Executive Summary
StepStone Group reported strong top-line growth for QQ1 2026, with revenue of $366.3 million, up 96.5% year-over-year, and a gross margin of approximately 96.9%. However, GAAP profitability remained elusive as the quarter showed an operating loss of $20.97 million and a net loss of $38.42 million, yielding an EPS of -$0.49. The negative earnings were largely driven by elevated stock-based compensation and expanding operating costs associated with ongoing growth initiatives, despite robust cash flow from operations of $46.28 million and free cash flow of $45.19 million. Net cash from operating activities suggests underlying cash-generation potential, even as dividends and financing activity contributed to a net cash outflow for the period. The balance sheet shows a solid asset base but near-term liquidity metrics are modest (current ratio ~1.0) with a meaningful debt load and sizable goodwill/intangible assets reflecting prior acquisitions. The combination of strong fee-based revenue, discipline around fundraising, and continued investment in platform expansion positions StepStone to capitalize on longer-term AUM growth, albeit with near-term earnings volatility until SBC and growth investments normalize.
Key Performance Indicators
QoQ: -147.48% | YoY:-144.47%
QoQ: -104.17% | YoY:-345.00%
Key Insights
Revenue: $366.304 million (YoY +96.5%), Gross Profit: $354.880 million (YoY +230.6%), Operating Income: -$20.968 million (YoY -144.5%), Net Income: -$38.424 million (YoY -388.3%), EBITDA: -$9.544 million (EBITDA Margin: -2.6%), EPS: -$0.49 (YoY -345%), Gross Margin: 96.88%, Net Income Margin: -10.49%, Weighted Avg Shares: 77.846 million, Operating Cash Flow: $46.282 million, Free Cash Flow: $45.187 million, Dividends Paid: -$50.274 million, Cash at End of Period: $244.655 million, Total Assets: ...
Financial Highlights
Revenue: $366.304 million (YoY +96.5%), Gross Profit: $354.880 million (YoY +230.6%), Operating Income: -$20.968 million (YoY -144.5%), Net Income: -$38.424 million (YoY -388.3%), EBITDA: -$9.544 million (EBITDA Margin: -2.6%), EPS: -$0.49 (YoY -345%), Gross Margin: 96.88%, Net Income Margin: -10.49%, Weighted Avg Shares: 77.846 million, Operating Cash Flow: $46.282 million, Free Cash Flow: $45.187 million, Dividends Paid: -$50.274 million, Cash at End of Period: $244.655 million, Total Assets: $4,782.411 million, Total Liabilities: $3,084.999 million, Total Equity: $153.932 million, Current Ratio: ~1.0, Total Debt: $382.078 million, Net Debt: $137.947 million
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
366.30M |
96.51% |
N/A |
| Gross Profit |
354.88M |
230.61% |
N/A |
| Operating Income |
-20.97M |
-144.47% |
-147.48% |
| Net Income |
-38.42M |
-388.30% |
N/A |
| EPS |
-0.49 |
-345.00% |
-104.17% |
Management Commentary
Note: Transcript data not provided in the dataset. Below are synthesized themes investors typically expect from management comments in this context:
- Growth strategy and AUM prospects: Management often emphasizes scaling the platform, expanding private markets capabilities, and cross-selling across fund, direct, and co-investment channels.
- Profitability trajectory and cost discipline: With elevated stock-based compensation and expansionary spend, management would typically discuss steps to improve operating leverage as AUM grows and SBC normalizes.
- Fundraising market and timing: Comments usually address macro fundraising climate, timing of new commitments, and performance of underlying funds as drivers of long-term fee revenue.
Forward Guidance
No explicit forward-looking numerical guidance is provided in the QQ1 2026 data. Given StepStone’s business model, investors should monitor: (1) Net inflows and new fundraisings that expand management and incentive-based fees; (2) The trajectory of stock-based compensation as a driver of near-term margin volatility; (3) AUM evolution and performance-driven fees across direct, fund-of-funds, and secondary investments; (4) Expense discipline and headcount investment relative to revenue growth; (5) Macroeconomic conditions affecting private markets fundraising cycles. The near-term earnings cadence may continue to reflect SBC and reinvestment spend, while cash-generation strength (operating cash flow and free cash flow) provides flexibility for dividends and strategic investments. Key factors to watch: quarterly volatility in SBC, net inflows, performance of underlying investments, and any changes in regulatory or competitive dynamics in the asset management space.