StepStone Group (STEP) Q3 2025 earnings summary

Executive summary

• Total capital responsibility reached $698 billion as of December 31, 2024, with $179 billion in AUM and $519 billion in AUA, reflecting strong growth in both managed and advised assets.

• Fee-earning AUM reached $114.2 billion, up 28% year-over-year, driven by strong fundraising, deployment of capital, and new client activity.

• Adjusted revenues for the quarter were $243.9 million, up 32% year-over-year; management and advisory fees, net, rose 26%.

• Fee-related earnings (FRE) grew 46% for the quarter to $74.1 million, with FRE margin expanding to 39% from 33% year-over-year.

• Adjusted net income (ANI) per share was $0.44 for the quarter, up 19% year-over-year; quarterly dividend of $0.24 per share declared.

Financial highlights

• GAAP net loss for the quarter was $287 million, primarily due to fair value changes and equity-based compensation; adjusted net income was $52.7 million.

• Gross realized performance fees were $52.1 million for the quarter, up 57% year-over-year; net realized performance fees reached $26.6 million.

• Management and advisory fees, net, were $191.8 million for the quarter, up 26% year-over-year.

• Equity-based compensation expense rose sharply due to private wealth subsidiary awards, impacting overall expenses.

• Cash and cash equivalents stood at $223.1 million as of December 31, 2024, with total assets of $4.35 billion and total liabilities of $2.61 billion.

Outlook and guidance

• Management expects continued growth in fee-earning AUM, with $21.7 billion in undeployed fee-earning capital as of December 31, 2024.

• Pipeline for new separately managed accounts remains strong, with broad-based deployment expected to continue.

• Private wealth platform surpassed $7 billion in AUM by January 2025, supported by secondary transactions and new fund launches.

• Anticipate drawing on remaining undeployed fee-earning capital over a normal three- to five-year cycle.

• Quarterly dividend of $0.24 per share announced for March 2025, reflecting confidence in ongoing cash generation.