StepStone Group (STEP) Q1 2025 earnings summary

Executive summary

• Assets under management (AUM) reached $169.3 billion as of June 30, 2024, up 19% year-over-year and 8% sequentially, with total capital responsibility at $701 billion.

• Fee-earning AUM (FEAUM) grew 15% year-over-year to $100.4 billion, and undeployed fee-earning capital increased 63% to $27.6 billion.

• Adjusted net income (ANI) nearly doubled year-over-year to $57.2 million, or $0.48 per share, up 85%.

• Fee-related earnings (FRE) rose 61% year-over-year to $71.7 million, with FRE margin expanding to 40% from 32%.

• Quarterly cash dividend of $0.24 per share declared, payable September 13, 2024.

Financial highlights

• GAAP net income was $48.0 million; net income attributable to the company was $13.3 million, or $0.20 per share, down 41% year-over-year.

• Adjusted revenues rose 45% year-over-year to $221.2 million; management and advisory fees, net, increased 29% to $178.5 million, including $19.1 million in retroactive fees.

• Realized performance fees were $43 million, the highest in two years, with net realized performance fees up 306% to $21.8 million.

• Weighted-average management fee rate increased to 0.61% from 0.55% year-over-year, aided by retroactive fees and private wealth growth.

• Total expenses increased 15% to $139.3 million, mainly from higher compensation, equity-based awards, and general administrative costs.

Outlook and guidance

• Management expects continued growth in AUM and FEAUM, supported by strong fundraising and new client activity, but notes that market volatility and slowdowns in fundraising or capital deployment could impact future management and performance fees.

• Over $4 billion of undeployed fee-earning capital expected to activate by year-end, supporting future management fee growth.

• The company plans to raise $100–$200 million in additional debt financing by year-end to enhance liquidity and support corporate initiatives.