global, Inc. (ALTI), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +166.7%. The consensus EPS estimate for the quarter has been revised 16.7% lower over the last 30 days to the current level. AlTi Global, Inc.'s revenues are expected to be $61.8 million, up 16.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StepStone Group Inc. (STEP) : Free Stock Analysis Report AlTi Global, Inc. (ALTI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NEW YORK, Aug. 06, 2026 (GLOBE NEWSWIRE) -- StepStone Group Inc. (Nasdaq: STEP), a global private markets investment firm focused on providing customized investment solutions and advisory and data services, today reported results for the quarter ended June 30, 2026. This represents results for the first quarter of the fiscal year ending March 31, 2027. The Board of Directors of the Company has declared a quarterly cash dividend of $0.33 per share of Class A common stock, payable on September 15, 2026, to the holders of record as of the close of business on August 31, 2026. StepStone issued a full detailed presentation of its first quarter fiscal 2027 results, which can be accessed by visiting the Company’s website at https://shareholders.stepstonegroup.com. Webcast and Earnings Conference Call Management will host a webcast and conference call today, Thursday, August 6, 2026, at 5:00 pm ET to discuss the Company’s results for the first quarter of the fiscal year ending March 31, 2027. The webcast will be made available on the Shareholders section of the Company’s website at https://shareholders.stepstonegroup.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register. A replay will also be available on the Shareholders section of the Company’s website approximately two hours after the conclusion of the event. To join as a live participant in the question and answer portion of the call, participants must register at https://register-conf.media-server.com/register/BIb7358a7075e744b1b4ef2e638196914a. Upon registering you will receive the dial-in number and a PIN to join the call as well as an email confirmation with the details. About StepStone Group StepStone Group Inc. (Nasdaq: STEP) is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. As of June 30, 2026, StepStone was responsible for approximately $913 billion of total capital, including $245 billion of assets under management. StepStone’s clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients, which include high-net-worth and mass affluent individuals. StepStone partners with its clients to develop and build private markets portfolios designed to meet their specific objectives across the private equity, infrastructure, private debt and real estate asset classes. Forward-Looking Statements Some of the statements in this release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. Words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions identify forward-looking statements. Forward-looking statements reflect management’s current plans, estimates and expectations and are inherently uncertain. The inclusion of any forward-looking information in this release should not be regarded as a representation that the future plans, estimates or expectations contemplated will be achieved. Forward-looking statements are subject to various risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, global and domestic market and business conditions, our successful execution of business and growth strategies, the favorability of the private markets fundraising environment, successful integration of acquired businesses and regulatory factors relevant to our business, as well as assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity and the risks and uncertainties described in greater detail under the “Risk Factors” section of our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 27, 2026, and in our subsequent reports filed with the SEC, as such factors may be updated from time to time. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use the following non-GAAP financial measures: fee revenues, adjusted revenues, adjusted net income (on both a pre-tax and after-tax basis), adjusted net income per share, adjusted weighted-average shares, fee-related earnings, fee-related earnings margin, gross realized performance fees and performance fee-related earnings. We have provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, the non-GAAP financial measures in this earnings release may not be comparable to similarly titled measures used by other companies in our industry or across different industries. For definitions of these non-GAAP measures and reconciliations to applicable GAAP measures, please see the section titled “Non-GAAP Financial Measures: Definitions and Reconciliations.” _______________________________(1)      Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.(2)      The supplemental cash dividend relates to earnings in respect of our full fiscal years 2025 and 2026, respectively.(3)      Fee revenues, adjusted revenues, FRE, FRE margin, gross realized performance fees, PRE, ANI, adjusted weighted-average shares and ANI per share are non-GAAP measures. See the definitions of these measures and reconciliations to the respective, most comparable GAAP measures under “Non-GAAP Financial Measures: Definitions and Reconciliations.”(4)      AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented. Does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV. (1)      Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. (1)      Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. Non-GAAP Financial Measures: Definitions and Reconciliations Fee Revenues Fee revenues represents management and advisory fees, net, including amounts earned from the Consolidated Funds which are eliminated in consolidation. We believe fee revenues is useful to investors because it presents the net amount of management and advisory fee revenues attributable to us. The table below presents the components of fee revenues. _______________________________(1)      Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.(2)      Includes income-based incentive fees from certain funds: Adjusted Revenues Adjusted revenues represents the components of revenues used in the determination of ANI and comprise fee revenues, adjusted incentive fees and realized carried interest allocations. We believe adjusted revenues is useful to investors because it presents a measure of realized revenues. The table below shows a reconciliation of revenues to adjusted revenues. _______________________________(1)      Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.(2)      Reflects the add-back of incentive fees for the Consolidated Funds, which have been eliminated in consolidation. Adjusted Net Income Adjusted net income, or “ANI,” is a non-GAAP performance measure that we present before the consolidation of StepStone Funds on a pre-tax and after-tax basis used to evaluate profitability. ANI represents the after-tax net realized income attributable to us. ANI does not reflect legacy Greenspring carried interest allocation revenues, legacy Greenspring carried interest-related compensation and legacy Greenspring investment income (loss) as none of the economics are attributable to us. The components of revenues used in the determination of ANI (“adjusted revenues”) comprise fee revenues, adjusted incentive fees and realized carried interest allocations. In addition, ANI excludes: (a) unrealized carried interest allocation revenues and related compensation, (b) unrealized investment income (loss), (c) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (d) amortization of intangibles, (e) net income (loss) attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary, (f) charges associated with acquisitions and corporate transactions, and (g) certain other items that we believe are not indicative of our core operating performance (as listed in the table below). ANI is fully taxed at our blended statutory rate. We believe ANI and adjusted revenues are useful to investors because they enable investors to evaluate the performance of our business across reporting periods. Fee-Related Earnings Fee-related earnings, or “FRE,” is a non-GAAP performance measure used to monitor our baseline earnings from recurring management and advisory fees. FRE is a component of ANI and comprises fee revenues less adjusted expenses which are operating expenses other than (a) performance fee-related compensation, (b) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (c) amortization of intangibles, (d) charges associated with acquisitions and corporate transactions, and (e) certain other items that we believe are not indicative of our core operating performance (as listed in the table below). FRE is presented before income taxes. We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business and our ability to cover direct base compensation and operating expenses from total fee revenue. The table below shows a reconciliation of GAAP measures to additional non-GAAP measures. We use the non-GAAP measures presented below as components when calculating FRE and ANI (as defined below). We believe these additional non-GAAP measures are useful to investors in evaluating both the baseline earnings from recurring management and advisory fees, which provide additional insight into the operating profitability of our business, and the after-tax net realized income attributable to us, allowing investors to evaluate the performance of our business. These additional non-GAAP measures remove the impact of Consolidated Funds that we are required to consolidate under GAAP, and certain other items that we believe are not indicative of our core operating performance. ______________________________(1)      Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.(2)      Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation, and deferred incentive fees that are not included in GAAP revenues.(3)      Reflects the removal of unrealized amounts associated with cash-based incentive awards tracked to the performance of a designated investment fund and unrealized amounts associated with deferred compensation plan liability adjustments.(4)      Reflects the removal of equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.(5)      Reflects the removal of amortization of intangibles, transaction-related costs, unrealized mark-to-market changes in fair value for contingent consideration obligation, the impact of consolidation of the Consolidated Funds and other non-core operating income and expenses.(6)      Reflects the realization of a seed capital investment in the StepStone Funds, which is eliminated in consolidation.(7)      Reflects the removal of interest income earned by the Consolidated Funds.(8)      Reflects the removal of amounts for Tax Receivable Agreements adjustments recognized as other income (loss), unrealized amounts associated with deferred compensation plan asset adjustments and the impact of consolidation of the Consolidated Funds. The table below shows a reconciliation of income (loss) before income tax to ANI and FRE. _______________________________(1)      Reflects the portion of pre-tax ANI attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary: The contribution to pre-tax ANI attributable to non-controlling interests in subsidiaries and profits interests and performance-related earnings / other income (loss) attributable to non-controlling interests in subsidiaries and profits interests presented above specifically related to the profits interests issued in the private wealth subsidiary is presented below. The contribution to pre-tax ANI attributable to non-controlling interests in subsidiaries and performance-related earnings / other income (loss) attributable to non-controlling interests in subsidiaries presented above specifically not attributable to the profits interests issued in the private wealth subsidiary is presented below. (2)      Reflects equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.(3)      Includes (income) expense related to the following non-core operating income and expenses: (4)      Represents corporate income taxes at a blended statutory rate applied to pre-tax ANI: (5)      Reflects the realization of a seed capital investment in the StepStone Funds, which is eliminated in consolidation.(6)      Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation, and deferred incentive fees that are not included in GAAP revenues.(7)      Reflects the removal of interest income earned by the Consolidated Funds.(8)      Reflects the removal of Tax Receivable Agreements adjustments recognized as other income (loss) ($(5.5) million for the three months ended March 31, 2026 and $1.3 million for the three months ended September 30, 2025), unrealized amounts associated with deferred compensation plan asset adjustments and the impact of consolidation of the Consolidated Funds. Fee-Related Earnings Margin FRE margin is a non-GAAP performance measure which is calculated by dividing FRE by fee revenues. We believe FRE margin is an important measure of profitability on revenues that are largely recurring by nature. We believe FRE margin is useful to investors because it enables them to better evaluate the operating profitability of our business across periods. The table below shows a reconciliation of FRE to FRE margin. Gross Realized Performance Fees Gross realized performance fees represents realized carried interest allocations and adjusted incentive fees. We believe gross realized performance fees is useful to investors because it presents the total performance fees realized by us. Performance Fee-Related Earnings Performance fee-related earnings, or “PRE,” represents gross realized performance fees less realized performance fee-related compensation. We believe PRE is useful to investors because it presents the performance fees attributable to us, net of amounts paid to employees as performance fee-related compensation. The table below shows a reconciliation of total performance fees to gross realized performance fees and PRE. ______________________________(1)      Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation. Adjusted Weighted-Average Shares and Adjusted Net Income Per Share ANI per share measures our per-share earnings assuming all Class B units, Class C units and Class D units in the Partnership were exchanged for Class A common stock in SSG, including the dilutive impact of outstanding equity-based awards. ANI per share is calculated as ANI divided by adjusted weighted-average shares outstanding. We believe adjusted weighted-average shares and ANI per share are useful to investors because they enable investors to better evaluate per-share operating performance across reporting periods. The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted weighted-average shares outstanding used in the computation of ANI per share. _______________________________(1)      Assumes the full exchange of Class B units, Class C units or Class D units in the Partnership for Class A common stock of SSG pursuant to the Class B Exchange Agreement, Class C Exchange Agreement or Class D Exchange Agreement, respectively. Key Operating Metrics We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business. Refer to the Glossary below for a definition of each of these metrics. Fee-Earning AUM _______________________________(1)      Contributions consist of new capital commitments that earn fees on committed capital and capital contributions to funds and accounts that earn fees on net invested capital or NAV.(2)      Distributions consist of returns of capital from funds and accounts that pay fees on net invested capital or NAV and reductions in fee-earning AUM from funds that moved from a committed capital to net invested capital fee basis or from funds and accounts that no longer pay fees.(3)      Market value, FX and other primarily consist of changes in market value appreciation (depreciation) for funds that pay on NAV and the effect of foreign exchange rate changes on non-U.S. dollar denominated commitments. Asset Class Summary _____________________________Note: Amounts may not sum to total due to rounding. AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented, and does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.(1)      Allocation of AUM by asset class is presented by underlying investment asset classification.(2)      Total capital responsibility equals assets under management (AUM) plus assets under advisement (AUA). Contacts Shareholder Relations:Seth [email protected] Media:Jordan Niezelski / Maggie [email protected] Glossary Assets under advisement, or “AUA,” consists of client assets for which we do not have full discretion to make investment decisions but play a role in advising the client or monitoring their investments. We generally earn revenue for advisory-related services on a contractual fixed fee basis. Advisory-related services include asset allocation, strategic planning, development of investment policies and guidelines, screening and recommending investments, legal negotiations, monitoring and reporting on investments, and investment manager review and due diligence. Advisory fees vary by client based on the scope of services, investment activity and other factors. Most of our advisory fees are fixed, and therefore, increases or decreases in AUA do not necessarily lead to proportionate changes in revenue. We believe AUA is a useful metric for assessing the relative size of our advisory business. Our AUA is calculated as the sum of (i) the NAV of client portfolio assets for which we do not have full discretion and (ii) the unfunded commitments of clients to the underlying investments. Our AUA reflects the investment valuations in respect of the underlying investments of our client accounts on a three-month lag, adjusted for new client account activity through the period end. Our AUA does not include post-period investment valuation or cash activity. AUA as of June 30, 2026 reflects final data for the prior period (March 31, 2026), adjusted for net new client account activity through June 30, 2026. NAV data for underlying investments is as of March 31, 2026, as reported by underlying managers up to the business day occurring on or after 100 days following March 31, 2026. When NAV data is not available by the business day occurring on or after 100 days following March 31, 2026, such NAVs are adjusted for cash activity following the last available reported NAV. Assets under management, or “AUM,” primarily reflects the assets associated with our separately managed accounts (“SMAs”) and focused commingled funds. We classify assets as AUM if we have full discretion over the investment decisions in an account or have responsibility or custody of assets. Although management fees are based on a variety of factors and are not linearly correlated with AUM, we believe AUM is a useful metric for assessing the relative size and scope of our asset management business. Our AUM is calculated as the sum of (i) the net asset value (“NAV”) of client portfolio assets, including the StepStone Funds and (ii) the unfunded commitments of clients to the underlying investments and the StepStone Funds. Our AUM reflects the investment valuations in respect of the underlying investments of our funds and accounts on a three-month lag, adjusted for new client account activity through the period end. Our AUM does not include post-period investment valuation or cash activity. AUM as of June 30, 2026 reflects final data for the prior period (March 31, 2026), adjusted for net new client account activity through June 30, 2026. NAV data for underlying investments is as of March 31, 2026, as reported by underlying managers up to the business day occurring on or after 100 days following March 31, 2026. When NAV data is not available by the business day occurring on or after 100 days following March 31, 2026, such NAVs are adjusted for cash activity following the last available reported NAV. Consolidated Funds refer to the StepStone Funds that we are required to consolidate as of the applicable reporting period. We consolidate funds and other entities in which we hold a controlling financial interest. Consolidated VIEs refer to the variable interest entities that we are required to consolidate as of the applicable reporting period. We consolidate VIEs in which we hold a controlling financial interest. Fee-earning AUM, or “FEAUM,” reflects the assets from which we earn management fee revenue (i.e., fee basis) and includes assets in our SMAs, focused commingled funds and assets held directly by our clients for which we have fiduciary oversight and are paid fees as the manager of the assets. Our SMAs and focused commingled funds typically pay management fees based on capital commitments, net invested capital and, in certain cases, NAV, depending on the fee terms. Management fees are only marginally affected by market appreciation or depreciation because substantially all of the StepStone Funds pay management fees based on capital commitments or net invested capital. As a result, management fees and FEAUM are not materially affected by changes in market value. We believe FEAUM is a useful metric in order to assess assets forming the basis of our management fee revenue. Legacy Greenspring entities refers to certain entities for which the Company, indirectly through its subsidiaries, became the sole and/or managing member in connection with the Greenspring acquisition. SSG refers solely to StepStone Group Inc., a Delaware corporation, and not to any of its subsidiaries. StepStone Funds refer to SMAs and focused commingled funds of the Company, including acquired Greenspring funds, for which the Partnership or one of its subsidiaries acts as both investment adviser and general partner or managing member. The Partnership refers solely to StepStone Group LP, a Delaware limited partnership, and not to any of its subsidiaries. Total capital responsibility equals AUM plus AUA. AUM includes any accounts for which StepStone Group has full discretion over the investment decisions, has responsibility to arrange or effectuate transactions, or has custody of assets. AUA refers to accounts for which StepStone Group provides advice or consultation but for which the firm does not have discretionary authority, responsibility to arrange or effectuate transactions, or custody of assets. Undeployed fee-earning capital represents the amount of capital commitments to StepStone Funds that has not yet been invested or considered active but will generate management fee revenue once invested or activated. We believe undeployed fee-earning capital is a useful metric for measuring the amount of capital that we can put to work in the future and thus earn management fee revenue thereon.

StepStone Group Inc. (STEP) reported $300.6 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 26.6%. EPS of $0.48 for the same period compares to $0.40 a year ago. The reported revenue represents a surprise of -2.14% over the Zacks Consensus Estimate of $307.17 million. With the consensus EPS estimate being $0.51, the EPS surprise was -5.88%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how StepStone Group performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Fee-Earning AUM (FEAUM) - Focused Commingled Funds: $70.31 billion versus the three-analyst average estimate of $66.20 billion. Fee-Earning AUM (FEAUM) - Total: $153.56 billion versus the three-analyst average estimate of $149.70 billion. Fee-Earning AUM (FEAUM) - Separately managed accounts (SMAs): $83.25 billion versus the three-analyst average estimate of $83.51 billion. Assets Under Advisement (AUA): $667.90 billion versus $657.34 billion estimated by two analysts on average. Assets Under Management (AUM): $245.35 billion compared to the $239.73 billion average estimate based on two analysts. Total revenues- Management and advisory fees, net: $269.17 million compared to the $267.47 million average estimate based on two analysts. Total revenues- Performance fees- Carried interest allocations- Realized: $28.57 million versus $38.9 million estimated by two analysts on average. Total revenues- Total performance fees: $109.72 million versus $152.32 million estimated by two analysts on average. Total revenues- Total carried interest allocations: $72.55 million versus $147.73 million estimated by two analysts on average. Total revenues- Performance fees- Carried interest allocations- Unrealized: $43.98 million versus the two-analyst average estimate of $108.83 million. View all Key Company Metrics for StepStone Group here>>> Shares of StepStone Group have returned +17.2% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StepStone Group Inc. (STEP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

StepStone Group Inc. (STEP) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.52 per share in its upcoming report, which represents a year-over-year change of +30%. Revenues are expected to be $307.17 million, up 29.4% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 5.33% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For StepStone Group, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -3.38%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that StepStone Group will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that StepStone Group would post earnings of $0.51 per share when it actually produced earnings of $0.57, delivering a surprise of +11.76%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. StepStone Group doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Financial - Miscellaneous Services industry, Chime Financial, Inc. (CHYM), is soon expected to post loss of $0.01 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +99.9%. Revenues for the quarter are expected to be $640.6 million, up 21.3% from the year-ago quarter. The consensus EPS estimate for Chime Financial, Inc. has been revised 5.6% lower over the last 30 days to the current level. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -25.81%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Chime Financial, Inc. will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report StepStone Group Inc. (STEP) : Free Stock Analysis Report Chime Financial, Inc. (CHYM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research