StepStone Q1 FY2026 slides: AUM grows 18% despite net loss, dividend maintained

StepStone Group Inc (NASDAQ:STEP) reported mixed first-quarter fiscal year 2026 results on August 7, 2025, showing strong asset growth but a GAAP net loss, according to the company’s earnings presentation. The alternative asset manager maintained its quarterly dividend at $0.28 per share despite the challenges.

Quarterly Performance Highlights

StepStone reported a GAAP net loss of $12.0 million for the quarter ended June 30, 2025, with a loss of $38.4 million ($0.49 per share) attributable to StepStone Group Inc. Despite the GAAP loss, the company showed strong growth in key operational metrics, with assets under management (AUM) reaching $199.3 billion, up 18% year-over-year, and fee-earning AUM (FEAUM) growing 27% to $127.2 billion.

As shown in the following overview of Q1 FY2026 results:

Fee revenues increased 19% year-over-year to $212.7 million, while fee-related earnings (FRE) grew 13% to $81.2 million. However, adjusted net income (ANI) decreased 15% to $48.5 million, with ANI per share falling 17% to $0.40 compared to the same period last year.

"Excluding retroactive fees, fee revenues grew 32%, driven by FEAUM growth," the company noted in its presentation. Similarly, "excluding retroactive fees, FRE grew 45%, driven by growth in fee revenues and margin improvement."

Detailed Financial Analysis

The company’s GAAP consolidated statements of income show total revenues increased 95% to $364.3 million, but total expenses rose 204% to $423.3 million, resulting in the net loss:

On a non-GAAP basis, StepStone maintained a fee-related earnings margin of 38%, slightly down from 40% in the prior year quarter but significantly improved from 31% four fiscal years ago:

The company’s revenue streams remain well-diversified, with management fees representing the largest component of fee revenues. The blended management fee rate has increased from 0.52% in fiscal year 2021 to 0.64% in the last twelve months ended June 30, 2025, indicating the company’s ability to command higher fees despite market competition.

StepStone’s accrued carried interest, which represents potential future performance fees, grew 19% year-over-year to $1,585.2 million gross, with net accrued unrealized carry of $783 million as of June 30, 2025. The company has over $100 billion in performance fee-eligible capital.

Strategic Initiatives

StepStone continues to expand its global footprint, with local teams in 29 cities across 17 countries and 5 continents. The company’s total capital responsibility is distributed across the Americas ($337 billion), Europe, Middle East, and Africa ($286 billion), and Asia-Pacific ($101 billion).

The firm’s investment platform remains diversified across private equity (50% of AUM), infrastructure (20%), private debt (20%), and real estate (10%). This diversification helps StepStone navigate different market cycles and provide comprehensive solutions to clients.

StepStone’s growth is driven by three main business segments: separately managed accounts (SMAs), focused commingled funds, and advisory services. The company raised $18 billion for SMAs and $10 billion for commingled funds during the last twelve months.

The company’s client base remains predominantly institutional, with pension funds accounting for 31% of clients, followed by private wealth (12%) and insurance companies (5%). Geographically, North America represents 43% of clients, with Europe and Asia/Australia each accounting for 19%.

Forward-Looking Statements

StepStone’s presentation highlighted its scale and reach, with $199 billion in assets under management and $524 billion in assets under advisement, for a total capital responsibility of $723 billion. The company employs 1,160 professionals globally.

The company’s evolution of fee-earning AUM shows a consistent organic compound annual growth rate (CAGR) of 21% from fiscal year 2021 to the first quarter of fiscal year 2026, demonstrating StepStone’s ability to grow its fee-generating asset base over time.

StepStone offers a comprehensive suite of private markets solutions through its diversified platform, including private equity, real estate, infrastructure, and private debt. The company’s focused commingled funds span various strategies and vintage years, with fund sizes ranging from hundreds of millions to billions of dollars.

Despite the quarterly GAAP net loss, StepStone maintained its quarterly dividend at $0.28 per share, reflecting management’s confidence in the company’s long-term prospects and commitment to shareholder returns.

The stock closed at $57.45 on August 7, 2025, down 1.56% for the day. StepStone shares have traded between $40.07 and $70.38 over the past 52 weeks, according to market data.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.