StepStone Group quarterly loss narrows to $71.2M
Performance fees were $480.0 million for the quarter, while six-month operating activities used $818.1 million in cash.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
StepStone Group Inc. reported total revenue of $773.1 million for the three months ended September 30, 2026, compared with $454.2 million a year earlier. Management and advisory fees were $293.1 million and performance fees were $480.0 million. Net loss attributable to StepStone was $71.2 million versus $366.1 million; consolidated net income was $65.4 million, while the amount attributable to StepStone was a loss after allocations to non-controlling interests.
For the six months ended September 30, 2026, revenue was $1,152.0 million versus $818.5 million, and net loss attributable to StepStone was $187.0 million versus $404.6 million. Net cash used in operating activities was $818.1 million, compared with $62.5 million provided in 2025. At September 30, cash and cash equivalents were $297.0 million and debt obligations were $286.2 million. Consolidated Funds held $504.3 million in cash, which is unavailable for StepStone’s general liquidity needs. StepStone said slower fundraising and capital deployment have delayed or decreased management fees, while difficulty exiting investments profitably has delayed or decreased performance fees; these effects may continue.
2 points · 0 major1 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue reached $773.1 million, versus $454.2 million a year earlier.
- Moderate pointStepStone-attributable quarterly loss narrowed to $71.2 million from $366.1 million.
Negative
- Major pointSix-month operating activities used $818.1 million, versus $62.5 million provided.
Filing Explained
Through September thirtieth, 2026, six-month figures show 95,783 thousand dollars paid in dividends and 1,294,985 thousand dollars in fund investment contributions.
During the six months ended
The six-month cash-flow statement also places
Key Figures
Total revenue: $773.1 million
Management and advisory fees: $293.1 million
Performance fees: $480.0 million
+5 more
8 metrics
Total revenue
$773.1 million
Three months ended September 30, 2026; $454.2 million in 2025
Management and advisory fees
$293.1 million
Three months ended September 30, 2026
Performance fees
$480.0 million
Three months ended September 30, 2026
Net loss attributable to StepStone
$71.2 million loss
Three months ended September 30, 2026; $366.1 million loss in 2025
Total revenue
$1,152.0 million
Six months ended September 30, 2026
Net cash used in operating activities
$818.1 million used
Six months ended September 30, 2026; $62.5 million provided in 2025
Cash and cash equivalents
$297.0 million
As of September 30, 2026
Debt obligations
$286.2 million
As of September 30, 2026
Key Terms
carried interest allocations, non-controlling interests, variable interest entity, net asset value
4 terms
carried interest allocations financial
"carried interest allocations include the allocation of performance-based fees"
non-controlling interests financial
"Non-controlling interests reflect the portion of income or loss"
An ownership stake in a subsidiary held by outside shareholders rather than the parent company, representing the portion of that subsidiary’s assets and profits the parent does not control. For investors, it shows what part of consolidated earnings and equity belongs to others — like a roommate who owns part of a house — which affects how much value and profit per share are truly attributable to the parent company’s shareholders.
variable interest entity financial
"whether that entity is a VIE"
A variable interest entity (VIE) is a company structure where one party controls another company’s operations and economic outcomes through contracts or special arrangements instead of owning a majority of its voting shares. For investors, VIEs matter because the controlling party’s financial results, debts and risks can appear in the controller’s reports even though ownership looks separate, so understanding VIEs helps assess true exposure, governance limits and transparency—like spotting a puppet controlled by strings rather than direct ownership.
net asset value financial
"net asset value approach"
Net asset value is the total value of an investment fund's assets minus any liabilities, divided by the number of shares or units outstanding. It represents the per-share worth of the fund, similar to how the value of a house is determined by its total worth after debts are subtracted. Investors use it to gauge the true value of their holdings and to compare different investment options.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was STEP's revenue for the quarter ended September 30, 2026?
STEP reported $773.1 million in total revenue for the three months ended September 30, 2026, compared with $454.2 million in 2025. Management and advisory fees were $293.1 million, and performance fees were $480.0 million.
How much of STEP's quarterly revenue came from performance fees?
Total performance fees were $480.0 million for the three months ended September 30, 2026. The reported components were $362.5 million in carried interest allocations, $115.0 million in legacy Greenspring carried interest allocations, and $2.5 million in incentive fees.
How much cash and debt did STEP's Consolidated Funds report?
The Consolidated Funds reported $504.3 million in cash and $1,394.5 million in debt obligations as of September 30, 2026. StepStone states that cash held by the Consolidated Funds is not available to fund its general liquidity needs.
Why did STEP report a net loss attributable to the company despite consolidated net income?
Consolidated net income was $65.4 million for the three months ended September 30, 2026, while the net loss attributable to StepStone was $71.2 million. The statements separately allocate income or loss to non-controlling interests in subsidiaries, legacy Greenspring entities, the Partnership, and funds.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _______________________ to ___________________________
Commission file number 001-39510
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(212 ) 351-6100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of November 3, 2026, there were 82,475,390 shares of the registrant’s Class A common stock, par value $0.001, and 38,326,745 shares of the registrant’s Class B common stock, par value $0.001, outstanding.
Table of Contents
| Page | |||||
| PART I - FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | |||||
Condensed Consolidated Balance Sheets as of September 30, 2026 and March 31, 2026 | 6 | ||||
Condensed Consolidated Statements of Loss for the Three and Six Months Ended September 30, 2026 and 2025 | 8 | ||||
Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended September 30, 2026 and 2025 | 9 | ||||
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended September 30, 2026 and 2025 | 10 | ||||
Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2026 and 2025 | 12 | ||||
Notes to Condensed Consolidated Financial Statements | 14 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 55 | ||||
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 98 | ||||
Item 4. Controls and Procedures | 100 | ||||
| PART II - OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 101 | ||||
Item 1A. Risk Factors | 101 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 101 | ||||
Item 3. Defaults Upon Senior Securities | 102 | ||||
Item 4. Mine Safety Disclosures | 102 | ||||
Item 5. Other Information | 102 | ||||
Item 6. Exhibits | 103 | ||||
Signatures | 104 | ||||
3
This quarterly report on Form 10-Q (“Form 10-Q”) includes certain information regarding the historical investment performance of our focused commingled funds and separately managed accounts. An investment in shares of our Class A common stock is not an investment in any StepStone Fund (as defined below). The StepStone Funds are separate, distinct legal entities that are not our subsidiaries. In the event of our bankruptcy or liquidation, you will have no claim against the StepStone Funds. In considering the performance information relating to the StepStone Funds contained herein, current and prospective Class A common stockholders should bear in mind that the performance of the StepStone Funds is not indicative of the possible performance of shares of our Class A common stock and also is not necessarily indicative of the future results of the StepStone Funds, even if fund investments were in fact liquidated on the dates indicated, and we cannot assure you that the StepStone Funds will continue to achieve, or that future StepStone Funds will achieve, comparable results.
Unless otherwise indicated or the context otherwise requires:
• “StepStone Group Inc.” or “SSG” refers solely to StepStone Group Inc., a Delaware corporation, and not to any of its subsidiaries;
• the “Partnership” refers solely to StepStone Group LP, a Delaware limited partnership, and not to any of its subsidiaries;
• “General Partner” refers to StepStone Group Holdings LLC, a Delaware limited liability company, and the sole general partner of the Partnership;
• “we,” “us,” “our,” the “Company,” “our company,” “StepStone” and similar terms refer to SSG and its consolidated subsidiaries, including the Partnership;
• “StepStone Funds” or “our funds” refer to our focused commingled funds and our separately managed accounts for which we act as both investment adviser and general partner or managing member;
• references to the “Greenspring acquisition” refer to the acquisition of Greenspring Associates, Inc. and certain of its affiliates (“Greenspring”) that was completed on September 20, 2021;
• references to “FY,” “fiscal” or “fiscal year” are to the fiscal year ended March 31 of the applicable year;
• references to the “Reorganization” refer to the series of transactions immediately before the Company’s initial public offering (“IPO”), which was completed on September 18, 2020;
• references to “private markets allocations” or “total capital responsibility” refer to the aggregate amount of our assets under management (“AUM”) and our assets under advisement (“AUA”);
• references to “high-net-worth” individuals refer to individuals with net worth of over $5 million, excluding primary residence;
• references to “mass affluent” individuals refer to individuals with annual income over $200,000 or net worth between $1 million and $5 million, excluding primary residence;
• references to “Consolidated Funds” refer to the StepStone Funds that we are required to consolidate as of the applicable reporting period; and
• references to “SRA” refer to StepStone Group Real Assets LP, references to “SRE” refer to StepStone Group Real Estate LP, references to “SPD” refer to StepStone Group Private Debt AG, and references to “SPW” refer to StepStone Group Private Wealth LLC.
4
TRADEMARKS, SERVICE MARKS AND TRADE NAMES
We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are owned by us or licensed by us. We also own or have the rights to copyrights that protect the content of our solutions. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Form 10-Q are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, trade names and copyrights.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations, estimates, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions and statements that are not historical facts, including our expectations regarding market and business conditions, industry prospects, future results of operations or financial position, our liquidity and capital resource requirements, the incurrence of future indebtedness, future issuances of our stock, future dividends and repurchases of our stock, and the exercise of our call right, or of the put right held by CH Equity Partners, LLC, under the option agreement relating to the profits interest in SPW. We use words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions to 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 should not be regarded as a representation by us or any other person 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 in this Form 10-Q and under “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended March 31, 2026 and in our subsequent reports filed from time to time with the U.S. Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Form 10-Q and in our other periodic filings. We undertake no obligation to revise or update any forward-looking statements after the date of this Form 10-Q, whether as a result of new information, future events or otherwise, except as may be required by law.
5
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
StepStone Group Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share amounts)
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Fees and accounts receivable | |||||||||||
| Due from affiliates | |||||||||||
Investments: | |||||||||||
| Investments in funds | |||||||||||
| Accrued carried interest allocations | |||||||||||
Legacy Greenspring investments in funds and accrued carried interest allocations(1) | |||||||||||
| Deferred income tax assets | |||||||||||
| Lease right-of-use assets, net | |||||||||||
| Other assets and receivables | |||||||||||
| Intangibles, net | |||||||||||
| Goodwill | |||||||||||
Assets of Consolidated Funds: | |||||||||||
| Cash and cash equivalents | |||||||||||
| Investments, at fair value | |||||||||||
| Other assets | |||||||||||
Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Accounts payable, accrued expenses and other liabilities | $ | $ | |||||||||
| Accrued compensation and benefits | |||||||||||
| Accrued carried interest-related compensation | |||||||||||
Legacy Greenspring accrued carried interest-related compensation(1) | |||||||||||
| Due to affiliates | |||||||||||
| Lease liabilities | |||||||||||
| Debt obligations | |||||||||||
Liabilities of Consolidated Funds: | |||||||||||
| Other liabilities | |||||||||||
| Debt obligations | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 14) | |||||||||||
| Redeemable non-controlling interests in Consolidated Funds | |||||||||||
| Redeemable non-controlling interests in subsidiaries | |||||||||||
| Stockholders’ equity: | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Total StepStone Group Inc. stockholders’ equity | ( | ( | |||||||||
| Non-controlling interests in subsidiaries | |||||||||||
Non-controlling interests in legacy Greenspring entities(1) | |||||||||||
| Non-controlling interests in the Partnership | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
(1)Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. See notes 2 and 5 for more information.
See accompanying notes to condensed consolidated financial statements.
6
StepStone Group Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
The following presents the portion of the condensed consolidated balances presented above attributable to consolidated variable interest entities.
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Fees and accounts receivable | |||||||||||
| Due from affiliates | |||||||||||
Investments in funds | |||||||||||
| Legacy Greenspring investments in funds and accrued carried interest allocations | |||||||||||
| Deferred income tax assets | |||||||||||
| Lease right-of-use assets, net | |||||||||||
| Other assets and receivables | |||||||||||
| Assets of Consolidated Funds: | |||||||||||
| Cash and cash equivalents | |||||||||||
| Investments, at fair value | |||||||||||
| Other assets | |||||||||||
Total assets | $ | $ | |||||||||
| Liabilities | |||||||||||
| Accounts payable, accrued expenses and other liabilities | $ | $ | |||||||||
| Accrued compensation and benefits | |||||||||||
| Legacy Greenspring accrued carried interest-related compensation | |||||||||||
| Due to affiliates | |||||||||||
| Lease liabilities | |||||||||||
| Liabilities of Consolidated Funds: | |||||||||||
| Other liabilities | |||||||||||
| Debt obligations | |||||||||||
Total liabilities | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements.
7
StepStone Group Inc.
Condensed Consolidated Statements of Loss (Unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Management and advisory fees, net | $ | $ | $ | $ | |||||||||||||||||||
| Performance fees: | |||||||||||||||||||||||
| Incentive fees | |||||||||||||||||||||||
| Carried interest allocations: | |||||||||||||||||||||||
| Realized | |||||||||||||||||||||||
| Unrealized | |||||||||||||||||||||||
| Total carried interest allocations | |||||||||||||||||||||||
Legacy Greenspring carried interest allocations(1) | |||||||||||||||||||||||
| Total performance fees | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Compensation and benefits: | |||||||||||||||||||||||
| Cash-based compensation | |||||||||||||||||||||||
| Equity-based compensation | |||||||||||||||||||||||
| Performance fee-related compensation: | |||||||||||||||||||||||
| Realized | |||||||||||||||||||||||
| Unrealized | |||||||||||||||||||||||
| Total performance fee-related compensation | |||||||||||||||||||||||
Legacy Greenspring performance fee-related compensation(1) | |||||||||||||||||||||||
| Total compensation and benefits | |||||||||||||||||||||||
| General, administrative and other | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income (loss) | ( | ||||||||||||||||||||||
Legacy Greenspring investment income (loss)(1) | ( | ||||||||||||||||||||||
| Investment income of Consolidated Funds | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income (loss) | ( | ( | |||||||||||||||||||||
| Total other income | |||||||||||||||||||||||
| Income (loss) before income tax | ( | ( | ( | ||||||||||||||||||||
| Income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) | ( | ( | ( | ||||||||||||||||||||
| Less: Net income attributable to non-controlling interests in subsidiaries | |||||||||||||||||||||||
Less: Net income (loss) attributable to non-controlling interests in legacy Greenspring entities(1) | ( | ||||||||||||||||||||||
| Less: Net loss attributable to non-controlling interests in the Partnership | ( | ( | ( | ( | |||||||||||||||||||
| Less: Net income attributable to redeemable non-controlling interests in Consolidated Funds | |||||||||||||||||||||||
| Less: Net income attributable to redeemable non-controlling interests in subsidiaries | |||||||||||||||||||||||
| Net loss attributable to StepStone Group Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share of Class A common stock: | |||||||||||||||||||||||
| Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average shares of Class A common stock: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
(1)Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. See notes 2, 3 and 5 for more information.
See accompanying notes to condensed consolidated financial statements.
8
StepStone Group Inc.
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(in thousands)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||
| Total other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Comprehensive income (loss) before non-controlling interests | ( | ( | ( | ||||||||||||||||||||
| Less: Comprehensive income attributable to non-controlling interests in subsidiaries | |||||||||||||||||||||||
| Less: Comprehensive income (loss) attributable to non-controlling interests in legacy Greenspring entities | ( | ||||||||||||||||||||||
| Less: Comprehensive loss attributable to non-controlling interests in the Partnership | ( | ( | ( | ( | |||||||||||||||||||
| Less: Comprehensive income attributable to redeemable non-controlling interests in Consolidated Funds | |||||||||||||||||||||||
| Less: Comprehensive income attributable to redeemable non-controlling interests in subsidiaries | |||||||||||||||||||||||
| Comprehensive loss attributable to StepStone Group Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
See accompanying notes to condensed consolidated financial statements.
9
StepStone Group Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands)
| Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non-Controlling Interests in Subsidiaries | Non-Controlling Interests in Legacy Greenspring Entities | Non-Controlling Interests in the Partnership | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Contributed capital | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | — | — | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Initial consolidation of Consolidated Funds | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax effect resulting from equity transactions affecting ownership in the Partnership(1) | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Contributed capital | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of Class B, Class C and Class D units for Class A common stock and redemption of corresponding Class B common stock | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Purchase of non-controlling interests | — | — | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued for purchase of asset class non-controlling interests | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | ( | — | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Initial consolidation of Consolidated Funds | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax effect resulting from equity transactions affecting ownership in the Partnership(1) | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
(1)See notes 10 and 13 for more information.
See accompanying notes to condensed consolidated financial statements.
10
StepStone Group Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands)
| Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non-Controlling Interests in Subsidiaries | Non-Controlling Interests in Legacy Greenspring Entities | Non-Controlling Interests in the Partnership | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Contributed capital | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of Class B, Class C and Class D units for Class A common stock and redemption of corresponding Class B common stock | — | ( | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax effect resulting from equity transactions affecting ownership in the Partnership(1) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Contributed capital | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued under ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of Class B, Class C and Class D units for Class A common stock and redemption of corresponding Class B common stock | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Purchase of non-controlling interests | — | — | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Class A common stock issued for purchase of asset class non-controlling interests | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax effect resulting from equity transactions affecting ownership in the Partnership(1) | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
(1)See notes 10 and 13 for more information.
See accompanying notes to condensed consolidated financial statements.
11
StepStone Group Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Six Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Unrealized carried interest allocations and investment income | ( | ( | |||||||||
| Unrealized legacy Greenspring carried interest allocations and investment income | ( | ( | |||||||||
| Unrealized performance fee-related compensation | |||||||||||
| Unrealized legacy Greenspring performance fee-related compensation | |||||||||||
| Amortization of deferred financing costs | |||||||||||
| Equity-based compensation | |||||||||||
| Change in deferred income taxes | ( | ( | |||||||||
| Adjustments to reconcile net loss to net cash used in operating activities of Consolidated Funds: | |||||||||||
| Realized and unrealized gains on investments of Consolidated Funds | ( | ( | |||||||||
| Unrealized gains from notes payable of Consolidated Funds | ( | ||||||||||
| Contributions to investments of Consolidated Funds | ( | ( | |||||||||
| Distributions received from investments of Consolidated Funds | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Fees and accounts receivable | ( | ||||||||||
| Due from affiliates | ( | ( | |||||||||
| Other assets and receivables | ( | ||||||||||
| Accounts payable, accrued expenses and other liabilities | ( | ||||||||||
| Accrued compensation and benefits | |||||||||||
| Due to affiliates | |||||||||||
| Lease right-of-use assets, net and lease liabilities | |||||||||||
| Changes in operating assets and liabilities of Consolidated Funds: | |||||||||||
| Other assets and receivables | |||||||||||
| Other liabilities and payables | ( | ||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities | |||||||||||
| Contributions to investments | ( | ( | |||||||||
| Distributions received from investments | |||||||||||
| Contributions to investments in legacy Greenspring entities | ( | ( | |||||||||
| Distributions received from investments in legacy Greenspring entities | |||||||||||
| Net cash recognized upon initial consolidation of funds | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
See accompanying notes to condensed consolidated financial statements.
12
StepStone Group Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Six Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from financing activities | |||||||||||
| Proceeds from capital contributions from non-controlling interests | $ | $ | |||||||||
| Purchase of non-controlling interests | ( | ( | |||||||||
| Proceeds from revolving credit facility | |||||||||||
| Proceeds from issuance of Class A common stock under ESPP | |||||||||||
| Distributions to non-controlling interests | ( | ( | |||||||||
| Proceeds from capital contributions to legacy Greenspring entities | |||||||||||
| Distributions to non-controlling interests in legacy Greenspring entities | ( | ( | |||||||||
| Dividends paid to common stockholders | ( | ( | |||||||||
| Payments for repurchases of Class A common stock | ( | ||||||||||
| Payments to related parties under Tax Receivable Agreements | ( | ( | |||||||||
| Other financing activities | ( | ( | |||||||||
| Cash flows from financing activities of Consolidated Funds: | |||||||||||
| Issuance of notes payable | |||||||||||
| Proceeds from borrowings on fund credit facilities | |||||||||||
| Payments on fund credit facilities | ( | ||||||||||
| Payment of debt issuance costs on fund credit facilities | ( | ||||||||||
| Proceeds from capital contributions from non-controlling interests in Consolidated Funds | |||||||||||
| Distributions to non-controlling interests in Consolidated Funds | ( | ||||||||||
| Contributions from redeemable non-controlling interests in Consolidated Funds | |||||||||||
| Redemptions of redeemable non-controlling interests in Consolidated Funds | ( | ( | |||||||||
| Net cash provided by financing activities | |||||||||||
| Effect of foreign currency exchange rate changes | ( | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosures: | |||||||||||
| Non-cash operating, investing, and financing activities: | |||||||||||
| Accrued dividends | $ | $ | |||||||||
| Deferred tax effect resulting from transactions affecting ownership in the Partnership, including net amounts payable under Tax Receivable Agreements | ( | ( | |||||||||
| Initial consolidation of Consolidated Funds | |||||||||||
| Establishment of lease liabilities in exchange for lease right-of-use assets | |||||||||||
| Remeasurement of lease liabilities | |||||||||||
| Non-cash purchases of property and equipment | |||||||||||
| Deferred purchase price for investments of Consolidated Funds | |||||||||||
| Equity issued for purchase of non-controlling interests | |||||||||||
| Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Cash and cash equivalents of Consolidated Funds | |||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements.
13
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
1. Organization
StepStone Group Inc. (“SSG”) was incorporated in the state of Delaware on November 20, 2019 and, following its initial public offering in 2020, acts as a holding company for StepStone Group LP (the “Partnership”). SSG is the sole managing member of StepStone Group Holdings LLC (the “General Partner”), the general partner of the Partnership. Unless otherwise specified, “StepStone” or the “Company” refers to SSG and its consolidated subsidiaries, including the Partnership, throughout the remainder of these notes to the condensed consolidated financial statements.
The Company is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. The Company’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, including high-net-worth and mass affluent individuals. The Company 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. These portfolios utilize several types of synergistic investment strategies with third-party fund managers, including commitments to funds (“primaries”), acquiring stakes in existing funds on the secondary market (“secondaries”) and investing directly into companies (“co-investments”).
The Company, through its subsidiaries, acts as the investment advisor and general partner or managing member to separately managed accounts (“SMAs”) and focused commingled funds (collectively, the “StepStone Funds”).
SSG is a holding company whose principal asset is a controlling financial interest in the Partnership through its ownership of all of the Partnership’s Class A units and 100 % of the membership interests in the General Partner of the Partnership. SSG acts as the sole managing member of the General Partner of the Partnership and, as a result, indirectly operates and controls all of the Partnership’s business and affairs. As a result, SSG consolidates the financial results of the Partnership and reports non-controlling interests related to the Class B, Class C and Class D units of the Partnership which are not owned by SSG. The assets and liabilities of the Partnership represent substantially all of SSG’s consolidated assets and liabilities, with the exception of certain deferred income taxes and payables due to affiliates pursuant to tax receivable agreements (see notes 10 and 12). Each share of Class A common stock and Class B common stock is entitled to one 65.9 % of the economic interest in the Partnership. As the Partnership’s limited partners exchange their Class B, Class C and Class D units into SSG’s Class A common stock in the future, SSG’s economic interest in the Partnership will increase relative to that of the Class B, Class C and Class D unitholders.
14
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Management believes it has made all necessary adjustments (consisting of only normal recurring items) such that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its annual report on Form 10-K for the fiscal year ended March 31, 2026 filed with the Securities and Exchange Commission (“SEC”).
Certain of the StepStone Funds are investment companies that follow specialized accounting under GAAP and reflect their investments at estimated fair value. Accordingly, the carrying value of the Company’s equity method investments in such entities retains the specialized accounting.
Consolidation
The Company consolidates all entities that it controls through a majority voting interest or as the primary beneficiary of a variable interest entity (“VIE”). Under the VIE model, management first assesses whether the Company has a variable interest in an entity. In evaluating whether the Company holds a variable interest, fees received as a decision maker or in exchange for services (including management fees, incentive fees and carried interest allocations) that are customary and commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, are not considered variable interests. If the Company has a variable interest in an entity, management further assesses whether that entity is a VIE, and if so, whether the Company is the primary beneficiary under the VIE model. Entities that do not qualify as VIEs are assessed for consolidation under the voting interest model. Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest. The consolidation analysis can generally be performed qualitatively; however, in certain situations a quantitative analysis may also be performed. Investments and redemptions (either by the Company, affiliates of the Company or third parties) or amendments to the governing documents of the respective StepStone Funds could affect the entity’s status as a VIE or the determination of the primary beneficiary.
Under the VIE model, an entity is deemed to be the primary beneficiary of a VIE if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly affect the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. When assessing whether the Company is the primary beneficiary of a VIE, management evaluates whether the Company’s involvement, through holding interests directly or indirectly in an entity or contractually through other variable interests, would give the Company a controlling financial interest. This analysis includes an evaluation of the Company’s control rights, as well as the economic interests that the Company holds in the VIE, including indirectly through related parties.
15
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Company provides investment advisory services to the StepStone Funds, which have third-party clients. These funds are investment companies and are typically organized as limited partnerships or limited liability companies for which the Company, through its operating subsidiaries, acts as the general partner or managing member. A limited partnership or similar entity is a VIE if the unaffiliated limited partners or members do not have substantive rights to terminate or liquidate the fund or remove the general partner or substantive rights to participate. StepStone Funds are generally VIEs because they have not granted unaffiliated limited partners or members substantive rights to terminate the fund or remove the general partner or substantive rights to participate. The Company typically does not consolidate these StepStone Funds because it is not the primary beneficiary, as it does not hold an interest in those funds that is considered more than insignificant and its fee arrangements are considered customary and commensurate.
The Company has determined that certain of its operating subsidiaries, including StepStone Group Real Assets LP (“SRA”), StepStone Group Real Estate LP (“SRE”), StepStone Group Private Debt AG (“SPD”), and StepStone Group Private Wealth LLC (“SPW”) and certain StepStone Funds are VIEs, and that the Company is the primary beneficiary of each entity because it has a controlling financial interest in each entity; accordingly, the Company consolidates these entities. The assets and liabilities of the consolidated VIEs are presented gross in the condensed consolidated balance sheets. The assets of the consolidated VIEs may only be used to settle obligations of the consolidated VIEs. See note 4 for more information on both consolidated and unconsolidated VIEs.
In connection with the acquisition of Greenspring Associates Inc. and certain of its affiliates (“Greenspring”) that was completed on September 20, 2021 (the “Greenspring acquisition”), the Company, indirectly through its subsidiaries, became the sole and/or managing member of certain entities, each of which is the general partner of an investment fund (“legacy Greenspring general partner entities”). The Company did not acquire any direct economic interests attributable to the legacy Greenspring general partner entities, including legacy Greenspring investments in funds and carried interest allocations. However, certain arrangements negotiated as part of the acquisition represent variable interests that could be significant. The Company determined that the legacy Greenspring general partner entities are VIEs and it is the primary beneficiary of each such entity because it has a controlling financial interest in each entity. As a result, the Company consolidates these entities.
The Company and its subsidiaries manage or control certain entities that constitute client investment funds, including collateralized financing entities (“CFE”), that have been consolidated in the accompanying condensed consolidated financial statements (“Consolidated Funds”). Including the results of the Consolidated Funds increases the reported amounts of the assets, liabilities, expenses and cash flows in the accompanying condensed consolidated financial statements. Amounts related to economic interests held by third-party investors are reflected as either non-controlling interests in subsidiaries or redeemable non-controlling interests in Consolidated Funds when the equity interests of the fund are redeemable. The revenues earned by the Company as investment manager of the Consolidated Funds are eliminated in consolidation and generally have no direct effect on the net income (loss) attributable to SSG or to stockholders’ equity.
Non-Controlling Interests
Non-controlling interests (“NCI”) reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by the Company. Non-controlling interests are presented as separate components of stockholders’ equity on the Company’s condensed consolidated balance sheets to clearly distinguish between the Company’s interests and the economic interests of third parties and employees in those entities. Net income (loss) attributable to SSG, as reported in the condensed consolidated statements of income (loss), is presented net of the portion of net income (loss) attributable to holders of non-controlling interests. See note 13 for more information on ownership interests in the Company.
16
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees, and the economic interests in certain Consolidated Funds that are not held by SSG but are held by the client investors in the funds. Non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Non-controlling interests in legacy Greenspring entities represent the economic interests in the legacy Greenspring general partner entities. The Company did not acquire any direct economic interests in the legacy Greenspring general partner entities. As a result, all of the net income (loss) attributable to the legacy Greenspring general partner entities is allocated to non-controlling interests in legacy Greenspring entities.
Non-controlling interests in the Partnership represent the economic interests related to the Class B, Class C and Class D units of the Partnership which are not owned by SSG. Non-controlling interests in the Partnership are allocated a share of income or loss in the Partnership in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Redeemable non-controlling interests in Consolidated Funds represent the economic interests in the redeemable Consolidated Funds which are not held by SSG, but are held by the client investors in the funds. These interests are presented as redeemable non-controlling interests in Consolidated Funds within the condensed consolidated balance sheets, outside of permanent capital as the investors in these funds generally have the right to withdraw their capital, subject to the terms of the respective contractual agreements. Redeemable non-controlling interests in Consolidated Funds are allocated a share of income or loss in the respective fund in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Accounting for Differing Fiscal Periods
The StepStone Funds (including the Consolidated Funds) primarily have a fiscal year end as of December 31. The Company accounts for its investments in the StepStone Funds and the consolidated balances of the Consolidated Funds on a three-month lag due to the timing of receipt of financial information from the investments held by the StepStone Funds. The StepStone Funds primarily invest in private markets funds that generally require at least 90 days following the calendar year end to provide audited financial statements. As a result, the Company uses the December 31 audited financial statements of the StepStone Funds, which reflect the underlying private markets funds as of December 31, to record its investments (including any carried interest allocated by those investments) for its fiscal year-end consolidated financial statements as of March 31. The Company further adjusts the reported carrying values of its investments in the StepStone Funds, and the consolidated balances for the Consolidated Funds, for its share of capital contributions to and distributions from the StepStone Funds during the three-month lag period. For this interim period ended September 30, 2026, the Company used the June 30, 2026 unaudited financial statements of the StepStone Funds, which reflect the underlying private market funds as of June 30, 2026, to record its investments (including any carried interest allocated from those investments), as adjusted for capital contributions and distributions during the three-month lag period ended September 30, 2026.
The Company does not account for management and advisory fees or incentive fees on a three-month lag.
17
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
To the extent that management becomes aware of any material events that affect the StepStone Funds or the Consolidated Funds during the three-month lag period, the effect of the events would be disclosed in the notes to the condensed consolidated financial statements.
Current Events
In 2026, financial markets have continued to experience significant volatility and uncertainty driven by, among other factors, U.S. trade policy developments, elevated inflation, elevated interest rates and interest rate uncertainty, fluctuations in foreign currency exchange rates, and geopolitical developments, including the ongoing Russia-Ukraine conflict and developments in the Middle East. Although inflation remains above the Federal Reserve's long-term target, global growth has moderated, and interest rates remain elevated, U.S. unemployment has remained relatively low and the U.S. economy has continued to expand in 2026.
The Company is continuing to closely monitor developments related to inflation, elevated interest rates, trade, regulatory and other governmental policy, fluctuations in foreign currency exchange rates, banking system and credit market volatility, geopolitical tension, unrest or conflicts, including in or with China, Russia, Ukraine, Europe and the Middle East, and assess the impact on financial markets and the Company’s business. The Company’s results and the overall industry results have been, and may continue to be, adversely affected by slower, uneven or more challenging fundraising activity and capital deployment, which have resulted in, and may continue to result in, delayed or decreased management fees. Further, fund managers have been unable or less able to exit existing investments profitably. Such conditions have resulted in, and may continue to result in, delayed or decreased performance fee revenues. It is currently not possible to predict the ultimate effects of these events on the financial markets, the overall economy and the Company’s condensed consolidated financial statements.
Fair Value Measurements
GAAP establishes a hierarchical disclosure framework, which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace – including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and therefore a lesser degree of judgment is used in measuring their fair value.
Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of their fair values, as follows:
•Level I – Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
•Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies. The types of financial instruments classified in this category include less liquid securities traded in active markets and securities traded in other than active markets.
•Level III – Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.
18
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the financial instrument.
The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for financial instruments categorized in Level III. The variability and availability of the observable inputs affected by the factors described above may result in transfers between Levels I, II, and III.
Investments measured at fair value using net asset value (“NAV”) per share (or its equivalent) as a practical expedient are not categorized within the fair value hierarchy. The Consolidated Funds value their investments in funds, which are generally organized as partnership and limited liability company interests, using the NAV per share equivalent calculated by the investment manager. See note 6 for the fair value of investments measured at NAV.
The following describes the valuation methodologies used for financial instruments of the Consolidated Funds that are measured at fair value on a recurring basis and categorized within Level III of the fair value hierarchy.
Equity Securities
The fair values of unlisted equity securities are generally determined by reference to the income approach (including the discounted cash flow method) and the market approach (including the comparable publicly traded company method and recent transactions in the security, such as secondary market transactions and financing rounds), or a weighting of these approaches. Valuations under these approaches are derived from investment-specific inputs, such as projected cash flows, revenue and EBITDA, combined with market-based inputs, such as discount rates and revenue and EBITDA multiples.
Debt Securities
Debt securities held by the Consolidated Funds consist primarily of private loans. Where available, fair values are determined using prices obtained from independent pricing services or broker quotes. Otherwise, performing loans are generally valued using the discounted cash flow method, under which expected contractual cash flows are discounted at a market yield. The yield is calibrated to the loan’s implied yield at origination and is adjusted at each subsequent valuation for changes in the borrower’s credit profile and in market spreads for comparable debt instruments. Where full repayment is uncertain, fair value is determined by estimating the borrower’s enterprise value, generally using revenue or EBITDA multiples of comparable companies, and allocating that value across the borrower’s capital structure.
19
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Debt Obligations of Consolidated Funds
Debt obligations of the Consolidated Funds consist of senior secured notes and subordinated notes issued by a consolidated CFE, which are collateralized primarily by investments in StepStone Funds. The Company has elected the measurement alternative for collateralized financing entities, to better align the measurement of the CFE’s financial liabilities with the financial assets that serve as their collateral, thereby reflecting the overall economics of the CFE within earnings. Under this election, the financial assets and financial liabilities of the CFE are measured using the more observable of the fair value of the financial assets or the fair value of the financial liabilities. The Company has determined that the fair value of the CFE’s financial assets is more observable than the fair value of its financial liabilities. Accordingly, the financial assets of the CFE are measured at fair value. The financial liabilities are measured as (i) the sum of the fair value of the financial assets and the carrying value of any non-financial assets held temporarily less (ii) the sum of the fair value of any beneficial interests retained by the Company (other than those that represent compensation for services) and the carrying value of any beneficial interests that represent compensation for services. The beneficial interests retained by the Company (other than those that represent compensation for services) are measured at fair value using a discounted cash flow analysis, which considers projected cash flows, market yields on comparable credit instruments, and the credit and structural characteristics of the CFE.
Restricted Cash
Restricted cash consists of cash that the Company is contractually obligated to maintain to secure its letters of credit used primarily related to its office facilities and other obligations.
Cash and Cash Equivalents of Consolidated Funds
Cash and cash equivalents held at the Consolidated Funds consist of cash and cash equivalents held by the Consolidated Funds, which, although not legally restricted, is not available to fund the general liquidity needs of the Company.
20
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Investments
Investments primarily include the Company’s ownership interests in the StepStone Funds, as general partner or managing member of such funds. The Company accounts for all investments in which it has or is otherwise presumed to have significant influence, but not control, including the StepStone Funds, using the equity method of accounting. The carrying value of these equity method investments is determined based on amounts invested by the Company, adjusted for the Company’s share in the earnings or losses of each investee, after consideration of contractual arrangements that govern allocations of income or loss (including carried interest allocations), less distributions received. Investments include the Company’s cumulative accrued carried interest allocations from the StepStone Funds, which primarily represent performance-based capital allocations, assuming the StepStone Funds were liquidated as of each reporting date in accordance with the funds’ governing documents. Legacy Greenspring investments in funds and accrued carried interest allocations represent the economic interests held by the legacy Greenspring general partner entities in certain funds for which the Company does not have any direct economic interests. All of the economics in respect of such interests are payable to employees and are therefore reflected as non-controlling interests in legacy Greenspring entities and legacy Greenspring performance fee-related compensation. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
Management’s determination of fair value for investments in the underlying funds includes various valuation techniques. These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted average cost of capital, exit multiples, or terminal growth rates.
Investments of Consolidated Funds
The Company’s Consolidated Funds are investment companies under GAAP and reflect their investments at estimated fair value. The Company has retained the specialized investment company accounting for the Consolidated Funds under GAAP. Investments of the Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in fair value is recognized in the condensed consolidated statements of income (loss). In addition, the Consolidated Funds do not consolidate their majority-owned and controlled investments in underlying portfolio companies.
Leases
The Company determines whether an arrangement contains a lease at inception of the arrangement. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines the classification as either an operating or finance lease. The Company’s identified leases primarily consist of operating lease agreements for office space and certain equipment, as the lessee. Operating leases are included in lease right-of-use-assets, net and lease liabilities in the condensed consolidated balance sheets. Certain leases include lease and non-lease components, which the Company accounts for as a single lease component. Lease right-of-use (“ROU”) assets and lease liabilities are measured based on the present value of future minimum lease payments over the lease term at the commencement date. Lease ROU assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. The Company uses its incremental borrowing rate in determining the present value of future minimum lease payments. The Company’s lease terms may include options to extend or terminate the lease, which are included in the measurement of ROU assets and lease liabilities when it is reasonably certain that the Company will exercise those options.
21
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Intangibles and Goodwill
The Company’s finite-lived intangible assets consist of acquired contractual rights to earn future management and advisory fee income and client relationships. Finite-lived intangible assets are amortized over their estimated useful lives, which is 10 years. The Company did not have any intangible assets that were deemed to have an indefinite life as of September 30, 2026.
Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. There were no
Goodwill represents the excess amount of consideration transferred in a business combination above the fair value of the identifiable net assets. Goodwill is assessed for impairment at least annually using a qualitative and, if necessary, a quantitative approach. The Company performs its annual goodwill impairment test as of January 1, or more frequently, if events and circumstances indicate that an impairment may exist. Goodwill is tested for impairment at the reporting unit level. The initial assessment for impairment under the qualitative approach is to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, a quantitative assessment is performed to measure the amount of impairment loss, if any. The quantitative assessment includes comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized equal to the lesser of (a) the difference between the carrying amount of the reporting unit and its fair value and (b) the total carrying amount of the reporting unit’s goodwill.
Revenues
The Company recognizes revenue in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers. Revenue is recognized in a manner that depicts the transfer of promised goods or services to customers and for an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The application of ASC 606 requires an entity to identify its contract(s) with a customer, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, variable consideration is included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The Company has elected to apply the variable consideration allocation exception for its fee arrangements with its customers.
Management and Advisory Fees, Net
The Company earns management fees for services provided to its SMAs and focused commingled funds. The Company earns advisory fees for services provided to advisory clients where the Company does not have discretion over investment decisions. The Company considers its performance obligations in its customer contracts from which it earns management and advisory fees to be one or more of the following, based on the services promised: asset management services, advisory services and/or the arrangement of administrative services. Management fees include income-based incentive fees, which are based on net investment income of certain funds.
22
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Company recognizes revenues from asset management services and advisory services when control of the promised services is transferred to customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. SMAs are generally contractual arrangements involving an investment management agreement between the Company and a single client, and are typically structured as a partnership or limited liability company for which a subsidiary of SSG serves as the general partner or managing member. Focused commingled funds are structured as limited partnerships or limited liability companies with multiple clients, for which a subsidiary of the Company serves as the general partner or managing member. The Company determined that the individual client or single limited partner or member is the customer with respect to SMAs and advisory clients. Based on certain facts and circumstances specific to each individual fund structure, the Company has determined that for accounting purposes, either the StepStone Fund or the individual investors in the fund may be considered to be the customer for arrangements with focused commingled funds.
When asset management services and the arrangement of administrative services are the performance obligations promised in a contract, the Company satisfies these performance obligations over time because the customer simultaneously receives and consumes the benefits of the services as they are performed. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the customer. Management fees earned from these contracts where the Company has discretion over investment decisions are generally calculated based on a percentage of unaffiliated committed capital or net invested capital, and these amounts are typically billed quarterly. For certain investment funds, management fees are initially based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term. In addition, the management fee rate charged may also be reduced for certain investment funds depending on the contractual arrangement. The management fee basis is subject to factors outside of the Company’s control. Therefore, estimates of future period management fees are not included in the transaction price because those estimates would be considered constrained. Advisory fees from contracts where the Company does not have discretion over investment decisions are generally based on fixed amounts and typically billed quarterly.
Management fees generally exclude reimbursements for expenses paid by the Company on behalf of its customers, including amounts related to certain professional fees and other fund administrative expenses pursuant to the fund’s governing documents. For professional and administrative services that the Company arranges to be performed by third parties on behalf of investment funds, management has concluded that the nature of its promise is to arrange for the services to be provided and, accordingly, the Company does not control the services provided by the third parties before they are transferred to the customer. Therefore, the Company is acting as an agent, and the reimbursements for these professional fees paid on behalf of the investment funds are generally presented on a net basis.
The Company and certain investment funds that it manages have distribution and service agreements with third-party financial institutions, whereby the Company pays a portion of the fees it receives to such institutions for ongoing distribution and servicing of customer accounts. Management has concluded that the Company does not act as principal for the third-party services, as the Company does not control the services provided by the third parties before they are transferred to the customer. Therefore, the Company is acting as an agent, and the management fees are recorded net of these service fees.
The Company may incur certain costs in connection with satisfying its performance obligations for investment management services – primarily employee travel costs – for which it receives reimbursements from its customers. For reimbursable employee travel costs, the Company concluded it controls the services provided by its employees and, therefore, is acting as principal. Accordingly, the Company records the reimbursement for these costs incurred on a gross basis – that is, as revenue in management and advisory fees, net and expense in general, administrative and other expenses in the condensed consolidated statements of income (loss). For reimbursable costs incurred in connection with satisfying its performance obligations for administration services, the Company concluded it does not control the services provided by other third parties and, therefore, is acting as agent. Accordingly, the Company records the reimbursement for these costs incurred on a net basis.
23
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Performance Fees
The Company earns two types of performance fee revenues: incentive fees and carried interest allocations, as described below.
Incentive fees are generally calculated as a percentage of the profits (up to 15 %) earned in respect of certain accounts, including certain permanent capital vehicles, for which the Company is the investment adviser, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are a form of variable consideration and represent contractual fee arrangements in the Company’s contracts with its customers. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax.
The Company recognizes incentive fee revenue only when these amounts are realized and no longer subject to significant risk of reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization). However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax-related portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt. Incentive fees received in advance of crystallization that remain subject to clawback are recorded as deferred incentive fee revenue and included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets.
Carried interest allocations include the allocation of performance-based fees, commonly referred to as carried interest, to the Company from unaffiliated limited partners in the StepStone Funds in which the Company holds an equity interest. The Company is entitled to a carried interest allocation (typically 5 % to 20 %) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These carried interest allocations are subject to the achievement of minimum return levels (typically 5 % to 10 %) in accordance with the terms set forth in each respective fund’s governing documents. The Company accounts for its investment balances in the StepStone Funds, including carried interest allocations, under the equity method of accounting because it is presumed to have significant influence as the general partner or managing member. Accordingly, carried interest allocations are not deemed to be within the scope of ASC 606.
Legacy Greenspring carried interest allocations reflect the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest. The legacy Greenspring general partner entities are entitled to a carried interest allocation (typically 5 % to 20 %) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. The Company accounts for the investment balances in the legacy Greenspring funds, including carried interest allocations, under the equity method of accounting because it is presumed to have significant influence as the general partner or managing member. Accordingly, legacy Greenspring carried interest allocations are not deemed to be within the scope of ASC 606. The Company does not hold any direct economic interests in the legacy Greenspring general partner entities and thus is not entitled to any carried interest allocation from the legacy funds. All of the carried interest allocations in respect of the legacy Greenspring funds are payable to employees who are considered affiliates of the Company and are therefore reflected as legacy Greenspring performance fee-related compensation in the condensed consolidated statements of income (loss).
24
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Company recognizes revenue attributable to carried interest allocations from a fund based on the amount that would be due to the Company pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date. Accordingly, the amount recognized as carried interest allocation revenue reflects the Company’s share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period. The Company records the amount of carried interest allocated to the Company as of each period end as accrued carried interest allocations receivable, which is included as a component of investments in the condensed consolidated balance sheets. Management’s determination of fair value for investments in the underlying funds includes various valuation techniques. These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted average cost of capital, exit multiples, or terminal growth rates.
Compensation and Benefits
Cash-based compensation expense primarily includes salaries, bonuses, employee benefits, cash-based incentive awards and employer-related payroll taxes. Bonuses are accrued over the service period in which they are earned. Expense for cash-based incentive awards granted to employees is recognized and adjusted to fair value over the vesting period to track the performance for one of the Company’s designated investment funds. During fiscal 2025, the Company adopted the StepStone Group LP Evergreen Fund Incentive Plan, under which grants of share unit (“Evergreen fund units”) awards entitle the holder to receive shares of one of the Company’s evergreen investment funds, or the cash value thereof, following vesting. The Evergreen fund units, which vest over four years in equal installments subject to continued service through the vesting date, are accounted for as cash-based incentive awards. There were no grants of Evergreen fund units during the three and six months ended September 30, 2026. The Company recognized $0.2 million and $0.1 million of expense related to cash-based incentive awards for the three months ended September 30, 2026 and 2025, respectively, and $0.4 million and $0.3 million for the six months ended September 30, 2026 and 2025, respectively.
The Company sponsors a nonqualified deferred cash compensation plan under which eligible employees elect to defer a portion of their cash-based compensation to be payable at a future date.
The deferred compensation liability is remeasured at fair value at each reporting date. Changes in the fair value of the liability are recognized in cash-based compensation in the condensed consolidated statements of income (loss) and presented within accrued compensation and benefits within the consolidated balance sheets. The expense related to changes in the fair value of the deferred compensation liability was not significant for the three and six months ended September 30, 2026. There was no
25
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Income Taxes
SSG is a corporation for U.S. federal income tax purposes and therefore is subject to U.S. federal and state income taxes on its share of taxable income generated by the Partnership. The Partnership is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by the Partnership flows through to its limited partners, including SSG, and is generally not subject to U.S. federal or state income tax at the Partnership level. The Partnership’s non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to non-U.S. income taxes. Additionally, certain subsidiaries are subject to local jurisdiction taxes at the entity level, which are reflected within income tax expense in the condensed consolidated statements of income (loss). As a result, the Partnership does not record U.S. federal and state income taxes on income in the Partnership or its subsidiaries, except for certain local and foreign income taxes discussed above.
Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted. Deferred tax liabilities are included within accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets. The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of Partnership units. See Tax Receivable Agreements below.
Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent on the amount, timing and character of the Company’s future taxable income. When evaluating the realizability of deferred tax assets, all available positive and negative evidence is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies.
26
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Company is subject to the provisions of ASC Subtopic 740-10, Accounting for Uncertainty in Income Taxes. This standard establishes consistent thresholds as it relates to accounting for income taxes. It defines the threshold for recognizing the benefits of tax return positions in the financial statements as more-likely-than-not to be sustained by the relevant taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50% likely to be realized. If upon performance of an assessment pursuant to this subtopic, management determines that uncertainties in tax positions exist that do not meet the minimum threshold for recognition of the related tax benefit, a liability is recorded in the condensed consolidated financial statements. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as interest expense and general, administrative and other expenses, respectively, in the condensed consolidated statements of income (loss). See note 10 for more information.
The Company has elected to account for global intangible low-taxed income earned by foreign subsidiaries in the period the tax is incurred.
Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. The Company reviews its tax positions quarterly and adjusts its tax balances as new information becomes available.
Tax Receivable Agreements
Accumulated Other Comprehensive Income
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Foreign currency translation adjustments | $ | $ | |||||||||
| Unrealized gain on defined benefit plan, net | |||||||||||
Accumulated other comprehensive income | $ | $ | |||||||||
Segments
27
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Recent Accounting Pronouncements
The Company considers the applicability and impact of all Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ASUs issued during the current period not listed below were assessed and determined to either be not applicable to the Company, or not expected to have a material impact on the condensed consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which amends current guidance to add requirements for disaggregation of certain costs and expenses included within relevant expense captions. The update also requires the separate disclosure of total selling costs. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact on the condensed consolidated financial statements.
In September 2026, the FASB issued ASU 2026-03, Investment Companies with Equity Securities Subject to Contractual Sale Restrictions, which amends current guidance on how investment companies in the scope of ASC 946, Financial Services - Investment Companies, measure the fair value of an equity security that is subject to a contractual restriction that prohibits the sale of the security. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Amendments in this update are required to be applied on a prospective basis. The Company has early adopted this guidance as of September 30, 2026 and it did not have a material effect on the condensed consolidated financial statements.
3. Revenues
The following presents revenues disaggregated by product offering, which aligns with the Company’s performance obligations and the basis for calculating each amount:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| Management and Advisory Fees, Net | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
Focused commingled funds(1) | $ | $ | $ | $ | |||||||||||||||||||
| SMAs | |||||||||||||||||||||||
| Advisory and other services | |||||||||||||||||||||||
| Fund reimbursement revenues | |||||||||||||||||||||||
| Total management and advisory fees, net | $ | $ | $ | $ | |||||||||||||||||||
(1)Includes income-based incentive fees of $8.9 million and $5.3 million for the three months ended September 30, 2026 and 2025, respectively, and $15.9 million and $9.7 million for the six months ended September 30, 2026 and 2025, respectively.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| Incentive Fees | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| SMAs | $ | $ | $ | $ | |||||||||||||||||||
| Focused commingled funds | |||||||||||||||||||||||
| Total incentive fees | $ | $ | $ | $ | |||||||||||||||||||
28
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| Carried Interest Allocations | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| SMAs | $ | $ | $ | $ | |||||||||||||||||||
| Focused commingled funds | |||||||||||||||||||||||
| Total carried interest allocations | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| Legacy Greenspring Carried Interest Allocations | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| SMAs | $ | $ | $ | $ | |||||||||||||||||||
| Focused commingled funds | |||||||||||||||||||||||
Total legacy Greenspring carried interest allocations(1) | $ | $ | $ | $ | |||||||||||||||||||
(1)The three months ended September 30, 2026 and 2025 reflect the net effect of gross realized carried interest allocations of $12.0 million and $13.3 million, respectively, and the six months ended September 30, 2026 and 2025 reflect the net effect of gross realized carried interest allocations of $12.6 million and $18.2 million, respectively, and the reversal of such amounts in unrealized carried interest allocations for such periods.
See note 5 for a discussion of changes in carried interest allocations and legacy Greenspring carried interest allocations.
The Company derives revenues from clients located in both the United States and other countries. The table below presents the Company’s revenues by geographic location:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
Revenues(1) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Non-U.S. countries | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
(1)Revenues are attributed to countries based on client location for SMAs and advisory and other services, or location of investment vehicle for focused commingled funds.
For the three and six months ended September 30, 2026 and 2025, no individual client represented 10% or more of the Company’s net management and advisory fees. For the three and six months ended September 30, 2026 and 2025, two
For the three and six months ended September 30, 2026 and 2025, the Company had management and advisory fee revenues attributable to the United States, which represented 10% or more of the Company’s net management and advisory fees.
For the three and six months ended September 30, 2026 and 2025, the Company had incentive fees attributable to Australia, which represented 10% or more of the Company’s incentive fees.
As of September 30, 2026 and March 31, 2026, the Company had $24.3 million and $23.8 million, respectively, of deferred revenues, which is included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets. During the six months ended September 30, 2026, the Company had recognized $2.7 million as revenue from amounts included in the deferred revenue balance as of March 31, 2026.
29
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
4. Variable Interest Entities
Consolidated VIEs
The Company consolidates certain VIEs for which it is the primary beneficiary. Such VIEs consist of certain operating entities not wholly-owned by the Company (e.g., SPD, SRA and SRE), SPW, legacy Greenspring general partner entities and certain StepStone Funds, including a CFE vehicle. See note 2 for more information on the Company’s accounting policies related to the consolidation of VIEs. The assets of the consolidated VIEs totaled $4,728.7 million and $2,822.5 million as of September 30, 2026 and March 31, 2026, respectively. The liabilities of the consolidated VIEs totaled $5,412.9 million and $3,969.2 million as of September 30, 2026 and March 31, 2026, respectively. The assets of the consolidated VIEs may only be used to settle obligations of the same VIE. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest. As of September 30, 2026 and March 31, 2026, no material amounts previously distributed have been accrued for clawback liabilities.
Unconsolidated VIEs
The Company holds variable interests in the form of direct equity interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary. The Company’s maximum exposure to loss is limited to the potential loss of assets recognized by the Company relating to these unconsolidated entities, as well as unfunded capital commitments to the StepStone Funds. For StepStone Funds in which the Company serves as general partner, the Company may have an obligation to make additional capital contributions. See note 14 for further information about the Company’s unfunded capital commitments to the StepStone Funds. The carrying value of the assets and liabilities recognized in the condensed consolidated balance sheets with respect to the Company’s interests in VIEs that were not consolidated is set forth below:
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Investments in funds | $ | $ | |||||||||
| Legacy Greenspring investments in funds | |||||||||||
| Due from affiliates, net | |||||||||||
| Less: Amounts attributable to non-controlling interests in subsidiaries | |||||||||||
| Less: Amounts attributable to non-controlling interests in legacy Greenspring entities | |||||||||||
| Maximum exposure to loss | $ | $ | |||||||||
5. Investments
The Company’s investments consist of equity method investments primarily related to (i) investments in the StepStone Funds for which it serves as general partner or managing member but does not have a controlling financial interest and (ii) investments of Consolidated Funds. The Company’s equity interest in its equity method investments in the StepStone Funds typically does not exceed 1 % in each fund. The Company’s share of the underlying net income or loss attributable to its equity interest in the funds is recorded in investment income (loss) in the condensed consolidated statements of income (loss). Investment income attributable to the Consolidated Funds is recorded in investment income of Consolidated Funds. Investment income attributable to investments in certain legacy Greenspring funds for which the Company has no direct economic interests is recorded in legacy Greenspring investment income (loss) in the condensed consolidated statements of income (loss).
30
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Equity Method Investments
The Company’s equity method investments consist of the following:
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
Investments in funds(1) | $ | $ | |||||||||
| Accrued carried interest allocations | |||||||||||
Legacy Greenspring investments in funds and accrued carried interest allocations(2) | |||||||||||
| Total equity method investments | $ | $ | |||||||||
(1)The Company’s investments in funds were $387.0 million and $347.2 million as of September 30, 2026 and March 31, 2026, respectively. The consolidation of the Consolidated Funds results in the elimination of the Company’s investments in such funds.
(2)Reflects investments in funds of $128.1 million and $133.6 million and carried interest allocations of $759.8 million and $619.2 million as of September 30, 2026 and March 31, 2026, respectively.
The Company recognized equity method income of the following:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Carried interest allocations | $ | $ | $ | $ | |||||||||||||||||||
| Investment income (loss) | ( | ||||||||||||||||||||||
| Legacy Greenspring carried interest allocations | |||||||||||||||||||||||
| Legacy Greenspring investment income (loss) | ( | ||||||||||||||||||||||
| Total equity method income | $ | $ | $ | $ | |||||||||||||||||||
The increase in carried interest allocations for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 was primarily attributable to higher net unrealized appreciation in the fair value of certain underlying fund investments in the Company’s private equity, infrastructure and real estate funds. The increase in carried interest allocations for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025 was primarily attributable to higher net unrealized appreciation in the fair value of certain underlying fund investments in the Company’s private equity and infrastructure funds as well as net unrealized appreciation in the fair value of certain underlying fund investments in the Company’s real estate funds in the current year period as compared to net unrealized depreciation in the prior year period. The increase in legacy Greenspring carried interest allocations for the three and six months ended September 30, 2026 as compared to the three and six months ended September 30, 2025 was primarily attributable to higher net unrealized appreciation in the fair value of certain underlying fund investments in the current year periods as compared to the prior year periods. See note 2 for a discussion of the Company’s accounting policy for investments on a three-month lag.
31
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
As of September 30, 2026, the Company’s investment in two SMAs each individually represented 10% or more of the total accrued carried interest allocations balance, and in the aggregate represented approximately 30 % of the total accrued carried interest allocations balance. As of March 31, 2026, the Company’s investment in one SMA represented 10% or more of the total accrued carried interest allocations balance, and in the aggregate represented approximately 12 % of the total accrued carried interest allocations balance. As of September 30, 2026, the Company’s investments in each of two commingled funds individually represented 10% or more of the total legacy Greenspring accrued carried interest allocations balance, and in the aggregate represented approximately 50 % of the total legacy Greenspring accrued carried interest allocations balance. As of March 31, 2026, the Company’s investments in each of three commingled funds individually represented 10% or more of the total legacy Greenspring accrued carried interest allocations balance, and in the aggregate represented approximately 57 % of the total legacy Greenspring accrued carried interest allocations balance.
Of the total accrued carried interest allocations balance as of September 30, 2026 and March 31, 2026, $1,356.0 million and $1,100.6 million, respectively, were payable to affiliates and are included in accrued carried interest-related compensation in the condensed consolidated balance sheets. Of the total legacy Greenspring investments in funds and accrued carried interest allocations balance as of September 30, 2026 and March 31, 2026, $759.8 million and $619.2 million, respectively, were payable to former employees, as well as employees who are considered affiliates of the Company, and are included in legacy Greenspring accrued carried interest-related compensation in the condensed consolidated balance sheets and $128.1 million and $133.6 million, respectively, are reflected as non-controlling interests in legacy Greenspring entities in the condensed consolidated balance sheets.
The Company evaluates each of its equity method investments to determine if any are considered significant as defined by the SEC. As of September 30, 2026 and March 31, 2026, no individual equity method investment held by the Company met the significance criteria. As a result, the Company is not required to provide separate financial statements for any of its equity method investments.
Investments of Consolidated Funds
The Company consolidates funds and entities when it is deemed to hold a controlling financial interest. The activity of the Consolidated Funds is reflected within the condensed consolidated financial statements.
Investments held by the Consolidated Funds are summarized below:
| Fair Value as of | Percentage of Total Investments as of | ||||||||||||||||||||||
| September 30, 2026 | March 31, 2026 | September 30, 2026 | March 31, 2026 | ||||||||||||||||||||
| Investments of Consolidated Funds: | |||||||||||||||||||||||
Equity securities (cost of $ | $ | $ | % | % | |||||||||||||||||||
Debt securities (cost of $ | % | % | |||||||||||||||||||||
Fund investments (cost of $ | % | % | |||||||||||||||||||||
| Total investments of Consolidated Funds | $ | $ | % | % | |||||||||||||||||||
As of September 30, 2026 and March 31, 2026, no individual investment had a fair value greater than 5% of the Company’s total assets. During the three and six months ended September 30, 2026, the Company consolidated five and 11 additional StepStone Funds, respectively, which resulted in an increase in investments of Consolidated Funds.
32
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The following table summarizes the net realized and unrealized gains from investment activities of the Consolidated Funds:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Investment Income of Consolidated Funds: | |||||||||||||||||||||||
| Net realized gains on investments | $ | $ | $ | $ | |||||||||||||||||||
Net unrealized gains on investments | |||||||||||||||||||||||
| Total investment income of Consolidated Funds | $ | $ | $ | $ | |||||||||||||||||||
6. Fair Value Measurements
The Company measures certain assets and liabilities at fair value on a recurring basis.
Financial Instruments of the Company
As of September 30, 2026 and March 31, 2026, the Company held no financial instruments within the fair value hierarchy measured at fair value on a recurring basis.
Financial Instruments of Consolidated Funds
| As of September 30, 2026 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Equity securities | $ | $ | $ | $ | |||||||||||||||||||
| Debt securities | |||||||||||||||||||||||
| Total assets measured at fair value | |||||||||||||||||||||||
Assets measured at net asset value(1) | — | — | — | ||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
Debt obligations of Consolidated Funds(2)(3) | $ | $ | $ | $ | |||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | |||||||||||||||||||
(1)Includes investments in funds measured at NAV. See note 2 for further information.
(2)Debt obligations of Consolidated Funds consist of notes issued by a consolidated CFE, which are measured using the measurement alternative for collateralized financing entities. See note 2 for further information.
(3)Debt obligations of Consolidated Funds exclude $582.3 million of lines of credit carried at amortized cost. The carrying value of the lines of credit approximates fair value as these borrowings are subject to variable interest rates that adjust with changes in market rates and market conditions and the current interest rate approximates that which would be available under similar financial arrangements.
33
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
| As of March 31, 2026 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Equity securities | $ | $ | $ | $ | |||||||||||||||||||
| Debt securities | |||||||||||||||||||||||
| Total assets measured at fair value | |||||||||||||||||||||||
Assets measured at net asset value(1) | — | — | — | ||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
Debt obligations of Consolidated Funds(2) | $ | $ | $ | $ | |||||||||||||||||||
| Forward foreign currency contracts | |||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | |||||||||||||||||||
_______________________________
(1)Includes investment in funds, which are generally organized as partnership and LLC interests measured using the NAV per share equivalent calculated by the investment manager as a practical expedient in determining an independent fair value.
(2)As of March 31, 2026, the carrying value of the debt obligations of Consolidated Funds approximates fair value as the closing date of the fund and issuance of notes payable by the fund occurred near the reporting date.
For the financial instruments presented in the tables above, there were no
Reconciliations from the beginning balance to the closing balance of Level III financial instruments of Consolidated Funds are set forth below:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Financial Assets of Consolidated Funds | |||||||||||||||||||||||
| Balance, beginning of period: | $ | $ | $ | $ | |||||||||||||||||||
Purchases | |||||||||||||||||||||||
Change in fair value | ( | ( | |||||||||||||||||||||
| Sales | ( | ( | |||||||||||||||||||||
Settlements | ( | ||||||||||||||||||||||
| Balance, end of period: | $ | $ | $ | $ | |||||||||||||||||||
Changes in unrealized gains (losses) included in earnings related to financial assets still held at the reporting date | $ | ( | $ | $ | ( | $ | |||||||||||||||||
34
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Financial Liabilities of Consolidated Funds(1) | |||||||||||||||||||||||
| Balance, beginning of period: | $ | $ | $ | $ | |||||||||||||||||||
| Borrowings | |||||||||||||||||||||||
Transfers out of Level III(2) | ( | ( | |||||||||||||||||||||
Change in fair value | ( | ||||||||||||||||||||||
| Balance, end of period: | $ | $ | $ | $ | |||||||||||||||||||
Changes in unrealized (gains) losses included in earnings related to financial liabilities still held at the reporting date | $ | $ | $ | ( | $ | ||||||||||||||||||
_______________________________
(1)The Company consolidates a CFE vehicle that issues notes payable that are backed by diversified collateral asset portfolios consisting primarily of equity investments in several of the StepStone Funds. The debt obligations of the CFE vehicle have been presented as Level III financial liabilities.
(2)Relates to non-controlling interests attributable to CFE subordinated notes.
Realized and unrealized gains and losses for Level III investments of Consolidated Funds are included within investment income of Consolidated Funds in the condensed consolidated statements of loss, and such gains and losses for Level III debt obligations of Consolidated Funds are included within other income (loss) in the condensed consolidated statements of loss.
The debt obligations of the CFE are not publicly traded and are classified as Level III. As described in note 2, these liabilities are measured on the basis of the fair value of the CFE’s financial assets and the beneficial interests retained by the Company. The Company measures the fair value of its retained beneficial interests using a discounted cash flow analysis, which includes assumptions regarding the expected timing of capital draws and distributions. As of September 30, 2026, the significant unobservable input used in the discounted cash flow analysis was the discount rate of 31.2 %. An increase in the discount rate would result in a lower fair value of the retained beneficial interests and a correspondingly higher fair value of the debt obligations of the CFE.
35
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
7. Intangibles and Goodwill
Intangible assets consist of management contracts providing economic rights to management and advisory fees and client relationships related to future fundraising, as obtained through the Company’s acquisitions of other businesses.
Intangible assets, net consists of the following:
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Management contracts | $ | $ | |||||||||
| Client relationships | |||||||||||
| Less: Accumulated amortization | ( | ( | |||||||||
| Intangible assets, net | $ | $ | |||||||||
Amortization expense related to intangible assets was $10.2 20.4
At September 30, 2026, the expected future amortization of finite-lived intangible assets is as follows:
| Remainder of FY2027 | $ | ||||
| FY2028 | |||||
| FY2029 | |||||
| FY2030 | |||||
| FY2031 | |||||
| Thereafter | |||||
| Total | $ | ||||
The carrying value of goodwill was $580.5 no
8. Debt Obligations
Debt Obligations of the Company
The Company’s debt obligations consist of the following:
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Series A senior notes | $ | $ | |||||||||
| Revolver | |||||||||||
| Total remaining principal | |||||||||||
| Less: Debt issuance costs | ( | ( | |||||||||
| Total debt obligations | $ | $ | |||||||||
36
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Senior Notes
On October 22, 2024, the Partnership issued $175.0 million aggregate principal amount of its 5.52 % Series A senior notes due October 22, 2029 (the “Notes”), pursuant to a note purchase agreement, dated as of October 22, 2024 (the “Note Purchase Agreement”), in a private placement exempt from registration under the Securities Act.
Interest on the Notes is payable semi-annually in arrears on April 22 and October 22 of each year. Interest on the Notes accrues from and including October 22, 2024. The Notes will mature on October 22, 2029. The Partnership may, at its option, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5 % of the aggregate principal amount of the Notes then outstanding at a redemption price equal to 100 % of the principal amount thereof plus any applicable “make-whole amount” and accrued and unpaid interest to the redemption date. So long as no default or event of default shall have occurred and be continuing under the Note Purchase Agreement, no make-whole amount will be due if the Notes are paid on or after April 22, 2029.
The fair value of the Notes, which are recorded at amortized cost, is classified as a Level III valuation within the fair value hierarchy. As of September 30, 2026 and March 31, 2026, respectively, the carrying value of the Notes, net of debt issuance costs, approximated fair value.
Revolving Credit Facility
The Company is party to a credit agreement, as amended and restated in May 2024 (the “Credit Agreement”), which, among other things, increased the aggregate principal amount of the commitments thereunder to $300.0 million from $225.0 million and extended the maturity date of the revolving facility to May 2029. The Credit Agreement was arranged by JPMorgan Chase Bank, N.A., as the administrative agent and collateral agent, and certain other lenders party thereto and provides for a $300.0 million multicurrency revolving credit facility (the “Revolver”).
Borrowings under the Revolver bear interest at a variable rate per annum. The Company may designate each borrowing as (i) in the case of any borrowing in U.S. dollars, a base rate loan or a Term Secured Overnight Financing Rate (“SOFR”) rate loan, (ii) in the case of any borrowing denominated in Euros, a EURIBOR rate loan, (iii) in the case of any borrowing denominated in British Pounds Sterling, a Sterling Overnight Index Average (“SONIA”) loan, (iv) in the case of any borrowing denominated in Swiss Francs, a Swiss Average Rate Overnight (“SARON”) loan, and (v) in the case of any borrowing denominated in Australian dollars, an AUD rate loan. Borrowings bear interest equal to (i) in the case of base rate loans, 1.00 % plus the greatest of (a) the Prime Rate, (b) the New York Federal Reserve Bank Rate plus 0.50 % and (c) the 1 month Term SOFR, plus 1.10 %, (ii) in the case of a Term SOFR rate loan, the Term SOFR rate plus 2.10 %, (iii) in the case of a EURIBOR rate loan, the EURIBOR rate multiplied by the Statutory Reserve Rate (as defined in the Credit Agreement) plus 2.00 %, (iv) in the case of a SONIA loan, the Sterling Overnight Index Average plus 2.03 %, (v) in the case of a SARON loan, the Swiss Average Rate Overnight plus 2.00 %, and (vi) in the case of an AUD rate loan, the AUD Screen Rate (as defined in the Credit Agreement) multiplied by the Statutory Reserve Rate plus 2.20 %, in certain cases subject to applicable interest rate floors. The weighted-average interest rate in effect for the Revolver as of September 30, 2026 was 5.91 %.
Borrowings under the Revolver may be repaid at any time during the term of the Credit Agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the maturity date. The maturity date for the Revolver is May 16, 2029. As of September 30, 2026, the Company had outstanding borrowings of $115.0 million under the Revolver.
37
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Revolver bears a fee on undrawn commitments equal to 0.25 % per annum if total utilization of revolving commitments is equal to or greater than 50% and 0.35 % per annum if total utilization of revolving commitments is less than 50%.
The carrying value of the Revolver approximates fair value, as the loan is subject to variable interest rates that adjust with changes in market rates and market conditions and the current interest rate approximates that which would be available under similar financial arrangements.
The Company can use available funding capacity under the Revolver to satisfy letters of credit in amounts up to $10.0 million. Amounts used to satisfy the letters of credit reduce the available capacity under the Revolver. As of September 30, 2026, the Company had outstanding letters of credit totaling $9.1 million.
Debt Obligations of Consolidated Funds
The debt obligations of the Consolidated Funds consist of the following:
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
Senior secured notes(1) | $ | $ | |||||||||
Subordinated notes(2) | |||||||||||
| Lines of credit | |||||||||||
Total debt obligations of Consolidated Funds(3) | $ | $ | |||||||||
(1)As of September 30, 2026, the weighted-average interest rate for the senior secured notes was 7.68 %. The senior secured notes do not require scheduled principal repayments and the entire principal amount is due at maturity in April 2041. Interest on the senior secured notes is accrued at the contractual rate and recognized in interest expense in the condensed consolidated statements of loss, separately from changes in the measured value of the notes, which are recognized in other income (loss).
(2)The subordinated notes do not have contractual interest rates but instead receive the residual of cash flows from underlying investments after the priority repayment of principal and interest to the senior noteholders.
(3)As of September 30, 2026 and March 31, 2026, the unpaid principal balance of debt obligations of Consolidated Funds was $1,407.7 million and $931.2 million, respectively.
Debt obligations of the Consolidated Funds primarily comprise amounts due to holders of debt securities issued by a consolidated CFE. These debt obligations are collateralized by the assets held by the CFE and are non-recourse to the Company. The Company is not liable for any of the notes payable issued by the CFE, as the creditors of the CFE do not have recourse to the Company’s assets outside of the assets held by the CFE. As of September 30, 2026, the collateral of the CFE consisted of cash and cash equivalents and investments in funds which are generally organized as partnership and LLC interests. The debt obligations may only be repaid from collateral proceeds of the CFE, which will occur as distributions are received from underlying assets. Debt obligations of the Consolidated Funds are collateralized by the assets held by the Consolidated Funds and the assets of one fund may not be used to satisfy the liabilities of another fund.
As of September 30, 2026, the consolidated CFE has the ability to issue up to $1,625.5 million of additional debt obligations.
Credit Facilities of Consolidated Funds
Certain Consolidated Funds may maintain revolving credit facilities that are secured by fund assets to fund investments on a short-term basis. These debt obligations of the Consolidated Funds are non-recourse to the Company.
38
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
In December 2024, one of the Company’s consolidated investment funds entered into a credit agreement with Northern Trust Global Service SE (the “Fund Credit Facility”). The Fund Credit Facility provides for a multi-currency revolving credit facility of up to $125.0 million. Amounts drawn under the facility must be repaid within 180 days. As of September 30, 2026, there were no outstanding borrowings under the Fund Credit Facility.
Borrowings under the Fund Credit Facility bear interest at a variable rate per annum. Borrowings in USD will bear interest at the applicable federal funds target rate (upper range) plus a margin of 250 basis points. Borrowings in GBP will bear interest at the Bank of England base rate plus a margin of 250 basis points. Borrowings in EUR will bear interest at the European Central Bank main refinancing rate plus a margin of 250 basis points.
In September 2026, the Fund Credit Facility was amended to remove the fund as a borrower, and as a result the Fund Credit Facility is not reflected in the condensed consolidated financial statements. The Fund Credit Facility remains in effect for the other borrowers. The fund entered into a senior secured credit agreement with Investec Bank plc, as administrative agent, security agent and lender, providing for a revolving credit facility of up to $83.0 million (the “Investec Credit Facility”). As of September 30, 2026, there were no outstanding borrowings under the Investec Credit Facility.
Borrowings under the Investec Credit Facility bear interest at a variable rate per annum at the Term SOFR plus a margin of 280 basis points. The facility also bears an unused commitment fee of 1.00 % per annum.
Borrowings under the Investec Credit Facility may be repaid at any time during the term of the agreement and, subject to certain terms and conditions, may be reborrowed prior to the termination date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the termination date. The termination date for the Investec Credit Facility is September 21, 2029.
In March 2026, the Company’s consolidated CFE entered into a credit agreement arranged by Alter Domus LLC, as the administrative agent, and certain other lenders party thereto that provides for a revolving credit facility (the “Liquidity Loan Facility”) of up to $389.7 million. As of September 30, 2026, there were no outstanding borrowings under the Liquidity Loan Facility.
Borrowings under the Liquidity Loan Facility bear interest at a variable rate per annum at the Term SOFR plus a margin of 270 basis points. The facility also bears an unused commitment fee of 1.00 % per annum.
Borrowings under the Liquidity Loan Facility may be repaid at any time during the term of the agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the maturity date. The maturity date for the Liquidity Loan Facility is March 23, 2031.
In May 2026, one of the Company's consolidated investment funds entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, lead arranger, letter of credit issuer and lender, providing for a revolving credit facility of up to $675.0 million (“Subscription Facility #1”). In August 2026, Subscription Facility #1 was amended, increasing the aggregate revolving commitments to $1,000.0 million. As of September 30, 2026, there were approximately $422.9 million in outstanding borrowings under Subscription Facility #1.
Borrowings under Subscription Facility #1 bear interest at a variable rate equal to SOFR plus 1.80 % per annum. In addition, Subscription Facility #1 is subject to an unused commitment fee of 0.25 % per annum on undrawn commitments and customary fees associated with letters of credit. The weighted-average interest rate in effect under Subscription Facility #1 as of September 30, 2026 was 5.68 %.
39
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
During the availability period, amounts borrowed under Subscription Facility #1 may be repaid and subsequently reborrowed, subject to the terms and conditions of the credit agreement. Obligations under Subscription Facility #1 are secured by investor capital commitments and related collateral pledged to the lenders. Subscription Facility #1 matures on May 4, 2029 and may be extended in accordance with the terms of the credit agreement.
In June 2026, one of the Company’s consolidated investment funds entered into a supplemental credit agreement arranged by Lloyds Bank Corporate Markets PLC, as the agent and security agent, and UBS Switzerland AG, as the lender, establishing an additional revolving credit sub-facility of up to $160.0 million (the “Sub-Facility”). As of September 30, 2026, there were approximately $85.0 million in outstanding borrowings under the Sub-Facility.
Borrowings under the Sub-Facility bear interest at a variable rate per annum based on the applicable benchmark rate plus a margin of 170 basis points. The Sub-Facility also bears a commitment fee of 0.25 % per annum. The weighted-average interest rate in effect for the Sub-Facility as of September 30, 2026 was 5.56 %.
Borrowings under the Sub-Facility may be repaid in accordance with the terms of the supplemental credit agreement and, subject to certain terms and conditions, may be reborrowed prior to the termination date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the termination date. The termination date for the Sub-Facility is 365 days from the effective date, subject to the extension option under the facilities agreement.
One of the Company’s consolidated investment funds is party to a credit agreement, as amended and restated in March 2026, with Goldman Sachs Bank USA that provides for an uncommitted revolving credit facility of up to $37.0 million (the “Goldman Credit Facility”). As of September 30, 2026, there were approximately $18.2 million in outstanding borrowings under the Goldman Credit Facility.
Borrowings under the Goldman Credit Facility bear interest at a variable rate per annum equal to the Term SOFR plus 310 basis points or the Prime Rate plus 210 basis points. The Goldman Credit Facility also requires payment of a quarterly administrative fee equal to 15 basis points of the facility limit. The interest rate in effect for the Goldman Credit Facility as of September 30, 2026 was 6.78 %.
Borrowings under the Goldman Credit Facility may be repaid at any time during the term of the credit agreement and, subject to the terms of the credit agreement, may be reborrowed. The Goldman Credit Facility terminates on the earlier of (i) the date that is 30 days prior to the last date on which capital may be called from investors to repay obligations under the facility or (ii) the date on which the credit agreement is terminated by either the lender or the borrower.
One of the Company's consolidated investment funds is party to a credit agreement, as amended in August 2026, with Wells Fargo Bank, National Association, as administrative agent, lead arranger, letter of credit issuer and lender, providing for a revolving credit facility of up to $66.5 million (“Subscription Facility #2”). As of September 30, 2026, there were approximately $57.7 million in outstanding borrowings under Subscription Facility #2.
Borrowings under Subscription Facility #2 bear interest at a variable rate equal to SOFR plus 2.00 % per annum. In addition, Subscription Facility #2 is subject to an unused commitment fee of 0.20 % per annum on undrawn commitments and customary fees associated with letters of credit. The weighted-average interest rate in effect under Subscription Facility #2 as of September 30, 2026 was 5.90 %.
40
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
During the availability period, amounts borrowed under Subscription Facility #2 may be repaid and subsequently reborrowed, subject to the terms and conditions of the credit agreement. Obligations under Subscription Facility #2 are secured by investor capital commitments and related collateral pledged to the lenders. Subscription Facility #2 matures on August 7, 2029 and may be extended in accordance with the terms of the credit agreement.
Debt Covenants
Senior Notes
The Note Purchase Agreement contains certain covenants, including those requiring the Company to (a) maintain a total net leverage ratio, (b) maintain a minimum total of fee-earning assets under management, (c) cause at least 80 % of all management fees payable by material subsidiaries to the Company to be collected each period without deferral, waiver or reduction, (d) limit the amount of secured indebtedness to be incurred by the Company, and (e) other customary covenants. The Note Purchase Agreement also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all Notes, plus all accrued and unpaid interest thereon and any applicable “make-whole amount” to become or to be declared due and payable immediately.
Revolving Credit Facility
Under the terms of the Credit Agreement, certain of the Company’s assets serve as pledged collateral. In addition, the Credit Agreement contains covenants that, among other things: limit the Company’s ability to incur indebtedness; create, incur or allow liens; transfer or dispose of assets; merge with other companies; make certain investments; pay dividends or make distributions in certain circumstances; engage in new or different lines of business; and engage in certain transactions with affiliates. The Credit Agreement also contains financial covenants requiring the Company to maintain a total net leverage ratio and a minimum total of fee-earning assets under management.
Investec Credit Facility
Under the terms of the Investec Credit Facility, certain assets of the Consolidated Funds serve as pledged collateral. In addition, the Investec Credit Facility contains covenants that, among other things: limit the ability of the fund to incur indebtedness; create, incur or allow liens; and other customary covenants. The Investec Credit Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Investec Credit Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately.
Liquidity Loan Facility
Under the terms of the Liquidity Loan Facility, certain assets of the Consolidated Funds serve as pledged collateral. In addition, the Liquidity Loan Facility contains covenants that, among other things: limit the ability of the fund to incur indebtedness; create, incur or allow liens; and other customary covenants. The Liquidity Loan Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Liquidity Loan Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately.
41
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Subscription Facility #1
Under the terms of Subscription Facility #1, certain assets of the Consolidated Funds, including investor capital commitments and related collateral accounts, serve as pledged collateral. In addition, Subscription Facility #1 contains customary affirmative and negative covenants, including restrictions on creating, incurring or permitting liens on collateral and certain other activities. The credit agreement contains customary representations and warranties, borrowing conditions, collateral maintenance provisions, and events of default.
Sub-Facility
Under the terms of the Sub-Facility, certain assets of the Consolidated Funds serve as pledged collateral. Additionally, the Sub-Facility provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Sub-Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately. The Sub-Facility also contains financial covenants requiring the fund to maintain an uncalled capital commitment coverage ratio.
Goldman Credit Facility
Under the terms of the Goldman Credit Facility, certain assets of the Consolidated Funds serve as pledged collateral. In addition, the Goldman Credit Facility contains customary affirmative and negative covenants, including restrictions on creating, incurring or permitting liens on collateral and certain other activities. The Goldman Credit Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Goldman Credit Facility, together with accrued and unpaid interest thereon, including default interest, to become immediately due and payable.
Subscription Facility #2
Under the terms of Subscription Facility #2, certain assets of the Consolidated Funds, including investor capital commitments and related collateral accounts, serve as pledged collateral. In addition, Subscription Facility #2 contains customary affirmative and negative covenants, including restrictions on creating, incurring or permitting liens on collateral and certain other activities. The credit agreement contains customary representations and warranties, borrowing conditions, collateral maintenance provisions and events of default.
As of September 30, 2026, the Company was in compliance with the covenants under its various debt agreements.
9. Equity-Based Compensation
Restricted Stock Units
The change in unvested RSUs is as follows:
| Number of RSUs | Weighted-Average Grant-Date Fair Value Per RSU | ||||||||||
| Balance as of March 31, 2026 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | ( | ||||||||
| Forfeited | ( | $ | ( | ||||||||
| Balance as of September 30, 2026 | $ | ||||||||||
42
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Performance-Based Restricted Stock Units
The change in unvested PRSUs is as follows:
| Number of PRSUs | Weighted-Average Grant-Date Fair Value Per PRSU | ||||||||||
| Balance as of March 31, 2026 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | $ | ||||||||||
| Forfeited | $ | ||||||||||
| Balance as of September 30, 2026 | $ | ||||||||||
As of September 30, 2026, $54.6 million of unrecognized non-cash compensation expense in respect of equity-based awards remained to be recognized over a weighted-average period of approximately 2.9 years.
Liability Classified Awards
In November 2022, the Company issued a profits interest in SPW to certain employees of the SPW team and concurrently entered into an option agreement which provides that (i) StepStone has the right to acquire the profits interest at the end of any fiscal quarter after June 30, 2027, in exchange for payment of a call price and (ii) an entity named CH Equity Partners, LLC, held by the SPW management team and other employees of SPW, has the right to put the profits interest to StepStone on June 30, 2026 or at the end of any fiscal quarter thereafter, in exchange for payment of a put price. The applicable call or put price is, in certain circumstances, subject to an earn-out or earn-down. The call or put price will be payable in cash unless the Company elects to pay up to 75 % of the consideration in units of the Partnership, each to be exchangeable into shares of the Company’s Class A common stock, and, in either case, rights under one or more tax receivable agreements. As of September 30, 2026, the put right held by CH Equity Partners, LLC has not been exercised.
The Company accounted for the profits interest and option agreement as a single unit of account as a liability classified equity-based award. There are no vesting provisions or service requirements related to the award. As of September 30, 2026 and March 31, 2026, the fair value of the liability classified awards was based on the contractual redemption price. The contractual redemption price is calculated based on the adjusted net income of SPW multiplied by an adjusted trading multiple for the Company’s Class A common stock, and then increased or reduced for certain other specified items. A third-party valuation specialist assisted the Company with the fair value estimate for the awards. Certain assumptions used in determining the fair value are inherently subjective; therefore, the ultimate settlement amount for the liability classified awards may differ materially from the current estimate. The significant unobservable inputs required to value the liability classified awards primarily relate to future projected earnings of SPW, a discount rate and an adjusted trading multiple. The Company applied a discount rate of 25 % and 27 % as of September 30, 2026 and March 31, 2026, and an adjusted trading multiple of 14.2 x and 14.7 x as of September 30, 2026 and March 31, 2026, respectively.
43
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Company recognized $372.1 million and $879.7 million during the three months ended September 30, 2026 and 2025, respectively, and $682.3 million and $1,063.7 million during the six months ended September 30, 2026 and 2025, respectively, of expense related to liability classified awards within equity-based compensation expense in the condensed consolidated statements of loss. For the three months ended September 30, 2026 and 2025, the Company paid $28.2 million and $8.5 million, respectively, related to the settlement of liability classified awards. For the six months ended September 30, 2026 and 2025, the Company paid $51.3 million and $15.1 million, respectively, related to the settlement of liability classified awards. As of September 30, 2026 and March 31, 2026, the Company had recognized $2,896.7 million and $2,265.8 million, respectively, for liability classified awards within accrued compensation and benefits in the condensed consolidated balance sheets, including the fair value of unsettled liability classified awards and unpaid distributable cash allocated to the holder of the profits interest.
Employee Stock Purchase Plan
The Company has an ESPP under which eligible employees may purchase shares of Class A common stock of the Company at six-month period intervals for 85 % of the lower of the fair market value on either the first or last trading day of the offering period. The offering periods run from April 1 to September 30, and October 1 to March 31 each year. Each eligible employee may purchase up to five thousand dollars worth of shares each six-month offering period, limited to a maximum of 1,000 shares. During the three and six months ended September 30, 2026, 57,164 37,712 1,987,265 shares of Class A common stock reserved for future issuances under the ESPP.
10. Income Taxes
In connection with the exchanges of Class B and Class D units of the Partnership for Class A common stock by certain limited partners of the Partnership during the three months ended September 30, 2026, the Company recorded an increase to the deferred tax assets of $1.2 million and a decrease in the valuation allowance of $0.3 million. Additionally, a corresponding Tax Receivable Agreements liability of $1.4 million was recorded, representing 85 % of the incremental net cash tax savings for the Company as a result of these exchanges. The Company made no 16.2 million and $11.5 million during the six months ended September 30, 2026 and 2025, respectively, under the Tax Receivable Agreements. As of September 30, 2026, the Company’s total Tax Receivable Agreements liability was $342.5 million. See note 12 for more information on the Tax Receivable Agreements.
During the three and six months ended September 30, 2026, the Company recognized equity-based compensation expense related to the profits interest issued in SPW, which is accounted for as a liability classified award. This expense is not currently deductible for tax purposes, resulting in a temporary difference that increased the Company’s deferred tax assets by $51.1 million and $93.4 million during the three and six months ended September 30, 2026, respectively. See note 9 for more information.
44
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The Company’s effective income tax rate was (36.2 )% and 14.8 % for the three months ended September 30, 2026 and 2025, respectively, and 31.1 % and 15.6 % for the six months ended September 30, 2026 and 2025, respectively. For each period presented, the effective income tax rate differed from the statutory rate primarily because a portion of pre-tax income (loss) is attributable to non-controlling interests, including third-party investors in the Consolidated Funds, and the related tax expense (benefit) is not attributable to the Company. The change in the effective income tax rate for the three and six months ended September 30, 2026, compared with the prior year periods, was mainly driven by the impact of non-controlling interests related to the consolidation of additional Consolidated Funds. For the three months ended September 30, 2026, the Company recorded an income tax benefit on pre-tax income, resulting in a negative effective income tax rate. The effective income tax rate may vary from period to period depending on the portion of income that is subject to tax and the impact of non-controlling interests, including non-controlling interests in Consolidated Funds.
The Global Anti-Base Erosion Model Rules established under the Organization for Economic Co-operation and Development’s Pillar Two framework have been adopted in several countries where the Company operates. To date, these legislative changes have not had a material impact on the Company’s effective income tax rate. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on its future tax liability.
The Company evaluates the realizability of its deferred tax assets on a quarterly basis and adjusts the valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax assets may not be realized.
As of September 30, 2026, the Company has not recorded any unrecognized tax benefits and does not expect there to be any material changes to uncertain tax positions within the next 12 months.
45
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
11. Earnings Per Share
Basic and diluted earnings per share of Class A common stock are presented for the three and six months ended September 30, 2026 and 2025. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except share and per share amounts) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss attributable to StepStone Group Inc. – Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net loss attributable to StepStone Group Inc. – Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
Weighted-average shares of Class A common stock outstanding – Basic | |||||||||||||||||||||||
Weighted-average shares of Class A common stock outstanding – Diluted | |||||||||||||||||||||||
| Net loss per share of Class A common stock: | |||||||||||||||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted earnings per share of Class A common stock is computed by dividing net loss attributable to SSG, giving consideration to the reallocation of net income between holders of Class A common stock and non-controlling interests, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities, if any.
Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to SSG and therefore are not participating securities. As a result, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included.
The calculation of diluted earnings per share excludes 38,326,745 Class B units, 881,103 Class C units and 3,471,350 Class D units of the Partnership outstanding as of September 30, 2026, and 39,133,716 Class B units, 931,103 Class C units and 2,810,039 Class D units of the Partnership outstanding as of September 30, 2025, which are exchangeable into Class A common stock under the if-converted method, as the inclusion of such shares would be anti-dilutive. The calculation of diluted earnings per share excludes 78,513 and 80,674 PRSUs outstanding as of September 30, 2026 and 2025, respectively, as the related performance targets were not met as of those dates.
As the Company was in a net loss position for the three and six months ended September 30, 2026, the calculation of diluted earnings per share excludes potential shares of Class A common stock for 1,382,964
As the Company was in a net loss position for the three and six months ended September 30, 2025, the calculation of diluted earnings per share excludes potential shares of Class A common stock for 1,067,493
46
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
12. Related Party Transactions
The Company considers its directors, greater than 5 % beneficial owner of any class of the Company’s stock, senior executives, employees and equity method investments to be related parties. A substantial portion of the Company’s management and advisory fees and carried interest allocations is earned from various StepStone Funds. The Company earned net management and advisory fees from the StepStone Funds of $255.8 million and $156.3 million for the three months ended September 30, 2026 and 2025, respectively, and $487.6 million and $307.9 million for the six months ended September 30, 2026 and 2025, respectively. The Company earned incentive fees from the StepStone Funds of $1.0 no 362.5 million and $206.7 million for the three months ended September 30, 2026 and 2025, respectively, and $435.1 million and $320.0 million for the six months ended September 30, 2026 and 2025, respectively. Legacy Greenspring carried interest allocation revenues earned from certain legacy Greenspring funds for which the Company has no direct economic interests totaled $115.0 million and $27.1 million for the three months ended September 30, 2026 and 2025, respectively, and $152.2 million and $66.8 million for the six months ended September 30, 2026 and 2025, respectively.
Due from affiliates in the condensed consolidated balance sheets consists primarily of fees and accounts receivable from the StepStone Funds, advances made on behalf of the StepStone Funds for the payment of certain organization and operating costs and expenses for which the Company is subsequently reimbursed, amounts due from employees and loans due from affiliated entities, as set forth below.
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Amounts receivable from StepStone Funds | $ | $ | |||||||||
| Amounts receivable from employees | |||||||||||
| Amounts receivable from loans | |||||||||||
| Total due from affiliates | $ | $ | |||||||||
Due to affiliates in the condensed consolidated balance sheets consists primarily of amounts payable to certain non-controlling interest holders in connection with the Tax Receivable Agreements and amounts payable to the StepStone Funds, as set forth below.
| As of | |||||||||||
| September 30, 2026 | March 31, 2026 | ||||||||||
| Amounts payable to non-controlling interest holders in connection with Tax Receivable Agreements | $ | $ | |||||||||
| Amounts payable to StepStone Funds | |||||||||||
| Total due to affiliates | $ | $ | |||||||||
The Company made no 16.2 million and $11.5 million for the six months ended September 30, 2026 and 2025, respectively, under the Tax Receivable Agreements.
47
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
13. Stockholders’ Equity and Redeemable Non-Controlling Interests
Stockholders’ Equity
The Company has two classes of common stock outstanding, Class A common stock and Class B common stock. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval. Holders of Class A common stock are entitled to receive dividends when and if declared by the board of directors. Holders of the Class B common stock are not entitled to dividends in respect of their shares of Class B common stock.
The Class C and Class D (further described below) limited partnership interests of the Partnership have substantially the same rights and obligations as are applicable to the existing holders of Class B units of the Partnership. The Company has no ownership interest in the Class C and Class D units, which are held by certain employees of the Company. The Company has entered into agreements with the Class C limited partners of the Partnership (the “Class C Exchange Agreement”) and Class D limited partners of the Partnership (the “Class D Exchange Agreement”) to allow for the exchange of Class C units and Class D units, respectively, to shares of Class A common stock of the Company on a one -for-one basis, subject to certain restrictions, as further described below in respect of the Class D Exchange Agreement.
The following table shows a rollforward of the Company’s shares of common stock outstanding since March 31, 2026:
| Class A Common Stock | Class B Common Stock | ||||||||||
| March 31, 2026 | |||||||||||
| Class A common stock issued in exchange for Class B Partnership units | ( | ||||||||||
| Class A common stock issued in exchange for Class C Partnership units | — | ||||||||||
| Class A common stock issued in exchange for Class D Partnership units | — | ||||||||||
| Class A common stock issued for vesting of equity-based awards, net of shares withheld for taxes | — | ||||||||||
| Class A common stock issued for purchase of asset class non-controlling interests | — | ||||||||||
| Class A common stock issued under ESPP | — | ||||||||||
| Class A common stock repurchased and retired | ( | — | |||||||||
| September 30, 2026 | |||||||||||
The Company has 25,000,000 authorized shares of preferred stock, par value of $0.001 per share, and as of September 30, 2026, no
48
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
In June 2026, the Company issued 250,000 shares of Class A common stock to certain limited partners of the Partnership in exchange for 250,000 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to an agreement with the Class B limited partners (the “Class B Exchange Agreement”). A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 50,000 shares of Class A common stock to certain limited partners of the Partnership in exchange for 50,000 Class C units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class C Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 831,428 shares of Class A common stock to certain limited partners of the Partnership in exchange for 831,428 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company.
In September 2026, the Company issued 61,016 shares of Class A common stock to certain limited partners of the Partnership in exchange for 61,016 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class B Exchange Agreement to allow for exchange of Class B units of the Partnership to shares of Class A common stock of the Company on a one -for-one basis, subject to certain restrictions. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 58,050 shares of Class A common stock to certain limited partners of the Partnership in exchange for 58,050 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company.
Stock Repurchase Program
On March 9, 2026, the Company’s board of directors authorized a stock repurchase program of up to $100.0 million of the Company’s Class A common stock, excluding fees and expenses. Under the stock repurchase program, repurchases may be made from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act. The stock repurchase program may be modified, suspended or discontinued by the board of directors at any time without prior notice and does not have a specified expiration date. Each share of Class A common stock repurchased is funded with the proceeds, on a dollar-for-dollar basis, from the repurchase of Class A units by the Partnership from the Company in order to maintain the one -to-one ratio between outstanding shares of Class A common stock and Class A units.
The following table presents information about Class A common stock repurchased on the open market:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (in thousands, except share and per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Shares of Class A common stock repurchased | |||||||||||||||||||||||
| Average price paid per share | $ | $ | $ | $ | |||||||||||||||||||
| Total cost | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026, the amount remaining available for repurchases was $70.0 million.
49
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Purchase of Asset Class Non-Controlling Interests
On February 7, 2024, SSG and the Partnership entered into agreements (the “Transaction Agreements”) with each of SRA, SRE and SPD (the “Asset Class Entities”), their respective asset class heads as seller representatives, the seller parties signatory thereto, and certain other parties. The Transaction Agreements provide a path to the Partnership owning all of the outstanding equity interests of the Asset Class Entities over a defined period of time.
The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) Class D units, in the case of SRA and SRE, or shares of the Company’s Class A common stock, in the case of SPD and (ii) cash (at the discretion of the Company for all exchanges except the initial exchange), in up to ten annual exchanges (increased to up to fifteen annual exchanges in certain circumstances in case of the sellers of SRA equity interests).
The portion of the equity interests expected to be acquired in each annual exchange is set forth in an exchange schedule attached to each Transaction Agreement and is approximately 5 % of each Asset Class Entity on each contemplated annual exchange date. The amount of consideration to be delivered is calculated using exchange ratios annually derived from a formula that establishes an assumed value of each Asset Class Entity based on its estimated adjusted net income, relative to an adjusted trading multiple for the Company’s Class A common stock with respect to the Company’s estimated adjusted net income. The Transaction Agreement specifies a minimum adjusted trading multiple for the exchange to take place. If this threshold is not met for a particular year, the exchange for that year may be skipped and combined with a future exchange in a subsequent year, provided the minimum adjusted trading multiple is met at that time.
On April 1, 2024, certain of the Company’s subsidiaries underwent transactions to effect unitization of the outstanding classes of limited partnership interests. The economic rights and obligations of limited partnership interest holders were the same immediately prior to the unitization as immediately after the unitization. The outstanding classes of limited partnership interests, including the class of interests relating to awards of carried interest allocations granted to employees, were essentially combined into a single class of limited partnership interest and redesignated into units. The class of interests relating to awards of carried interest allocations granted to employees were previously accounted for as compensation arrangements under ASC 710, Compensation, and presented as carried interest-related compensation expense. The transaction was considered to be a transaction amongst equity holders, and the Company did not recognize any incremental compensation cost related to settlement of the accrued carried interest-related compensation.
Also on April 1, 2024, the Company exchanged certain ordinary shares in the SPD subsidiary and paid $5.4 million to purchase certain preferred shares in SPD with liquidation preference rights in connection with the Transaction Agreements. There was no change in the Company’s economic interest in SPD as a result of the transaction.
In connection with the transactions contemplated by the SRA Transaction Agreement and SRE Transaction Agreement, SSG and the Partnership entered into a Class D Exchange Agreement at the closing of the 2024 Exchange on May 31, 2024. The Class D Exchange Agreement provides, among other things, sellers under the SRA Transaction Agreement and SRE Transaction Agreement with the ability, in certain circumstances and subject to certain conditions, to exchange the Class D units issued to them on a one -for-one basis with shares of the Company’s Class A common stock, par value $0.001 . In addition, the Class D Exchange Agreement restricts the exchange of the Class D units issued to such sellers, which restriction applies for a maximum of one year (or two years if a Transaction Agreement Exchange (as defined in the Class D Exchange Agreement) constitutes an Acceleration Exchange (as defined in the Class D Exchange Agreement)), subject to certain exceptions.
50
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
On May 29, 2026, the Company completed the third annual exchange (the “2026 Exchange”) to acquire approximately 5 % of the equity interests of each of SRA, SRE and SPD pursuant to the Transaction Agreements. As a result of the 2026 Exchange, the Partnership now owns approximately 65 % of the outstanding equity interests of SRA, 65 % of the outstanding equity interests of SRE and 65 % of the outstanding equity interests of SPD. The aggregate consideration paid by the Company in the 2026 Exchange was approximately (i) $10 million in cash, (ii) 972,685 shares of the Company’s Class A common stock and (iii) 2,438,273 Class D units of the Partnership.
The Company accounts for adjustments to the redemption value of a redeemable equity instrument that is currently redeemable by adjusting the carrying value of the equity instrument to the maximum redemption value at each reporting period based on conditions that exist as of the reporting date. If the redeemable equity instrument is probable of becoming redeemable in the near future, the carrying value of a redeemable equity instrument is adjusted to the redemption value immediately as changes occur based on conditions that exist at that date or at each reporting date. For redeemable equity instruments either not redeemable or probable of becoming redeemable in the near future, no adjustment to the carrying value is made until it is probable that the equity instrument will become redeemable. The Company recognizes adjustments to the carrying value of redeemable equity instruments with charges against retained earnings, or to additional paid-in-capital in the absence of retained earnings.
As of September 30, 2026, the Company determined that redemption of the redeemable non-controlling interests in subsidiaries was probable and presented the carrying value at the redemption amount based on the conditions that existed as of that date of $10.2 million in the condensed consolidated balance sheets within redeemable non-controlling interests in subsidiaries.
The reallocation adjustment between SSG stockholders’ equity, non-controlling interests in the Partnership and non-controlling interests in subsidiaries relates to the impact of changes in economic ownership percentages during the period and adjusting previously recorded equity transactions to the economic ownership percentage as of the end of each reporting period.
Dividends and Distributions
Dividends and distributions are reflected in the condensed consolidated statements of stockholders’ equity when declared by the board of directors. Dividends are made to Class A common stockholders and distributions are made to limited partners of the Partnership and holders of non-controlling interests in subsidiaries.
On August 6, 2026, the Company announced a quarterly cash dividend of $0.33 per share of Class A common stock, which was paid on September 15, 2026 to holders of record as of the close of business on August 31, 2026.
Redeemable Non-Controlling Interests
The following table summarizes the activities associated with the redeemable non-controlling interests in Consolidated Funds:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Contributions | |||||||||||||||||||||||
| Redemption of redeemable non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
51
StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
The following table summarizes the activities associated with the redeemable non-controlling interests in subsidiaries:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
14. Commitments and Contingencies
Litigation
In the ordinary course of business, and from time to time, the Company may be subject to various legal, regulatory and/or administrative proceedings. The Company accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such proceedings, based on information known by management, the Company does not expect a potential liability related to any current legal proceedings or claims that would individually or in the aggregate materially affect its condensed consolidated financial statements as of September 30, 2026.
Lease Commitments
The Company leases offices in 31 cities in North America, South America, Europe, Middle East, Asia and Australia, and certain equipment subject to operating lease agreements expiring through 2043, some of which may include options to extend or terminate the lease. As of September 30, 2026, there were no finance leases outstanding.
In May 2025, the Company executed an agreement to lease an additional floor for its New York office. During the three months ended September 30, 2026, the Company gained access to the office space and established a ROU asset and corresponding lease liability of $32.7 million. Total future lease payments under the lease are expected to be $59.7 million over 15 years.
The components of lease expense included in general, administrative and other expenses in the condensed consolidated statements of loss were as follows:
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Operating lease cost(1) | $ | $ | $ | $ | |||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | |||||||||||||||||||
(1)Operating lease cost includes an immaterial amount of short-term leases.
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StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Supplemental cash flow information related to leases was as follows:
| Six Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows used for operating leases | $ | $ | |||||||||
| Weighted-average remaining lease term for operating leases (in years) | |||||||||||
| Weighted-average discount rate for operating leases | % | % | |||||||||
As of September 30, 2026, maturities of operating lease liabilities were as follows:
| Remainder of FY2027 | $ | ||||
| FY2028 | |||||
| FY2029 | |||||
| FY2030 | |||||
| FY2031 | |||||
| Thereafter | |||||
| Total lease liabilities | |||||
| Less: Imputed interest | ( | ||||
| Total operating lease liabilities | $ | ||||
Unfunded Capital Commitments
As of September 30, 2026 and March 31, 2026, the Company, generally in its capacity as general partner or managing member of the StepStone Funds, had unfunded commitments totaling $128.2 million and $110.0 million, respectively. The $128.2 million and $110.0 million of unfunded commitments as of September 30, 2026 and March 31, 2026, respectively, exclude $27.8 million and $28.3 million, respectively, related to commitments held by general partner entities for certain funds in which the Company does not hold any direct economic interests, including the legacy Greenspring funds. As of September 30, 2026 and March 31, 2026, the Consolidated Funds had unfunded capital commitments to funds of $453.7 million and $2,401.1 million, respectively. This excludes commitments to other Consolidated Funds that are eliminated in consolidation.
Carried Interest Allocations
Carried interest allocations are subject to reversal in the event of future losses, to the extent of the cumulative revenues recognized by the Company in income to date. Additionally, if the Company has received net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company may be obligated to repay previously distributed carried interest that exceeds the amounts to which the Company is ultimately entitled. In these situations, a liability is accrued for the potential clawback obligation if amounts previously distributed to the Company would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life. As of September 30, 2026 and March 31, 2026, no material amounts for potential clawback obligations had been accrued. This contingent obligation is normally reduced by income taxes that the Company has paid related to the carried interest allocations. As of September 30, 2026, the maximum amount of carried interest allocations (excluding legacy Greenspring carried interest allocations) attributable to the Company subject to contingent repayment was an estimated $483.1 million, net of tax, assuming the fair value of all investments was zero, a possibility that the Company views as remote.
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StepStone Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(in thousands, except share and per share amounts and where noted)
Indemnification Arrangements
In the normal course of business and consistent with standard business practices, the Company has provided general indemnifications to its limited partners, officers and directors when they act in good faith in the performance of their duties for the Company. The terms of these indemnities vary from contract to contract. The Company’s maximum exposure under these arrangements cannot be determined as these indemnities relate to future claims that may be made against the Company or related parties, but which have not yet occurred. No liability related to these indemnities has been recorded in the condensed consolidated balance sheets as of September 30, 2026 and March 31, 2026. Based on past experience, management believes that the risk of loss related to these indemnities is remote.
15. Segment Reporting
The Company operates as one
The Company’s single reportable segment earns substantially all its revenue from management, advisory, and performance fees. The CODM manages the Company on a consolidated basis and utilizes GAAP net income (loss) as presented in the condensed consolidated statements of income (loss) as the primary financial measure used to assess the performance of and allocate resources to the business. The CODM regularly reviews the GAAP condensed consolidated statements of income (loss) including the revenue, expense and other captions as presented in the Company’s periodic filings. There are no other significant expenses or specified revenue and expense categories reviewed by the CODM other than as reflected in the condensed consolidated statements of income (loss). The CODM reviews segment assets at the consolidated level within the condensed consolidated balance sheets, as there is no difference between segment assets and total consolidated assets. As the Company operates as a single segment, the accounting policies utilized by the segment are consistent with those included in the condensed consolidated financial statements here within.
16. Subsequent Events
On November 5, 2026, the Company announced a quarterly cash dividend of $0.33 per share of Class A common stock, payable on December 15, 2026 to holders of record as of the close of business on November 30, 2026.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes included within this quarterly report on Form 10-Q and our audited financial statements, the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the fiscal year ended March 31, 2026 filed with the SEC. In this quarterly report, references to “we,” “us,” “our,” “StepStone” and similar terms refer to SSG and its consolidated subsidiaries, including the Partnership.
Business Overview
We are a global private markets investment firm focused on providing customized investment solutions and advisory and data services to our clients. Our 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. We partner with our 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. These portfolios utilize several types of synergistic investment strategies with third-party fund managers, including commitments to funds (“primaries”), acquiring stakes in existing funds on the secondary market (“secondaries”) and investing directly into companies (“co-investments”). As of September 30, 2026, we were responsible for approximately $958 billion of total capital, including $261 billion of AUM and $697 billion of AUA.
We are a global firm and believe that our multi-asset class expertise, local knowledge, business relationships, proprietary data and technology, and presence are all critical to securing a competitive edge in the private markets. We deploy a local staffing model, operating from 31 cities across 19 countries on five continents. Our offices are staffed by investment professionals who bring valuable regional insights and language proficiency to enhance existing client relationships and build new client relationships. Since our inception in 2007, we have invested and continue to invest heavily in our platforms to drive growth and expand our investment solutions capabilities and service offerings, including through opportunistic transactions that have helped accelerate the growth of our team and capabilities. As of September 30, 2026, we had over 1,400 total employees, including over 440 investment professionals and over 960 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.
We have a flexible business model whereby many of our clients engage us for solutions across multiple asset classes and investment strategies. Our solutions are typically offered in the following commercial structures:
•Separately managed accounts (“SMAs”). Owned by one client and managed according to their specific preferences, SMAs integrate a combination of primaries, secondaries and co-investments across one or more asset classes. SMAs are meant to address clients’ specific portfolio objectives with respect to return, risk tolerance, diversification and liquidity. SMAs, including directly managed assets, comprised $148 billion of our AUM as of September 30, 2026.
•Focused commingled funds. Owned by multiple clients, our focused commingled funds deploy capital in specific asset classes with defined investment strategies. Focused commingled funds comprised $96 billion of our AUM as of September 30, 2026.
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•Advisory and data services. These services include one or more of the following for our clients: (i) recurring support of portfolio construction and design; (ii) discrete or project-based due diligence, advice and investment recommendations; (iii) detailed review of existing private markets investments, including portfolio-level repositioning recommendations where appropriate; (iv) consulting on investment pacing, policies, strategic plans, and asset allocation to investment boards and committees; and (v) licensed access to our proprietary data and technology platforms, including StepStone Private Markets Intelligence (“SPI”) Research and our other proprietary tools. Advisory relationships comprised $697 billion of our AUA and $16 billion of our AUM as of September 30, 2026.
•Portfolio analytics and reporting. We provide clients with tailored reporting packages, including customized performance benchmarks as well as associated compliance, administrative and tax capabilities. Mandates for portfolio analytics and reporting services typically include licensed access to our proprietary performance monitoring software, SPI Reporting. We provided portfolio analytics and reporting on over $964 billion of client commitments through SPI Reporting as of September 30, 2026.
We generate revenues from management and advisory fees and performance fees earned pursuant to contractual arrangements with the StepStone Funds and our clients. We also invest our own capital in the StepStone Funds we manage to align our interests with those of our clients. Through these investments, we earn a pro-rata share of the results of such funds and may also be entitled to an allocation of performance-based fees from the limited partners in the StepStone Funds, commonly referred to as carried interest.
Trends Affecting Our Business
Our business is affected by a variety of factors, including conditions in the financial markets, regulatory environment, and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of the StepStone Funds’ holdings, our ability to source attractive investments and completely utilize the capital that we have raised, and result in increased compliance costs and administrative burdens. However, we believe our disciplined investment philosophy across our diversified investment strategies has historically contributed to the stability of our performance throughout market cycles. Furthermore, we operate at scale across all four private markets asset classes and service clients across a broad range of geography, type, and size, which contributes to our operating resilience and mitigates against concentration risk.
In addition to these macroeconomic trends and market factors, we believe our future performance will be influenced by the following factors:
•The extent to which clients favor private markets investments. Our ability to attract new capital is partially dependent on clients’ views of private markets relative to traditional asset classes. We believe our fundraising efforts will continue to be subject to certain fundamental asset management trends, including (1) the increasing importance and market share of private markets investment strategies to clients of all types as clients focus on lower-correlated and absolute levels of return, (2) the increasing demand for private markets investments from private wealth clients, (3) shifting asset allocation policies of institutional clients and (4) increasing barriers to entry and growth for potential competitors.
•Our ability to generate strong, stable returns. Our ability to raise and retain capital is partially dependent on the investment returns we are able to generate for our clients and drives growth in our fee-earning AUM (“FEAUM”) and management fees. Although our FEAUM and management fees have grown significantly since our inception, adverse market conditions or an outflow of capital in the private markets management industry in general could affect our future growth rate. In addition, market dislocations, contractions or volatility could put pressure on our returns in the future which could in turn affect our fundraising abilities.
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•Our ability to maintain our data advantage relative to competitors. Our proprietary data and technology platforms, analytical tools and deep industry knowledge allow us to provide our clients with customized investment solutions, including asset management services and tailored reporting packages, such as customized performance benchmarks as well as compliance, administration and tax capabilities. Our ability to maintain our data advantage is dependent on a number of factors, including our continued access to a broad set of private market information and our ability to grow our relationships with fund managers and clients of all types.
•Our ability to source investments with attractive risk-adjusted returns. The continued growth in our revenues is dependent on our ability to identify attractive investments and deploy the capital that we have raised. However, the capital deployed in any one quarter may vary significantly from period to period due to the availability of attractive opportunities and the long-term nature of our investment strategies. Our ability to identify attractive investments is dependent on a number of factors, including the general macroeconomic environment, valuation, transaction size, and the liquidity of an investment opportunity. A significant decrease in the quality or quantity of potential opportunities could significantly and adversely affect our ability to source investments with attractive risk-adjusted returns.
•Increased competition and clients’ desire to work with fewer managers. There has been an increasing desire on the part of larger institutional investors to build deeper relationships with fewer private markets managers. At times, this has led to certain funds being oversubscribed due to the increasing flow of capital. Our ability to invest and maintain our relationships with high-performing fund managers across private markets asset classes is critical to our clients’ success and our ability to maintain our competitive position and grow our revenue.
Current Events
In 2026, financial markets have continued to experience significant volatility and uncertainty driven by, among other factors, U.S. trade policy developments, elevated inflation, elevated interest rates and interest rate uncertainty, fluctuations in foreign currency exchange rates, and geopolitical developments, including the ongoing Russia-Ukraine conflict and developments in the Middle East. Although inflation remains above the Federal Reserve's long-term target, global growth has moderated, and interest rates remain elevated, U.S. unemployment has remained relatively low and the U.S. economy has continued to expand in 2026.
We are continuing to closely monitor developments related to inflation, elevated interest rates, trade, regulatory and other governmental policy, fluctuations in foreign currency exchange rates, banking system and credit market volatility, geopolitical tension, unrest or conflicts, including in or with China, Russia, Ukraine, Europe and the Middle East, and assess the impact on financial markets and on our business. Our results and the overall industry results have been, and may continue to be, adversely affected by slower, uneven or more challenging fundraising activity and capital deployment, which have resulted in, and may continue to result in, delayed or decreased management fees. Further, fund managers have been unable or less able to exit existing investments profitably. Such conditions have resulted in, and may continue to result in, delayed or decreased performance fee revenues. It is currently not possible to predict the ultimate effects of these events on the financial markets, the overall economy and our condensed consolidated financial statements. See “Risk Factors—Risks Related to Our Industry—Difficult or volatile market and political conditions can adversely affect our business by reducing the market value of the assets we manage, causing our clients to reduce their investments in private markets, reducing the number of high-quality investment managers with whom we may invest, and reducing the ability of our funds to raise or deploy capital” and “Risk Factors—Banking system volatility may adversely affect the results and financial condition of the StepStone Funds or StepStone generally” included in our annual report on Form 10-K for the fiscal year ended March 31, 2026.
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Corporate Transactions
Purchase of Asset Class Non-Controlling Interests
On February 7, 2024, we entered into agreements (the “Transaction Agreements”) with each of SRA, SRE and SPD (the “Asset Class Entities”), their respective asset class heads as seller representatives, the seller parties signatory thereto, and certain other parties. The Transaction Agreements provide a path to the Partnership owning all of the outstanding equity interests of the Asset Class Entities over a defined period of time.
The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) Class D units of the Partnership, in the case of SRA and SRE, or shares of Class A common stock of SSG, in the case of SPD, and (ii) cash (at our discretion for all exchanges except the initial exchange), in up to ten annual exchanges (or up to fifteen annual exchanges in certain circumstances in the case of the sellers of SRA equity interests). Each Transaction Agreement also provides that beginning after the fifth annual exchange, future exchanges may be accelerated into one final exchange in certain circumstances.
The portion of the equity interests expected to be acquired in each annual exchange is set forth in an exchange schedule attached to each Transaction Agreement and is approximately 5% of each Asset Class Entity on each contemplated annual exchange date. The amount of consideration to be delivered is calculated using exchange ratios annually derived from a formula that establishes an assumed value of each Asset Class Entity based on its estimated adjusted net income, relative to an adjusted trading multiple for our Class A common stock with respect to our estimated adjusted net income. The Transaction Agreement specifies a minimum adjusted trading multiple for the exchange to take place. If this threshold is not met for a particular year, which is a possibility for the 2027 exchange if the current adjusted trading multiple for the Company’s Class A common stock remains at current levels, the exchange for that year may be skipped and combined with a future exchange in a subsequent year, provided the minimum adjusted trading multiple is met at that time.
In connection with the transactions contemplated by the SRA Transaction Agreement and SRE Transaction Agreement, we entered into a Class D Exchange Agreement (the “Class D Exchange Agreement”) at the closing of the 2024 Exchange on May 31, 2024. The Class D Exchange Agreement provides, among other things, sellers under the SRA Transaction Agreement and SRE Transaction Agreement with the ability, in certain circumstances and subject to certain conditions, to exchange the Class D units issued to them in connection with the SRA Transaction Agreement and SRE Transaction Agreement on a one-for-one basis with shares of Class A common stock, par value $0.001. In addition, the Class D Exchange Agreement restricts the exchange of the Class D units issued to such sellers, which restriction applies for a maximum of one year (or two years if a Transaction Agreement Exchange (as defined in the Class D Exchange Agreement) constitutes an Acceleration Exchange (as defined in the Class D Exchange Agreement)), subject to certain exceptions.
On May 29, 2026, we completed the third annual exchange (the “2026 Exchange”) to acquire approximately 5% of the equity interests of each of SRA, SRE and SPD pursuant to the Transaction Agreements dated as of February 7, 2024. As a result of the 2026 Exchange, the Partnership now owns approximately 65% of the outstanding equity interests of SRA, 65% of the outstanding equity interests of SRE and 65% of the outstanding equity interests of SPD. The aggregate consideration paid by us in the 2026 Exchange was approximately (i) $10 million in cash, (ii) 972,685 shares of Class A common stock and (iii) 2,438,273 Class D units of the Partnership.
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Equity Transactions
In June 2026, we issued 250,000 shares of Class A common stock to certain limited partners of the Partnership in exchange for 250,000 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to an agreement with the Class B limited partners (the “Class B Exchange Agreement”) to allow for exchange of Class B units of the Partnership to shares of our Class A common stock on a one-for-one basis, subject to certain restrictions. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us. We also issued 50,000 shares of Class A common stock to certain limited partners of the Partnership in exchange for 50,000 Class C units of the Partnership in accordance with the elective exchange notices submitted pursuant to an agreement with the Class C limited partners (the “Class C Exchange Agreement”) to allow for exchange of Class C units of the Partnership to shares of our Class A common stock on a one-for-one basis, subject to certain restrictions. A corresponding number of Class A units of the Partnership were issued to us. We also issued 831,428 shares of Class A common stock to certain limited partners of the Partnership in exchange for 831,428 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to us.
In September 2026, we issued 61,016 shares of Class A common stock to certain limited partners of the Partnership in exchange for 61,016 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class B Exchange Agreement. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us. We also issued 58,050 shares of Class A common stock to certain limited partners of the Partnership in exchange for 58,050 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to us.
Organizational Structure
SSG is a holding company and its only business is to act as the managing member of the General Partner, and its only material assets are Class A units in the Partnership and 100% of the interests in the General Partner. In its capacity as the sole managing member of the General Partner, SSG indirectly operates and controls all of the Partnership’s business and affairs. Therefore, we consolidate the financial results of the Partnership and report non-controlling interests (“NCI”) related to the Class B units, Class C units and Class D units held by partners of the Partnership in our consolidated financial statements.
Pursuant to the StepStone Limited Partnership Agreement, the Class B Exchange Agreement, the Class C Exchange Agreement and the Class D Exchange Agreement that SSG and the Partnership entered into with partners holding Class B units, Class C units and Class D units of the Partnership, respectively, each Class B unit, Class C unit or Class D unit is exchangeable for one share of SSG’s Class A common stock or, at SSG’s election, for cash, subject to certain restrictions specified in the relevant exchange agreement. When a Class B unit, Class C unit or Class D unit is surrendered for exchange, it will not be available for reissuance. When a Class B unit is exchanged for a share of SSG’s Class A common stock, a corresponding share of SSG’s Class B common stock will automatically be redeemed by SSG at par value and canceled. There are no corresponding shares of common stock for the Class C and Class D units.
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The diagram below illustrates our organizational structure as of September 30, 2026.
Amounts may not sum to 100% due to rounding.
(1)The partners of the Partnership other than StepStone Group Inc. are:
•the General Partner, which holds a 100% general partner interest and no economic interests;
•certain members of management, employee and former employee owners and outside investors, all of whom own Class B units and an equivalent number of shares of Class B common stock;
•certain employee and former employee owners who own Class C units; and
•certain employee owners who own Class D units.
(2)Each share of Class A common stock is entitled to one vote and votes together with the Class B common stock as a single class, except as set forth in SSG’s restated certificate of incorporation or as required by law.
(3)Each share of Class B common stock is entitled to one vote and votes together with the Class A common stock as a single class, except as set forth in SSG’s restated certificate of incorporation or as required by law. The economic rights of our Class B common stock are limited to the right to be redeemed at par value.
Prior to September 18, 2025, holders of our Class B common stock controlled a majority of the voting power of our outstanding common stock because (i) each share of our Class B common stock entitled its holder to five votes on all matters to be voted on by stockholders generally, until the earliest to occur of certain ownership changes or September 18, 2025 as set forth in our then current Amended and Restated Certificate of Incorporation (the “Sunset”) and (ii) under our Amended and Restated Stockholders Agreement, dated as of September 20, 2021 (the “Stockholders Agreement”), certain Class A stockholders, Class B stockholders and Class C unitholders in the Partnership agreed to vote all of their shares of voting stock together with and as directed by the Class B Committee (as defined in the Stockholders Agreement). As a result, prior to September 18, 2025, we qualified as a “controlled company” within the meaning of the corporate governance rules of The Nasdaq Stock Market LLC (“Nasdaq”). Under these rules, a listed company of which more than 50% of the voting power with respect to the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. Consistent with this, until the occurrence of the Sunset, we elected not to comply with certain corporate governance requirements, including the requirements that (i) a majority of our board of directors consist of independent directors, (ii) director nominees be selected or recommended to the board entirely by independent directors and (iii) the compensation committee be composed entirely of independent directors.
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However, since the occurrence of the Sunset and expiration of the Stockholders Agreement on September 18, 2025, each share of Class A common stock and Class B common stock is entitled to one vote, and we no longer qualify as a “controlled company” within the meaning of the Nasdaq rules. As a result, we were required to come into compliance with Nasdaq's corporate governance requirements applicable to non-controlled companies, including as described above, by September 18, 2026, the end of the permitted “phase-in” period following loss of controlled company status under the Nasdaq rules. Effective as of July 14, 2026, the composition of each of the compensation committee and the nominating and corporate governance committee of our board of directors transitioned to comply with the applicable Nasdaq rules, and, as of and since such date, each of these committees has been composed entirely of independent directors. At our 2026 Annual Meeting of Stockholders held on September 8, 2026 (the “Annual Meeting”), our stockholders elected seven directors, four of whom our board of directors has determined to be independent under the Nasdaq rules, and, following the Annual Meeting, the size of our board of directors was reduced to seven directors. Accordingly, as of the date of the Annual Meeting, our board of directors has been composed of a majority of independent directors, and we comply with the Nasdaq corporate governance requirements applicable to non-controlled companies.
Key Financial Measures
Our key financial measures are discussed below. Additional information regarding our significant accounting policies can be found in note 2 to our condensed consolidated financial statements included elsewhere in this quarterly report.
Revenues
We generate revenues primarily from management and advisory fees, incentive fees and allocations of carried interest.
Management and Advisory Fees, Net
Management and advisory fees, net, consist of fees received from managing SMAs and focused commingled funds, advisory and data services, and portfolio analytics and reporting. Management fees include income-based incentive fees, which are predictable and recurring in nature and paid quarterly based on net investment income of certain funds.
•Management fees from SMAs are generally based on a contractual rate applied to committed capital or net invested capital. These fees will vary over the life of the contract due to changes in the fee basis or contractual rate changes or thresholds, built-in declines in applicable contractual rates, and/or changes in net invested capital balances. The weighted-average management fee rate from SMAs was approximately 0.37% and 0.38% of average FEAUM for the twelve months ended September 30, 2026 and 2025, respectively.
•Management fees from focused commingled funds are generally based on a specified fee rate applied against client capital commitments during a defined investment or commitment period. Thereafter, management fees are typically calculated based on a contractual rate applied against net invested capital, or a stepped-down fee rate applied against the initial commitment. The weighted-average management fee rate from focused commingled funds was approximately 1.05% and 1.00% of average FEAUM for the twelve months ended September 30, 2026 and 2025, respectively, and primarily reflected the timing of new funds and growth in our private wealth funds which earn higher fee rates.
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•The weighted-average management fee rate across SMAs and focused commingled funds was approximately 0.67% and 0.63% of average FEAUM for the twelve months ended September 30, 2026 and 2025, respectively, and primarily reflected the timing of new funds, shifts in mix between SMAs and focused commingled funds and growth in our private wealth funds which earn higher fee rates.
•Fee revenues from advisory, StepStone Portfolio Analytics & Reporting (“SPAR”) and SPI Research are generally annual fixed fees, which vary based on the scope of services we provide. We also provide certain project-based or event-driven advisory services. The fees for these services are negotiated and typically paid upon successful delivery of services or on the execution of the event-driven service. Because advisory fees are negotiated and typically paid upon successful delivery of services or on the execution of the event-driven service, advisory fees do not necessarily correlate with the total size of our AUA.
•Management fees are reflected net of (i) certain professional and administrative services that we arrange to be performed by third parties on behalf of investment funds and (ii) certain distribution and servicing fees paid to third-party financial institutions. In both situations, we are acting as an agent because we do not control the services provided by the third parties before they are transferred to the customer.
Performance Fees
We earn two types of performance fee revenues: incentive fees and carried interest allocations, as described below. As of September 30, 2026, we had over $125 billion of performance fee-eligible capital (excluding certain legacy Greenspring funds) across over 250 programs.
Incentive fees comprise fees earned from certain client investment mandates for which we do not have a general partnership interest in a StepStone Fund. Incentive fees are generally calculated as a percentage of the profits (up to 15%) earned in respect of certain accounts, including certain permanent capital vehicles, for which we are the investment adviser, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are a form of variable consideration and represent contractual fee arrangements in our contracts with our customers. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax.
We recognize incentive fee revenue only when these amounts are realized and no longer subject to significant risk of reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization). However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax-related portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt. Incentive fees received in advance of crystallization that remain subject to clawback are recorded as deferred incentive fee revenue and included in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets.
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Carried interest allocations include the allocation of performance-based fees, commonly referred to as carried interest, to us from limited partners in the StepStone Funds in which we hold an equity interest. We are entitled to a carried interest allocation (typically 5% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These carried interest allocations are subject to the achievement of minimum return levels (typically 5% to 10%), in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the StepStone Funds, including carried interest allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member. Accordingly, carried interest allocations are not deemed to be within the scope of Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.
Legacy Greenspring carried interest allocations include the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest. The legacy Greenspring general partner entities are entitled to a carried interest allocation (typically 5% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. We account for the investment balances in the legacy Greenspring funds, including carried interest allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member. Accordingly, legacy Greenspring carried interest allocations are not deemed to be within the scope of ASC 606. We do not have any direct economic interests in the legacy Greenspring general partner entities and thus are not entitled to any carried interest allocation from the legacy Greenspring funds. All of the carried interest allocations in respect of such legacy Greenspring funds are payable to employees who are considered affiliates to us and are therefore reflected as legacy Greenspring performance fee-related compensation in the condensed consolidated statements of income (loss).
We recognize revenue attributable to carried interest allocations from a StepStone Fund based on the amount that would be due to us pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date. Accordingly, the amount recognized as carried interest allocation revenue reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period. We record the amount of carried interest allocated to us as of each period end as accrued carried interest allocations, which is included as a component of investments in the condensed consolidated balance sheets. Our determination of fair value for investments in the underlying funds includes various valuation techniques. These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted-average cost of capital, exit multiples, or terminal growth rates.
Carried interest is realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the specific hurdle rates, as defined in the applicable governing documents. Carried interest is subject to reversal to the extent that the amount received to date exceeds the amount due to us based on cumulative results. As such, a liability is accrued for the potential clawback obligations if amounts previously distributed to us would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life. As of September 30, 2026 and March 31, 2026, no material amounts for potential clawback obligations had been accrued.
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Expenses
Cash-based compensation primarily includes salaries, bonuses, employee benefits, cash-based incentive awards and employer-related payroll taxes.
Equity-based compensation represents grants of equity related awards or arrangements to certain employees and directors and expense associated with the employee stock purchase plan (“ESPP”).
Performance fee-related compensation represents the portion of carried interest allocation revenue and incentive fees that have been awarded to employees as a form of long-term incentive compensation. Performance fee-related compensation is generally tied to the investment performance of the StepStone Funds. Approximately 50% of carried interest allocation revenue is awarded to employees as part of our long-term incentive compensation plan, fostering alignment of interest with our clients and investors, and retaining key investment professionals. Carried interest-related compensation is accounted for as compensation expense in conjunction with the related carried interest allocation revenue and, until paid, is recorded as a component of accrued carried interest-related compensation in the condensed consolidated balance sheets. Amounts presented as realized indicate the amounts paid or payable to employees based on the receipt of carried interest allocation revenue from realized investment activity. Carried interest-related compensation expense may be subject to reversal to the extent that the related carried interest allocation revenue is reversed. Carried interest-related compensation paid to employees may be subject to clawback on an after-tax basis under certain scenarios. To date, no material amounts of realized carried interest-related compensation have been reversed. Incentive fee-related compensation is accrued as compensation expense when it is probable and estimable that payment will be made. On April 1, 2024, certain of our non-wholly owned subsidiaries underwent transactions to effect unitization of the outstanding limited partnership interests, including the class of interests relating to awards of carried interest allocations granted to employees, to combine into a single class of limited partnership interests and redesignated into units.
Legacy Greenspring performance fee-related compensation represents the legacy Greenspring carried interest allocations which are entirely payable to certain employees. Legacy Greenspring carried interest-related compensation is accounted for as compensation expense in conjunction with the related legacy Greenspring carried interest allocation revenue and, until paid, is recorded as a component of legacy Greenspring accrued carried interest-related compensation in the condensed consolidated balance sheets. Legacy Greenspring carried interest-related compensation expense may be subject to reversal to the extent that the related legacy Greenspring carried interest allocation revenue is reversed. However, none of the legacy Greenspring carried interest allocation revenue is attributable to the Company.
General, administrative and other includes occupancy, travel and related costs, insurance, legal and other professional fees, depreciation, amortization of intangible assets, system-related costs, and other general costs associated with operating our business. General, administrative and other includes costs associated with the Consolidated Funds. Expenses of the Consolidated Funds have no impact on net income or loss attributable to us to the extent such expenses are borne by third-party investors.
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Other Income (Expense)
Investment income (loss) primarily represents our share of earnings (losses) from the investments we make in our SMAs and focused commingled funds. We, either directly or through our subsidiaries, generally have a general partner interest in the StepStone Funds, which invest in primary funds, secondary funds and co-investment funds, or a combination thereof. Investment income will increase or decrease based on the earnings of the StepStone Funds, which are primarily driven by net realized and unrealized gains (losses) on the underlying investments held by the funds. Our co-investment funds invest in underlying portfolio companies and therefore their valuation changes from period to period are more influenced by individual companies than our primary and secondary funds, which have exposures across multiple portfolio companies in underlying private markets funds. Our SMAs and focused commingled funds invest across various industries, strategies and geographies.
Consequently, our general partner investments do not include any significant concentrations in a specific sector or geography outside the United States. Investment income and legacy Greenspring investment income exclude carried interest allocations, which are presented as revenues as described above.
Legacy Greenspring investment income (loss) represents our share of earnings (losses) from the investments we make in certain legacy Greenspring funds through the legacy Greenspring general partner entities. We have no direct economic interests in the legacy Greenspring general partner entities. As a result, all such income is reflected as non-controlling interests in legacy Greenspring entities. Legacy Greenspring investment income will increase or decrease based on the earnings of such legacy Greenspring funds, which are primarily driven by net realized and unrealized gains (losses) on the underlying investments held by the funds.
Investment income (loss) of Consolidated Funds represents gains (losses) from the investments held by the Consolidated Funds.
Interest income consists of income earned on cash and cash equivalents, restricted cash, and amounts associated with the Consolidated Funds.
Interest expense primarily consists of the interest expense on the Revolver and the Notes, the related amortization of deferred financing costs, and amounts associated with the Consolidated Funds.
Other income (loss) includes foreign currency transaction gains and losses, non-operating activities, and amounts associated with the Consolidated Funds.
Income Tax Expense
We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by the Partnership. The Partnership is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by the Partnership flows through to its limited partners, including us, and is generally not subject to U.S. federal or state income tax at the Partnership level. Our non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to local or non-U.S. income taxes. Additionally, certain of our subsidiaries are subject to local jurisdiction income taxes at the entity level, which are reflected within income tax expense in the condensed consolidated statements of income (loss). As a result, the Partnership does not record U.S. federal and state income taxes on income generated by the Partnership or its subsidiaries, except for certain local and foreign income taxes discussed above.
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Non-Controlling Interests
NCI reflects the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us. Non-controlling interests are presented as separate components in our condensed consolidated statements of income (loss) to clearly distinguish between our interests and the economic interests of third parties and employees in those entities. Net income (loss) attributable to SSG, as reported in the condensed consolidated statements of income (loss), is presented net of the portion of net income (loss) attributable to holders of non-controlling interests.
Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees, and the economic interests in certain Consolidated Funds that are not held by us but are held by the third-party investors in the funds. Non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Non-controlling interests in legacy Greenspring entities represent the economic interests in the legacy Greenspring general partner entities. We did not acquire any direct economic interests in the legacy Greenspring general partner entities. As a result, all of the net income (loss) attributable to the legacy Greenspring general partner entities is allocated to non-controlling interests in legacy Greenspring entities.
Non-controlling interests in the Partnership represent the economic interests in the Partnership held by the Class B, Class C and Class D unitholders of the Partnership. Non-controlling interests in the Partnership are allocated a share of income or loss in the Partnership in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Redeemable non-controlling interests in Consolidated Funds represent the economic interests in the redeemable Consolidated Funds which are not held by us, but are held by the third-party investors in the funds. Redeemable non-controlling interests in Consolidated Funds are allocated a share of income or loss in the respective fund in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
Redeemable non-controlling interests in subsidiaries represent the redeemable economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees in those entities that were established in connection with the Transaction Agreements. Redeemable non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.
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.
Assets Under Management
AUM primarily reflects the assets associated with our 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.
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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 September 30, 2026 reflects final data for the prior period (June 30, 2026), adjusted for net new client account activity through September 30, 2026. NAV data for underlying investments is as of June 30, 2026, as reported by underlying managers up to the business day occurring on or after 100 days following June 30, 2026. When NAV data is not available by the business day occurring on or after 100 days following June 30, 2026, such NAVs are adjusted for cash activity following the last available reported NAV.
Assets Under Advisement
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 September 30, 2026 reflects final data for the prior period (June 30, 2026), adjusted for net new client account activity through September 30, 2026. NAV data for underlying investments is as of June 30, 2026, as reported by underlying managers up to the business day occurring on or after 100 days following June 30, 2026. When NAV data is not available by the business day occurring on or after 100 days following June 30, 2026, such NAVs are adjusted for cash activity following the last available reported NAV.
Fee-Earning AUM
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.
Our calculation of FEAUM may differ from the calculations of other asset managers and, as a result, may not be comparable to similar measures presented by other asset managers.
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Undeployed Fee-Earning Capital
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 this capital is 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.
Consolidation of StepStone Funds
The activity of the Consolidated Funds is reflected within the condensed consolidated financial statement line items as indicated by reference thereto. The impact of the Consolidated Funds decreases revenues reported under GAAP to the extent these amounts are eliminated upon consolidation. The assets and liabilities of our Consolidated Funds are held within separate legal entities and, as a result, the liabilities of our Consolidated Funds are typically non-recourse to us. The net economic ownership interests of our Consolidated Funds held by third parties are reflected in our condensed consolidated financial statements as either non-controlling interests in subsidiaries or redeemable non-controlling interests in Consolidated Funds when the equity of the fund is redeemable. We generally deconsolidate funds when we are no longer deemed to have a controlling financial interest in the entity. The performance of our Consolidated Funds is not necessarily consistent with, or representative of, the combined performance trends of all of our funds.
Consolidated Results of Operations
We consolidate funds and entities where we are deemed to hold a controlling financial interest. The Consolidated Funds are not necessarily the same entities in each year presented due to changes in ownership, changes in limited partners’ or investor rights, and the creation and termination of funds and entities. The following is a discussion of our unaudited consolidated results of operations for the periods presented. The information is derived from our accompanying condensed consolidated financial statements prepared in accordance with GAAP.
During the three and six months ended September 30, 2026, we consolidated five and 11 additional StepStone Funds, respectively, as it was determined that we hold a controlling financial interest in these funds.
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| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Management and advisory fees, net | $ | 293,149 | $ | 215,489 | $ | 562,320 | $ | 426,662 | |||||||||||||||
| Performance fees: | |||||||||||||||||||||||
| Incentive fees | 2,495 | 4,902 | 2,495 | 5,092 | |||||||||||||||||||
| Carried interest allocations: | |||||||||||||||||||||||
| Realized | 60,795 | 58,878 | 89,367 | 83,282 | |||||||||||||||||||
| Unrealized | 301,710 | 147,813 | 345,685 | 236,696 | |||||||||||||||||||
| Total carried interest allocations | 362,505 | 206,691 | 435,052 | 319,978 | |||||||||||||||||||
Legacy Greenspring carried interest allocations(1) | 114,995 | 27,143 | 152,166 | 66,780 | |||||||||||||||||||
| Total performance fees | 479,995 | 238,736 | 589,713 | 391,850 | |||||||||||||||||||
| Total revenues | 773,144 | 454,225 | 1,152,033 | 818,512 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Compensation and benefits: | |||||||||||||||||||||||
| Cash-based compensation | 121,402 | 100,348 | 238,636 | 196,333 | |||||||||||||||||||
| Equity-based compensation | 378,816 | 884,470 | 696,093 | 1,073,188 | |||||||||||||||||||
| Performance fee-related compensation: | |||||||||||||||||||||||
| Realized | 32,808 | 30,995 | 46,670 | 42,700 | |||||||||||||||||||
| Unrealized | 211,049 | 88,727 | 255,735 | 133,084 | |||||||||||||||||||
| Total performance fee-related compensation | 243,857 | 119,722 | 302,405 | 175,784 | |||||||||||||||||||
Legacy Greenspring performance fee-related compensation(1) | 114,995 | 27,143 | 152,166 | 66,780 | |||||||||||||||||||
| Total compensation and benefits | 859,070 | 1,131,683 | 1,389,300 | 1,512,085 | |||||||||||||||||||
| General, administrative and other | 58,495 | 45,292 | 111,964 | 88,206 | |||||||||||||||||||
| Total expenses | 917,565 | 1,176,975 | 1,501,264 | 1,600,291 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income (loss) | 21,114 | (1,210) | 31,937 | 9,302 | |||||||||||||||||||
Legacy Greenspring investment income (loss)(1) | 3,172 | 1,313 | (2,075) | 4,695 | |||||||||||||||||||
| Investment income of Consolidated Funds | 210,119 | 46,044 | 212,963 | 67,715 | |||||||||||||||||||
| Interest income | 2,397 | 3,224 | 7,118 | 5,720 | |||||||||||||||||||
| Interest expense | (23,515) | (4,425) | (27,853) | (8,959) | |||||||||||||||||||
| Other income (loss) | (20,838) | 1,978 | (25,081) | 7,130 | |||||||||||||||||||
| Total other income | 192,449 | 46,924 | 197,009 | 85,603 | |||||||||||||||||||
| Income (loss) before income tax | 48,028 | (675,826) | (152,222) | (696,176) | |||||||||||||||||||
| Income tax benefit | (17,388) | (100,336) | (47,272) | (108,675) | |||||||||||||||||||
| Net income (loss) | 65,416 | (575,490) | (104,950) | (587,501) | |||||||||||||||||||
| Less: Net income attributable to non-controlling interests in subsidiaries | 174,263 | 9,242 | 196,994 | 37,859 | |||||||||||||||||||
Less: Net income (loss) attributable to non-controlling interests in legacy Greenspring entities(1) | 3,172 | 1,313 | (2,075) | 4,695 | |||||||||||||||||||
| Less: Net loss attributable to non-controlling interests in the Partnership | (50,416) | (259,946) | (126,550) | (287,068) | |||||||||||||||||||
| Less: Net income attributable to redeemable non-controlling interests in Consolidated Funds | 8,672 | 39,659 | 12,335 | 60,616 | |||||||||||||||||||
| Less: Net income attributable to redeemable non-controlling interests in subsidiaries | 941 | 384 | 1,378 | 963 | |||||||||||||||||||
| Net loss attributable to StepStone Group Inc. | $ | (71,216) | $ | (366,142) | $ | (187,032) | $ | (404,566) | |||||||||||||||
(1)Reflects amounts attributable to consolidated VIEs for which we did not acquire any direct economic interests. See notes 2, 3 and 5 to our condensed consolidated financial statements included elsewhere in this quarterly report.
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Revenues
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Total revenues increased $318.9 million, or 70%, to $773.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The overall increase was driven by higher carried interest allocations, higher legacy Greenspring carried interest allocations, and higher management and advisory fees, net, partially offset by lower incentive fees, in each case, as described below.
Management and advisory fees, net increased $77.7 million, or 36%, to $293.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was driven by new client activity resulting in 20% growth in average FEAUM across the platform and a higher average fee rate driven by a mix shift towards commingled funds. The three months ended September 30, 2026 included retroactive fees of $4.2 million from the closings of StepStone’s Secondaries Infrastructure, private equity co-investments, infrastructure co-investments and private equity secondaries funds. The three months ended September 30, 2025 included retroactive fees of $0.3 million from the closings of StepStone’s Secondaries Infrastructure and VC Micro V funds.
Incentive fees decreased $2.4 million, or 49%, to $2.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, largely due to lower realization activity.
Realized carried interest allocation revenues increased $1.9 million, or 3%, to $60.8 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, reflecting higher realization activity within our infrastructure funds, partially offset by lower realization activity within our private equity funds. Unrealized carried interest allocation revenues include the reversal of realized carried interest allocation revenues. Excluding the reversal of $60.8 million, unrealized carried interest allocation revenues increased $155.8 million, or 75%, to $362.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase in unrealized carried interest allocations for the three months ended September 30, 2026 primarily reflected a higher net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity, infrastructure and real estate funds.
Legacy Greenspring carried interest allocation revenues increased $87.9 million, or 324%, to $115.0 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 as a result of higher net unrealized appreciation in the fair value of certain underlying fund investments in the current year period as compared to the prior year period. The three months ended September 30, 2026 reflect gross realized carried interest allocations of $12.0 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $103.0 million. The three months ended September 30, 2025 reflect gross realized carried interest allocations of $13.3 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $13.8 million.
Six Months Ended September 30, 2026 Compared to Six Months Ended September 30, 2025
Total revenues increased $333.5 million, or 41%, to $1,152.0 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The overall increase was driven by higher management and advisory fees, net, higher carried interest allocations, and higher legacy Greenspring carried interest allocations, partially offset by lower incentive fees, in each case, as described below.
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Management and advisory fees, net increased $135.7 million, or 32%, to $562.3 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The increase was driven by new client activity resulting in 20% growth in average FEAUM across the platform and a higher average fee rate driven by a mix shift towards commingled funds. The six months ended September 30, 2026 included retroactive fees of $3.4 million from the closings of StepStone’s Secondaries Infrastructure, infrastructure co-investments and multi-strategy venture capital funds. The six months ended September 30, 2025 included retroactive fees of $3.1 million from the closings of StepStone’s Real Estate Partners V, Secondaries Infrastructure, and VC Micro V funds.
Incentive fees decreased $2.6 million, or 51%, to $2.5 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, largely due to lower realization activity.
Realized carried interest allocation revenues increased $6.1 million, or 7%, to $89.4 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, reflecting higher realization activity within our private equity and infrastructure funds. Unrealized carried interest allocation revenues include the reversal of realized carried interest allocation revenues. Excluding the reversal of $89.4 million, unrealized carried interest allocation revenues increased $115.1 million, or 36%, to $435.1 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The increase in unrealized carried interest allocations for the six months ended September 30, 2026 primarily reflected a higher net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity and infrastructure funds as well as the cumulative allocation of gains associated with the underlying portfolios within our real estate funds as compared to the cumulative allocation of losses in the prior year period.
Legacy Greenspring carried interest allocation revenues increased $85.4 million, or 128%, to $152.2 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025 as a result of higher net unrealized appreciation in the fair value of certain underlying fund investments in the current year period as compared to the prior year period. The six months ended September 30, 2026 reflect gross realized carried interest allocations of $12.6 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $139.6 million. The six months ended September 30, 2025 reflect gross realized carried interest allocations of $18.2 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $48.6 million.
Expenses
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Total expenses decreased $259.4 million, or 22%, to $917.6 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The overall decrease resulted from a decrease in equity-based compensation partially offset by increases in performance fee-related compensation, legacy Greenspring performance fee-related compensation, cash-based compensation and general, administrative and other expenses, in each case, as described below.
Cash-based compensation increased $21.1 million, or 21%, to $121.4 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, due to 15% higher average headcount, increased compensation levels from merit increases and higher income-based incentive fee compensation in the current year period as compared to the prior year period.
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Equity-based compensation decreased $505.7 million, or 57%, to $378.8 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $507.6 million decrease in expenses for liability classified awards related to the profits interest issued in SPW in the current year period as compared to the prior year period, partially offset by an increase of $1.4 million for the acceleration of restricted stock units (“RSUs”) expense in the current year period with no comparable expense in the prior year period, and a $0.4 million increase for RSUs and performance-based RSUs (“PRSUs”) granted in the current year period with no comparable expense for these grants in the prior year period. Future periods may experience significant fluctuations in equity-based compensation resulting from changes in the fair value of liability classified awards, which is driven by the performance of SPW. SPW generated profitability in fiscal 2026 and in fiscal 2027 to date, and we expect that there will be an increase in the profitability generated by SPW in the future which would increase the fair value of the associated liability for the profits interest issued in SPW. As of September 30, 2026 and March 31, 2026, we had recognized $2,896.7 million and $2,265.8 million, respectively, for liability classified awards within accrued compensation and benefits in the condensed consolidated balance sheets.
Total performance fee-related compensation expense increased $124.1 million, or 104%, to $243.9 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting the increase in carried interest allocation revenues. Realized performance fee-related compensation increased $1.8 million, or 6%, to $32.8 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting higher realization activity.
Legacy Greenspring performance fee-related compensation expense increased $87.9 million, or 324%, to $115.0 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The three months ended September 30, 2026 reflect gross realized performance fee-related compensation expense of $12.0 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $103.0 million. The three months ended September 30, 2025 reflect gross realized performance fee-related compensation expense of $13.3 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $13.8 million.
General, administrative and other expenses increased $13.2 million, or 29%, to $58.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The overall increase primarily reflected $5.7 million in platform fees, $3.8 million in general and administrative expenses for the Consolidated Funds, $2.4 million in occupancy costs, $1.6 million in information and technology expenses and other general operating expenses, partially offset by a decrease of $1.5 million in marketing and conference expenses.
Six Months Ended September 30, 2026 Compared to Six Months Ended September 30, 2025
Total expenses decreased $99.0 million, or 6%, to $1,501.3 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The overall decrease resulted from a decrease in equity-based compensation partially offset by increases in performance fee-related compensation, legacy Greenspring performance fee-related compensation, cash-based compensation and general, administrative and other expenses, in each case, as described below.
Cash-based compensation increased $42.3 million, or 22%, to $238.6 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, due to 16% higher average headcount, increased compensation levels from merit increases and higher income-based incentive fee compensation in the current year period as compared to the prior year period.
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Equity-based compensation decreased $377.1 million, or 35%, to $696.1 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The decrease was primarily attributable to a $381.4 million decrease in expenses for liability classified awards related to the profits interest issued in SPW in the current year period as compared to the prior year period, partially offset by an increase of $2.6 million for the acceleration of RSU expense in the current year period with no comparable expense in the prior year period, and a $1.5 million increase for RSUs and PRSUs granted in the current year period with no comparable expense for these grants in the prior year period.
Total performance fee-related compensation expense increased $126.6 million, or 72%, to $302.4 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting the increase in carried interest allocation revenues. Realized performance fee-related compensation increased $4.0 million, or 9%, to $46.7 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting higher realization activity.
Legacy Greenspring performance fee-related compensation expense increased $85.4 million, or 128%, to $152.2 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The six months ended September 30, 2026 reflect gross realized performance fee-related compensation expense of $12.6 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $139.6 million. The six months ended September 30, 2025 reflect gross realized performance fee-related compensation expense of $18.2 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $48.6 million.
General, administrative and other expenses increased $23.8 million, or 27%, to $112.0 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The overall increase primarily reflected $9.6 million in platform fees, $4.6 million in general and administrative expenses for the Consolidated Funds, $3.8 million in occupancy costs, $3.0 million in information and technology expenses, $1.8 million in travel and associated costs for investment evaluation and client service, $1.4 million in human resources and recruiting expenses, $1.0 million in professional fees and other general operating expenses, partially offset by a decrease of $1.2 million in marketing and conference expenses.
Other Income (Expense)
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Investment income increased $22.3 million to $21.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting overall changes in the valuations of the underlying investments in StepStone Funds.
Legacy Greenspring investment income increased $1.9 million, or 142%, to $3.2 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The three months ended September 30, 2026 reflect unrealized investment income of $3.2 million. There was no realized investment income for the three months ended September 30, 2026. The three months ended September 30, 2025 reflect gross realized investment income of $0.8 million and unrealized investment income, net of the reversal of realized investment income, of $0.5 million.
Investment income of Consolidated Funds increased $164.1 million, or 356%, to $210.1 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds and the impact of consolidation of additional Consolidated Funds during the current year period that were not included in the prior year period.
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Interest income decreased $0.8 million, or 26% to $2.4 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to lower interest income from the Consolidated Funds during the current year period as compared to the prior year period. Interest income attributable to Consolidated Funds was $0.6 million in the current year period as compared to $1.3 million in the prior year period.
Interest expense increased $19.1 million, or 431%, to $23.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was due to the impact of consolidation of additional Consolidated Funds during the current year period that were not included in the prior year period and higher average outstanding balances under the Revolver during the current year period, partially offset by the lower interest rate on the Revolver for the current year period as compared with the prior year period. Interest expense attributable to Consolidated Funds was $19.0 million in the current year period with no comparable expense in the prior year period.
Other income decreased $22.8 million to a loss of $20.8 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting the impact of consolidation of additional Consolidated Funds during the current year period that were not included in the prior year period, net foreign currency transaction losses in the current year period as compared with net foreign currency transaction gains in the prior year period and the inclusion of gains related to adjustments for the Tax Receivable Agreements during the prior year period that were not included in the current year period.
Six Months Ended September 30, 2026 Compared to Six Months Ended September 30, 2025
Investment income increased $22.6 million, or 243%, to $31.9 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting overall changes in the valuations of the underlying investments in StepStone Funds.
Legacy Greenspring investment income decreased $6.8 million to a loss of $2.1 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The six months ended September 30, 2026 reflect gross realized investment income of $0.2 million and unrealized investment loss, net of the reversal of realized investment income, of $2.2 million. The six months ended September 30, 2025 reflected gross realized investment income of $2.5 million and unrealized investment income, net of the reversal of realized investment income, of $2.2 million.
Investment income of Consolidated Funds increased $145.2 million, or 214%, to $213.0 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds as well as changes in the composition of the Consolidated Funds during the current year period as compared with the prior year period, including consolidation of certain new funds and the deconsolidation of certain other funds.
Interest income increased $1.4 million, or 24%, to $7.1 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily due to higher interest income from the Consolidated Funds in the current year period as compared to the prior year period due to the impact of consolidation of additional Consolidated Funds. Interest income attributable to Consolidated Funds was $3.9 million in the current year period as compared to $2.3 million in the prior year period.
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Interest expense increased $18.9 million, or 211%, to $27.9 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The increase was due to the impact of consolidation of additional Consolidated Funds during the current year period that were not included in the prior year period and higher average outstanding balances under the Revolver during the current year period, partially offset by the lower interest rate on the Revolver for the current year period as compared with the prior year period. Interest expense attributable to Consolidated Funds was $19.0 million in the current year period with no comparable expense in the prior year period.
Other income decreased $32.2 million to a loss of $25.1 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting the impact of consolidation of additional Consolidated Funds during the current year period that were not included in the prior year period, net foreign currency transaction losses in the current year period as compared with net foreign currency transaction gains in the prior year period, and the inclusion of gains related to adjustments for the Tax Receivable Agreements during the prior year period that were not included in the current year period.
Income Tax Expense
Income tax expense primarily reflects U.S. federal and state income taxes on our share of taxable income generated by the Partnership, as well as local and foreign income taxes of certain of the Partnership’s subsidiaries.
Our effective income tax rate was (36.2)% and 14.8% for the three months ended September 30, 2026 and 2025, respectively, and 31.1% and 15.6% for the six months ended September 30, 2026 and 2025, respectively. For each period presented, the effective income tax rate differed from the statutory rate primarily because a portion of pre-tax income (loss) is attributable to non-controlling interests, including third-party investors in the Consolidated Funds, and the related tax expense (benefit) is not attributable to us. The change in the effective income tax rate for the three and six months ended September 30, 2026, compared with the prior year periods, was mainly driven by the impact of non-controlling interests related to the consolidation of additional Consolidated Funds. For the three months ended September 30, 2026, we recorded an income tax benefit on pre-tax income, resulting in a negative effective income tax rate. The effective income tax rate may vary from period to period depending on the portion of income that is subject to tax and the impact of non-controlling interests, including non-controlling interests in Consolidated Funds.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Income tax benefit decreased $82.9 million, or 83%, to $17.4 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The decrease in income tax benefit was primarily driven by pre-tax net income for the three months ended September 30, 2026 as compared to a pre-tax net loss for the three months ended September 30, 2025, partially offset by the effect of income attributable to non-controlling interests.
Six Months Ended September 30, 2026 Compared to Six Months Ended September 30, 2025
Income tax benefit decreased $61.4 million, or 57%, to $47.3 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The decrease in income tax benefit was primarily driven by a decrease in pre-tax net loss for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, partially offset by the effect of income attributable to non-controlling interests.
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Net Income Attributable to Non-Controlling Interests in Subsidiaries
Net income attributable to non-controlling interests in subsidiaries increased $165.0 million to $174.3 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily attributable to an increase in income generated by our consolidated subsidiaries not wholly-owned by us, partially offset by an increase in our economic interests in the Asset Class Entities as a result of the Transaction Agreements resulting in a lower rate of allocation of net income to non-controlling interests in subsidiaries.
Net income attributable to non-controlling interests in subsidiaries increased $159.1 million, or 420%, to $197.0 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The increase was primarily attributable to an increase in income generated by our consolidated subsidiaries not wholly-owned by us, partially offset by an increase in our economic interests in the Asset Class Entities as a result of the Transaction Agreements resulting in a lower rate of allocation of net income to non-controlling interests in subsidiaries.
Net Income (Loss) Attributable to Non-Controlling Interests in Legacy Greenspring Entities
Net income (loss) attributable to non-controlling interests in legacy Greenspring entities represents the net income or loss attributable to the interests held by the legacy Greenspring general partner entities. We did not acquire any direct economic interests in the legacy Greenspring general partner entities. As a result, all of the net income or loss related to the legacy Greenspring general partner entities is allocated to non-controlling interests in legacy Greenspring entities. Net income (loss) attributable to non-controlling interests in legacy Greenspring entities was $3.2 million and $1.3 million for the three months ended September 30, 2026 and 2025, respectively, and $(2.1) million and $4.7 million for the six months ended September 30, 2026 and 2025, respectively.
Net Loss Attributable to Non-Controlling Interests in the Partnership
Net loss attributable to non-controlling interests in the Partnership represents the portion of net income or loss attributable to the interests held by the Class B, Class C and Class D unitholders of the Partnership. Net loss attributable to non-controlling interests in the Partnership was $50.4 million and $259.9 million for the three months ended September 30, 2026 and 2025, respectively, and $126.6 million and $287.1 million for the six months ended September 30, 2026 and 2025, respectively.
Net Income Attributable to Redeemable Non-Controlling Interests in Consolidated Funds
Net income attributable to redeemable non-controlling interests in Consolidated Funds represents income of the Consolidated Funds attributable to third-party investors. Net income attributable to redeemable non-controlling interests in Consolidated Funds was $8.7 million and $39.7 million for the three months ended September 30, 2026 and 2025, respectively, and $12.3 million and $60.6 million for the six months ended September 30, 2026 and 2025, respectively.
Net Income Attributable to Redeemable Non-Controlling Interests in Subsidiaries
Net income attributable to redeemable non-controlling interests in subsidiaries was $0.9 million and $0.4 million for the three months ended September 30, 2026 and 2025, respectively, and $1.4 million and $1.0 million for the six months ended September 30, 2026 and 2025, respectively.
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Key Operating Metrics
Assets Under Management
AUM was $261 billion as of September 30, 2026, $233 billion as of March 31, 2026 and $209 billion as of September 30, 2025.
Assets Under Advisement
Assets related to our advisory accounts were $697 billion as of September 30, 2026, $652 billion as of March 31, 2026 and $562 billion as of September 30, 2025.
Fee-Earning AUM
Three Months Ended September 30, 2026
FEAUM increased approximately $4.7 billion to $158.2 billion as of September 30, 2026 as compared to June 30, 2026. During the period, FEAUM from SMAs increased approximately $1.4 billion and FEAUM from commingled funds increased approximately $3.3 billion.
Six Months Ended September 30, 2026
FEAUM increased approximately $14.2 billion to $158.2 billion as of September 30, 2026 as compared to March 31, 2026. During the period, FEAUM from SMAs increased approximately $2.9 billion and FEAUM from commingled funds increased approximately $11.3 billion.
| Three Months Ended September 30, 2026 | Six Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||
| (in millions) | SMAs | Focused Commingled Funds | Total | SMAs | Focused Commingled Funds | Total | |||||||||||||||||||||||||||||
| Beginning balance | $ | 83,251 | $ | 70,313 | $ | 153,564 | $ | 81,815 | $ | 62,232 | $ | 144,047 | |||||||||||||||||||||||
Contributions(1) | 4,570 | 3,885 | 8,455 | 7,520 | 12,090 | 19,610 | |||||||||||||||||||||||||||||
Distributions(2) | (3,171) | (1,282) | (4,453) | (4,209) | (2,878) | (7,087) | |||||||||||||||||||||||||||||
Market value, FX and other(3) | 19 | 656 | 675 | (457) | 2,128 | 1,671 | |||||||||||||||||||||||||||||
| Ending balance | $ | 84,669 | $ | 73,572 | $ | 158,241 | $ | 84,669 | $ | 73,572 | $ | 158,241 | |||||||||||||||||||||||
(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.
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The following tables set forth FEAUM by asset class and selected weighted-average management fee rate data:
| As of | |||||||||||||||||
| (in millions) | September 30, 2026 | March 31, 2026 | September 30, 2025 | ||||||||||||||
| FEAUM | |||||||||||||||||
| Private equity | $ | 87,694 | $ | 75,626 | $ | 69,932 | |||||||||||
| Infrastructure | 30,967 | 30,745 | 27,007 | ||||||||||||||
| Private debt | 26,971 | 24,797 | 22,443 | ||||||||||||||
| Real estate | 12,609 | 12,879 | 13,409 | ||||||||||||||
| Total | $ | 158,241 | $ | 144,047 | $ | 132,791 | |||||||||||
| As of | |||||||||||||||||
| September 30, 2026 | March 31, 2026 | September 30, 2025 | |||||||||||||||
Weighted-average fee rate(1) | |||||||||||||||||
Private equity(2) | 0.78 | % | 0.74 | % | 0.71 | % | |||||||||||
Real estate, infrastructure and private debt asset classes(3) | 0.55 | % | 0.52 | % | 0.54 | % | |||||||||||
| Total | 0.67 | % | 0.64 | % | 0.63 | % | |||||||||||
(1)Weighted-average fee rates reflect the applicable management fees for the last 12 months ended on each period presented and is inclusive of any retroactive fees for such period.
(2)The change in weighted-average fee rates primarily reflected the timing of new funds, shifts in mix between SMAs and focused commingled funds and growth in our private wealth funds which earn higher fee rates.
(3)The change in weighted-average fee rates primarily reflected the timing of new funds, shifts in asset class mix, shifts in mix between SMAs and focused commingled funds and growth in our private wealth funds which earn higher fee rates.
Undeployed Fee-Earning Capital
As of September 30, 2026, we had $42.4 billion of undeployed fee-earning capital, which will generate management fee revenue once invested or activated.
Non-GAAP Financial Measures
Below is a description of our non-GAAP financial measures. These measures are presented on a basis other than GAAP and should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.
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Adjusted Net Income
Adjusted net income (“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 profits interest issued by our non-wholly owned subsidiaries and unrealized mark-to-market changes in the fair value of the profits interest issued in SPW, (d) amortization of intangibles, (e) net income (loss) attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interest issued in SPW, (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 below table). 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.
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.
Fee-Related Earnings
Fee-related earnings (“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 profits interest issued by our non-wholly owned subsidiaries and unrealized mark-to-market changes in the fair value of the profits interest issued in SPW, (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 below table). 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 revenues.
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.
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.
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Fee-Related Earnings
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
FRE increased $47.6 million, or 61%, to $126.2 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting higher fee revenues, partially offset by higher adjusted cash-based compensation, adjusted general, administrative and other expenses and adjusted equity-based compensation.
Six Months Ended September 30, 2026 Compared to Six Months Ended September 30, 2025
FRE increased $71.9 million, or 45%, to $231.8 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting higher fee revenues, partially offset by higher adjusted cash-based compensation, adjusted general, administrative and other expenses and adjusted equity-based compensation.
Adjusted Revenues and Adjusted Net Income
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Adjusted revenues increased $80.4 million, or 28%, to $362.7 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily reflecting increases in fee revenues and realized carried interest allocation revenues.
ANI increased $16.2 million, or 24%, to $82.9 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to the increase in FRE as discussed above, and higher adjusted realized investment income. The overall increase was partially offset by a higher allocation of income to non-controlling interests and lower performance fee-related earnings.
Six Months Ended September 30, 2026 Compared to Six Months Ended September 30, 2025
Adjusted revenues increased $143.5 million, or 28%, to $663.3 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily reflecting increases in fee revenues and realized carried interest allocation revenues.
ANI increased $28.0 million, or 24%, to $143.2 million for the six months ended September 30, 2026 as compared to the six months ended September 30, 2025, primarily due to the increase in FRE as discussed above, higher adjusted realized investment income and higher performance fee-related earnings. The overall increase was partially offset by a higher allocation of income to non-controlling interests.
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Adjusted Weighted-Average Shares and Adjusted Net Income Per Share
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 for the three and six months ended September 30, 2026 and 2025.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except share and per share amounts) | |||||||||||||||||||||||
| ANI | $ | 82,944 | $ | 66,709 | $ | 143,239 | $ | 115,243 | |||||||||||||||
| Weighted-average shares of Class A common stock outstanding – Basic | 82,293,951 | 78,561,587 | 82,145,627 | 78,206,102 | |||||||||||||||||||
| Assumed vesting of RSUs | 383,849 | 509,007 | 363,745 | 428,850 | |||||||||||||||||||
| Assumed purchase under ESPP | — | — | 203 | — | |||||||||||||||||||
Exchange of Class B units in the Partnership(1) | 38,387,098 | 39,500,159 | 38,470,761 | 39,553,919 | |||||||||||||||||||
Exchange of Class C units in the Partnership(1) | 881,103 | 947,580 | 897,770 | 953,768 | |||||||||||||||||||
Exchange of Class D units in the Partnership(1) | 3,528,769 | 2,944,261 | 3,804,664 | 3,235,592 | |||||||||||||||||||
| Adjusted weighted-average shares | 125,474,770 | 122,462,594 | 125,682,770 | 122,378,231 | |||||||||||||||||||
| ANI per share | $ | 0.66 | $ | 0.54 | $ | 1.14 | $ | 0.94 | |||||||||||||||
(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.
Reconciliation of GAAP to Non-GAAP Financial Measures
The table below shows a reconciliation of revenues to adjusted revenues.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Total revenues | $ | 773,144 | $ | 454,225 | $ | 1,152,033 | $ | 818,512 | |||||||||||||||
| Unrealized carried interest allocations | (301,710) | (147,813) | (345,685) | (236,696) | |||||||||||||||||||
| Deferred incentive fees | 903 | 671 | 903 | 671 | |||||||||||||||||||
| Legacy Greenspring carried interest allocations | (114,995) | (27,143) | (152,166) | (66,780) | |||||||||||||||||||
Management and advisory fee revenues for the Consolidated Funds(1) | 4,455 | 1,972 | 6,218 | 3,539 | |||||||||||||||||||
Incentive fees for the Consolidated Funds(2) | 916 | 430 | 2,005 | 563 | |||||||||||||||||||
| Adjusted revenues | $ | 362,713 | $ | 282,342 | $ | 663,308 | $ | 519,809 | |||||||||||||||
(1)Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
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(2)Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
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. 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.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| GAAP management and advisory fees, net | $ | 293,149 | $ | 215,489 | $ | 562,320 | $ | 426,662 | |||||||||||||||
Adjustments(1) | 4,455 | 1,972 | 6,218 | 3,539 | |||||||||||||||||||
| Fee revenues | $ | 297,604 | $ | 217,461 | $ | 568,538 | $ | 430,201 | |||||||||||||||
| GAAP incentive fees | $ | 2,495 | $ | 4,902 | $ | 2,495 | $ | 5,092 | |||||||||||||||
Adjustments(2) | 1,819 | 1,101 | 2,908 | 1,234 | |||||||||||||||||||
| Adjusted incentive fees | $ | 4,314 | $ | 6,003 | $ | 5,403 | $ | 6,326 | |||||||||||||||
| GAAP realized investment income | $ | 5,292 | $ | 2,516 | $ | 6,849 | $ | 3,456 | |||||||||||||||
| Adjusted realized investment income | $ | 5,292 | $ | 2,516 | $ | 6,849 | $ | 3,456 | |||||||||||||||
| GAAP interest income | $ | 2,397 | $ | 3,224 | $ | 7,118 | $ | 5,720 | |||||||||||||||
Adjustments(3) | (640) | (1,273) | (3,896) | (2,271) | |||||||||||||||||||
| Adjusted interest income | $ | 1,757 | $ | 1,951 | $ | 3,222 | $ | 3,449 | |||||||||||||||
| GAAP interest expense | $ | (23,515) | $ | (4,425) | $ | (27,853) | $ | (8,959) | |||||||||||||||
Adjustments(4) | 19,013 | — | 19,013 | — | |||||||||||||||||||
| Adjusted interest expense | $ | (4,502) | $ | (4,425) | $ | (8,840) | $ | (8,959) | |||||||||||||||
| GAAP other income (loss) | $ | (20,838) | $ | 1,978 | $ | (25,081) | $ | 7,130 | |||||||||||||||
Adjustments(5) | 20,216 | (1,073) | 23,855 | (5,232) | |||||||||||||||||||
| Adjusted other income (loss) | $ | (622) | $ | 905 | $ | (1,226) | $ | 1,898 | |||||||||||||||
(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 interest income earned by the Consolidated Funds.
(4)Reflects the removal of interest expense incurred by the Consolidated Funds.
(5)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.
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The table below shows a reconciliation of income (loss) before income tax to ANI and FRE.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Income (loss) before income tax | $ | 48,028 | $ | (675,826) | $ | (152,222) | $ | (696,176) | |||||||||||||||
Net income attributable to non-controlling interests in subsidiaries(1) | (53,269) | (27,645) | (94,854) | (58,370) | |||||||||||||||||||
| Net (income) loss attributable to non-controlling interests in legacy Greenspring entities | (3,172) | (1,313) | 2,075 | (4,695) | |||||||||||||||||||
| Unrealized carried interest allocations | (301,710) | (147,813) | (345,685) | (236,696) | |||||||||||||||||||
| Unrealized performance fee-related compensation | 211,049 | 88,727 | 255,735 | 133,084 | |||||||||||||||||||
| Unrealized investment (income) loss | (15,822) | 3,726 | (25,088) | (5,846) | |||||||||||||||||||
| Impact of Consolidated Funds | (161,586) | (43,864) | (159,674) | (68,271) | |||||||||||||||||||
| Deferred incentive fees | 903 | 671 | 903 | 671 | |||||||||||||||||||
Equity-based compensation(2) | 372,579 | 880,154 | 683,229 | 1,064,663 | |||||||||||||||||||
| Amortization of intangibles | 10,190 | 10,207 | 20,380 | 20,414 | |||||||||||||||||||
| Tax Receivable Agreements adjustments through earnings | — | (1,302) | — | (1,302) | |||||||||||||||||||
Non-core items(3) | (24) | 99 | 270 | 785 | |||||||||||||||||||
| Pre-tax ANI | 107,166 | 85,821 | 185,069 | 148,261 | |||||||||||||||||||
Income taxes(4) | (24,222) | (19,112) | (41,830) | (33,018) | |||||||||||||||||||
| ANI | 82,944 | 66,709 | 143,239 | 115,243 | |||||||||||||||||||
Income taxes(4) | 24,222 | 19,112 | 41,830 | 33,018 | |||||||||||||||||||
| Realized carried interest allocations | (60,795) | (58,878) | (89,367) | (83,282) | |||||||||||||||||||
| Realized performance fee-related compensation | 32,808 | 30,995 | 46,670 | 42,700 | |||||||||||||||||||
| Adjusted realized investment income | (5,292) | (2,516) | (6,849) | (3,456) | |||||||||||||||||||
Adjusted incentive fees(5) | (4,314) | (6,003) | (5,403) | (6,326) | |||||||||||||||||||
Adjusted interest income(6) | (1,757) | (1,951) | (3,222) | (3,449) | |||||||||||||||||||
Adjusted interest expense(7) | 4,502 | 4,425 | 8,840 | 8,959 | |||||||||||||||||||
Adjusted other (income) loss(8) | 622 | (905) | 1,226 | (1,898) | |||||||||||||||||||
Net income attributable to non-controlling interests in subsidiaries(1) | 53,269 | 27,645 | 94,854 | 58,370 | |||||||||||||||||||
| FRE | $ | 126,209 | $ | 78,633 | $ | 231,818 | $ | 159,879 | |||||||||||||||
(1)Reflects the portion of pre-tax ANI attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interest issued in the private wealth subsidiary. Amounts attributable to the profits interest issued in the private wealth subsidiary were $30.0 million and $10.1 million for the three months ended September 30, 2026 and 2025, respectively, and $54.5 million and $18.6 million for the six months ended September 30, 2026 and 2025, respectively. Amounts specifically attributable to non-controlling interests in subsidiaries not attributable to the private wealth subsidiary were $23.2 million and $17.5 million for the three months ended September 30, 2026 and 2025, respectively, and $40.4 million and $39.8 million for the six months ended September 30, 2026 and 2025, respectively.
(2)Reflects equity-based compensation for profits interest issued by our non-wholly owned subsidiaries and unrealized mark-to-market changes in the fair value of the profits interest issued in the private wealth subsidiary.
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(3)Includes (income) expense related to transaction costs ($0.2 million and $0.6 million for the six months ended September 30, 2026 and 2025, respectively), loss on change in fair value for contingent consideration obligation ($0.1 million for the three and six months ended September 30, 2025), unrealized amounts associated with deferred compensation plan liability adjustments ($0.1 million for the six months ended September 30, 2026) and other non-core operating income and expenses.
(4)Represents corporate income taxes at a blended statutory rate of 22.6% applied to pre-tax ANI for the three and six months ended September 30, 2026 and 22.3% applied to pre-tax ANI for the three and six months ended September 30, 2025. The 22.6% rate for the three and six months ended September 30, 2026 is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 1.6%. The 22.3% rate for the three and six months ended September 30, 2025 is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 1.3%.
(5)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.
(6)Reflects the removal of interest income earned by the Consolidated Funds.
(7)Reflects the removal of interest expense incurred 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.
Investment Performance
The following table presents information relating to the performance of all the investments that StepStone has recommended and subsequently tracked across asset classes and investment strategies, except as set forth in greater detail below. The data for these investments are generally presented from the inception date of each strategy and asset class through June 30, 2026 and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.
The historical results of our investments are not indicative of future results to be expected of existing or new investment funds, and are not a proxy for the performance of our Class A common stock, including because:
•market conditions and investment opportunities may differ from those in the past;
•the performance of our funds is largely based on the NAV (as defined below) of the funds’ investments, including unrealized gains, which may never be realized;
•newly-established funds may generate lower investment returns during the period that they initially deploy their capital;
•changes in the global tax and regulatory environment may impact both the investment preferences of our clients and the financing strategies employed by businesses in which particular funds invest, which may reduce the overall capital available for investment and the availability of suitable investments, thereby reducing investment returns in the future;
•competition for investment opportunities, resulting from the increasing amount of capital invested in private markets alternatives, may increase the cost and reduce the availability of suitable investments, thereby reducing investment returns in the future; and
•the industries and businesses in which particular funds invest will vary.
Historical and future returns of investments included in our track record are not directly correlated to potential returns on our Class A common stock.
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For the purposes of the following table:
•“Invested capital” refers to the total amount of all investments made by a fund, including commitment-reducing and non-commitment-reducing capital calls;
•“NAV” refers to the estimated fair value of unrealized investments plus any net assets or liabilities associated with the investment as of June 30, 2026;
•“IRR” refers to the annualized internal rate of return for all investments within the relevant investment strategy on an inception-to-date basis as of June 30, 2026 (except as noted otherwise below), based on contributions, distributions and unrealized value;
•“Net IRR” refers to IRR net of fees and expenses charged by both the underlying fund managers and StepStone; and
•“Net TVM” refers to the total value to paid-in capital or invested capital expressed as a multiple, and is calculated as distributions plus unrealized valuations divided by invested capital (including all capitalized costs).
StepStone Performance Summary by Asset Class
| PRIVATE EQUITY BUYOUT | VENTURE CAPITAL & GROWTH EQUITY | REAL ESTATE | INFRASTRUCTURE | PRIVATE DEBT | |||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY(1,3,4) | NET IRR(2) | INVESTMENT STRATEGY(1,3,5) | NET IRR(2) | INVESTMENT STRATEGY(1,3,6) | NET IRR(2) | INVESTMENT STRATEGY(1,3,7) | NET IRR(2) | INVESTMENT STRATEGY(1,3,8) | NET IRR(2) | ||||||||||||||||||||||||||||||||
| Primaries | 13.5% | Primaries | 14.9% | Core/core+ fund investments | 6.8% | Core/debt - all strategies | 6.7% | Primaries | 7.7% | ||||||||||||||||||||||||||||||||
| Secondaries | 16.5% | Secondaries | 14.4% | Value-add/opportunistic fund investments | 7.7% | Core+/value-add - primary fund investments | 10.4% | Direct lending | 7.0% | ||||||||||||||||||||||||||||||||
| Co-investments | 15.9% | Directs/co-investments | 17.6% | Real estate debt fund investments | 5.1% | Core+/value-add - secondary fund investments | 10.0% | Opportunistic | 8.2% | ||||||||||||||||||||||||||||||||
| Value-add/opportunistic secondaries & co-investments | 8.4% | Core+/value-add - co-investments(3) | 11.3% | Co-investments/secondaries | 9.0% | ||||||||||||||||||||||||||||||||||||
| Direct lending | 8.1% | ||||||||||||||||||||||||||||||||||||||||
| Opportunistic | 10.3% | ||||||||||||||||||||||||||||||||||||||||
Customized managed accounts3 | (*) | ||||||||||||||||||||||||||||||||||||||||
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(1)Investment returns reflect NAV data for underlying investments as of June 30, 2026, as reported by underlying managers up to the business day occurring on or after 100 days following June 30, 2026. For investment returns where NAV data is not available by the business day occurring on or after 100 days following June 30, 2026, such NAVs are adjusted for cash activity following the last available reported NAV. Investment returns are calculated on a constant currency adjusted reporting basis converting non-USD investment cash flows and NAVs to USD using the foreign currency exchange rate corresponding to each client’s first cash flow date.
(2)Net IRR and Net TVM are presented solely for illustrative purposes and do not represent actual returns received by any investor in any of the StepStone Funds. Returns represented are net of fees and expenses charged by both the underlying investment and hypothetical StepStone fees. The aggregate returns are not indicative of the returns an individual investor would receive from these investments. No individual investor received the aggregate returns described herein as the investments were made across multiple mandates over multiple years. StepStone fees and expenses are based on the following assumptions (management fees and expenses represent an annual rate, charged quarterly):
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i.Primaries management fee: 25 basis points of net invested capital for private equity, real estate and infrastructure; 25 basis points of net asset value for private debt; 75 basis points of committed capital for the StepStone VC Platform.
ii.Secondaries management fee: 125 basis points, 125 basis points and 95 basis points of capital commitments for private equity, non-core/core+ real estate and infrastructure, respectively, in years 1 through 4 for management fees, charged quarterly. In year 5, management fees step down to 90% of the previous year’s fee. 65 basis points of net asset value for private debt; 75 basis points of committed capital for the StepStone VC Platform; 75 basis points of net invested capital for core/core+ real estate.
iii.Co-investments management fee: 100 basis points of capital commitments for private equity in years 1 through 4 for management fees, charged quarterly. In year 5, management fees step down to 90 basis points of the net invested capital, charged quarterly. 100 basis points of net committed capital for non-core/core+ real estate; 90 and 50 basis points of net committed capital for infrastructure co-investments and direct asset management investments, respectively; 65 basis points of net asset value for private debt; 200 basis points of net invested capital for the StepStone VC Platform; 75 basis points of net invested capital for core/core+ real estate.
iv.All investments assess 5 basis points of capital commitments for fund expenses, charged quarterly, and 1 basis point of capital commitments drawn down in the first cash flow quarter for organizational costs.
v.Private equity secondaries and co-investments include 12.5% and 10.0% of paid and unrealized carry, respectively, with an 8.0% preferred return hurdle; infrastructure secondaries and co-investments include 10.0% of paid and unrealized carry, respectively, with an 8.0% preferred return hurdle; non-core/core+ real estate secondaries and co-investments include 15.0% of paid and unrealized carry, with an 8.0% preferred return hurdle; private debt secondaries and co-investments include 10.0% of paid and unrealized carry, with a 5.0% preferred return hurdle; the StepStone VC Platform primaries, secondaries and co-investments/directs include 5.0%, 5.0% and 20.0%, respectively, of paid and unrealized carry with no preferred return hurdle; and core/core+ real estate secondaries and co-investments include 10.0% of paid and unrealized carry, with a 7.0% preferred return hurdle.
Net IRR and Net TVM for investments reflect the underlying fund manager’s use of subscription backed credit facilities, if reported to StepStone as such by the underlying managers. Aggregate net performance returns for private equity buyout secondaries and co-investments are presented on a levered basis. Without the subscription lines, Net IRR/Net TVM for private equity buyout secondaries and co-investments would be 14.3%/1.3x and 14.4%/1.6x, respectively. Reinvested/recycled amounts increase contributed capital.
(3)Investments returns of clients’ portfolios are included in the performance summary past the client’s termination date until such time as StepStone stops receiving current investment data (quarterly valuations and cash flows) for such investment. At that point, StepStone will then ‘liquidate’ the fund by entering a distribution amount equal to the last reported NAV, thus ending its contribution to the track record as of that date. Historical performance contribution will be maintained up until the ‘liquidation’ date.
(4)Private equity buyout performance includes buyout-focused strategies comprising 1,168 investments totaling $176.6 billion of capital commitments, and excludes (i) venture capital and growth equity direct investments, reported separately; (ii) 194 client-directed buyout investments, totaling $33.8 billion of capital commitments; (iii) 95 investments with energy, infrastructure and other non-buyout-focused strategies totaling $9.6 billion of capital commitments; (iv) two advisory co-investments totaling $100 million; and (v) any investments that do not have client data monitored in SPI Reporting.
(5)Venture capital and growth equity includes 2,411 investments totaling $70.7 billion of capital commitments and excludes (i) 74 client-directed investments, totaling $2.4 billion of capital commitments, and (ii) investments that do not have client data monitored in SPI Reporting. StepStone's venture capital and growth equity strategy is composed of a) investments in the StepStone venture capital platform, comprising venture capital focused commingled funds and separately managed accounts (the “StepStone VC Platform”) and b) underlying venture capital investments within StepStone’s broader private equity accounts (“StepStone PE Accounts”).
(6)Real estate includes 535 investments totaling $97.4 billion of capital commitments and excludes (i) 105 client-directed real estate investments, totaling $18.3 billion of capital commitments, (ii) 19 secondary/co-investment core/core+ or credit investments, totaling $1.1 billion of capital commitments, (iii) four advisory fund investments totaling $463.6 million of capital commitments, and (iv) investments that do not have client data monitored in SPI Reporting.
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(7)Infrastructure includes 394 investments totaling $81.7 billion of capital commitments and excludes (i) eight infrastructure investments made by the Partnership prior to the formation of the infrastructure subsidiary in 2013 or made prior to StepStone’s acquisition of Courtland Partners, Ltd. on April 1, 2018 (the “Courtland acquisition”), totaling $501.9 million of capital commitments, (ii) 55 client-directed infrastructure investments, totaling $12.8 billion of capital commitments, and (iii) investments that do not have client data monitored in SPI Reporting.
(8)Private debt includes 2,068 investments totaling $75.2 billion of capital commitments and excludes (i) 50 client-directed debt investments, totaling $4.8 billion of capital commitments, (ii) 50 real estate credit investments that were recommended by Courtland Partners, Ltd. prior to the Courtland acquisition, totaling $5.1 billion of capital commitments, and (iii) investments that do not have client data monitored in SPI Reporting. *Net IRRs are not aggregated and shown for customized managed accounts (which include capacity-negotiated GP co-investment accounts and GP primary managed accounts) totaling $37.6 billion of committed capital, as the investment objective of those investments are customized to the respective client’s investment target on multiple-on-committed-capital (“MOCC”) and can differ significantly.
Liquidity and Capital Resources
Sources and Uses of Liquidity
We generate cash primarily from management and advisory fees and performance fees. We have historically managed our liquidity and capital resource needs through (a) cash generated from our operating activities, (b) realizations from investment activities, (c) borrowings, interest payments and repayments under credit agreements, senior note issuances and other borrowing arrangements, (d) funding capital commitments to our funds, and (e) funding our growth initiatives, including capital expenditures for property, equipment, and acquisitions to expand into new businesses.
As of September 30, 2026, we had $298.3 million of cash, cash equivalents and restricted cash ($802.5 million including Consolidated Funds) and $2,669.3 million of investments in StepStone Funds ($5,612.9 million including Consolidated Funds), including $2,383.4 million of accrued carried interest allocations, against $286.2 million in debt obligations, net of debt issuance costs ($1,680.8 million including Consolidated Funds), and $1,356.0 million in accrued carried interest-related compensation payable. Cash held by the Consolidated Funds is generally not available to fund our liquidity needs, and debt obligations of the Consolidated Funds are generally nonrecourse to us.
Ongoing sources of cash include (a) management and advisory fees, which are collected monthly or quarterly, (b) performance fees, which are volatile and largely unpredictable as to amount and timing; and (c) distributions from our investments in the StepStone Funds. We use cash flow from operations and distributions from our investments in the StepStone Funds to pay compensation and related expenses, general and administrative expenses, income taxes, debt service, capital expenditures, dividends to our stockholders and distributions to holders of Partnership units, make repurchases under our stock repurchase program and to make investments in the StepStone Funds. We believe we will have sufficient ability to meet our liquidity and capital resources requirements for the next 12 months through cash flows from operating activities, existing cash and cash equivalents, borrowings under the Revolver, and our ability to obtain future financing. As discussed below under “Future Sources and Uses of Liquidity—Option Agreement Payment,” we expect to fund the cash portion of the consideration payable in connection with the exercise of our call right under the option agreement relating to the profits interest in SPW, or in connection with an earlier exercise of the put right held by CH Equity Partners, LLC, through a combination of cash flows from operating activities (including cash retained by the Partnership in lieu of a fiscal 2027 supplemental dividend), borrowings under our Revolver, and the incurrence of additional indebtedness and/or the issuance of equity securities.
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Cash Flows
The accompanying condensed consolidated cash flows include the Consolidated Funds, which activities primarily consist of raising capital from third-party investors, purchasing investments, making payment for the operating costs of the fund, generating cash flows from realized income allocations of investments and sales of investments, and making distributions to investors. The Consolidated Funds are accounted for as investment companies and therefore the cash flows from investing activities are included in cash flows from operations.
The following table summarizes our cash flows attributable to operating, investing and financing activities:
| Six Months Ended September 30, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Net cash provided by (used in) operating activities | $ | (818,067) | $ | 62,523 | |||||||
| Net cash provided by (used in) investing activities | 16,564 | (21,575) | |||||||||
| Net cash provided by financing activities | 483,907 | 43,419 | |||||||||
| Effect of exchange rate changes | 1,139 | (7,463) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (316,457) | $ | 76,904 | |||||||
Operating Activities
Operating activities provided (used) $(818.1) million and $62.5 million of cash for the six months ended September 30, 2026 and 2025, respectively. For the six months ended September 30, 2026 and 2025, respectively, these amounts primarily consisted of the following:
•net income, after adjustments for non-cash items (including unrealized mark-to-market changes in the fair value of the profits interest issued in the private wealth subsidiary, unrealized carried interest allocations, unrealized performance fee-related compensation and unrealized investment (income) loss), of $371.1 million and $243.0 million;
•net change in operating assets and liabilities of $51.7 million and $48.0 million;
•adjustments for realized and unrealized gains on investments of Consolidated Funds of $213.0 million and $66.3 million;
•adjustments for unrealized gains from notes payable of Consolidated Funds of $11.6 million and $0 million;
•net contributions to investments of Consolidated Funds of $1,031.8 million and $166.5 million; and
•net change in operating assets and liabilities of Consolidated Funds of $15.5 million and $4.3 million.
Investing Activities
Investing activities provided (used) $16.6 million and $(21.6) million of cash for the six months ended September 30, 2026 and 2025, respectively, and primarily consisted of the following amounts:
•net contributions to investments of $12.0 million and $21.2 million;
•net distributions from investments in legacy Greenspring entities of $3.3 million and $1.1 million;
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•net cash recognized upon initial consolidation of funds of $27.6 million and $0 million; and
•purchases of fixed assets of $2.3 million and $1.4 million.
Financing Activities
Financing activities provided $483.9 million and $43.4 million of cash for the six months ended September 30, 2026 and 2025, respectively, and primarily consisted of the following:
•borrowings on revolving credit facility of $15.0 million and $0 million;
•proceeds from capital contributions from non-controlling interests of $0.9 million and $1.6 million;
•distributions to non-controlling interests of $102.6 million and $112.9 million;
•purchase of non-controlling interests of $9.6 million and $10.3 million;
•proceeds from capital contributions to legacy Greenspring entities of $0.5 million and $0.8 million;
•distributions to non-controlling interests in legacy Greenspring entities of $4.0 million and $4.4 million;
•dividends paid to common stockholders of $95.8 million and $72.3 million;
•payments for repurchases of Class A common stock of $21.3 million and $0 million;
•proceeds from issuance of Class A common stock under ESPP of $2.1 million and $1.7 million;
•payments to related parties under the Tax Receivable Agreements of $16.2 million and $11.5 million;
•issuance of notes payable for Consolidated Funds of $56.0 million and $0 million;
•net borrowings on fund credit facilities of $556.1 million and $17.5 million;
•payment of debt issuance costs on fund credit facilities of $4.4 million and $0 million;
•proceeds from capital contributions from non-controlling interests in Consolidated Funds of $296.2 million and $0 million;
•distributions to non-controlling interests in Consolidated Funds of $300.9 million and $0 million;
•contributions from redeemable non-controlling interests in Consolidated Funds of $125.3 million and $281.4 million; and
•redemptions of redeemable non-controlling interests in Consolidated Funds of $13.5 million and $48.3 million.
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Debt Obligations
Debt Obligations of the Company
Revolving Credit Facility
We are party to a credit agreement, as amended and restated in May 2024 (the “Credit Agreement”), which, among other things, increased the aggregate principal amount of the commitments thereunder to $300.0 million from $225.0 million and extended the maturity date of the revolving facility to May 2029. The Credit Agreement was arranged by JPMorgan Chase Bank, N.A., as the administrative agent and collateral agent, and certain other lenders party thereto and provides for a $300.0 million multicurrency Revolver.
Borrowings under the Revolver bear interest at a variable rate per annum. We may designate each borrowing as (i) in the case of any borrowing in U.S. dollars, a base rate loan or a Term Secured Overnight Financing Rate (“SOFR”) rate loan, (ii) in the case of any borrowing denominated in Euros, a EURIBOR rate loan, (iii) in the case of any borrowing denominated in British Pounds Sterling, a Sterling Overnight Index Average (“SONIA”) loan, (iv) in the case of any borrowing denominated in Swiss Francs, a Swiss Average Rate Overnight (“SARON”) loan, and (v) in the case of any borrowing denominated in Australian dollars, an AUD rate loan. Borrowings bear interest equal to (i) in the case of base rate loans, 1.00% plus the greatest of (a) the Prime Rate, (b) the New York Federal Reserve Bank Rate plus 0.50% and (c) the 1 month Term SOFR, plus 1.10%, (ii) in the case of a Term SOFR rate loan, the Term SOFR rate plus 2.10%, (iii) in the case of a EURIBOR rate loan, the EURIBOR rate multiplied by the Statutory Reserve Rate (as defined in the Credit Agreement) plus 2.00%, (iv) in the case of a SONIA loan, the Sterling Overnight Index Average plus 2.03%, (v) in the case of a SARON loan, the Swiss Average Rate Overnight plus 2.00%, and (vi) in the case of an AUD rate loan, the AUD Screen Rate (as defined in the Credit Agreement) multiplied by the Statutory Reserve Rate plus 2.20%, in certain cases subject to applicable interest rate floors. The weighted-average interest rate in effect for the Revolver as of September 30, 2026 was 5.91%.
Borrowings under the Revolver may be repaid at any time during the term of the Credit Agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the maturity date. The maturity date for the Revolver is May 16, 2029. As of September 30, 2026, we had outstanding borrowings of $115.0 million under the Revolver.
The Revolver bears a fee on undrawn commitments equal to 0.25% per annum if total utilization of revolving commitments is equal to or greater than 50% and 0.35% per annum if total utilization of revolving commitments is less than 50%.
We can use available funding capacity under the Revolver to satisfy letters of credit in amounts up to $10.0 million. Amounts used to satisfy the letters of credit reduce the available capacity under the Revolver. As of September 30, 2026, we had outstanding letters of credit totaling $9.1 million.
Senior Notes
On October 22, 2024, we issued $175.0 million aggregate principal amount of our 5.52% Series A senior notes due October 22, 2029 (the “Notes”), pursuant to a note purchase agreement, dated as of October 22, 2024 (the “Note Purchase Agreement”), in a private placement exempt from registration under the Securities Act.
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Interest on the Notes is payable semi-annually in arrears on April 22 and October 22 of each year. Interest on the Notes accrues from and including October 22, 2024. The Notes will mature on October 22, 2029. We may, at our option, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding at a redemption price equal to 100% of the principal amount thereof plus any applicable “make-whole amount” and accrued and unpaid interest to the redemption date. So long as no default or event of default shall have occurred and be continuing under the Note Purchase Agreement, no make-whole amount will be due if the Notes are paid on or after April 22, 2029.
Debt Obligations of Consolidated Funds
Debt obligations of the Consolidated Funds primarily comprise amounts due to holders of debt securities issued by a consolidated collateralized financing entity (“CFE”). These debt obligations are collateralized by the assets held by the CFE and are non-recourse to us. We are not liable for any of the notes payable issued by the CFE, as the creditors of the CFE do not have recourse to our assets outside of the assets held by the CFE. As of September 30, 2026, the collateral of the CFE consisted of cash and cash equivalents and investments in funds which are generally organized as partnership and LLC interests. The debt obligations may only be repaid from collateral proceeds of the CFE, which will occur as distributions are received from underlying assets. Debt obligations of the Consolidated Funds are collateralized by the assets held by the Consolidated Funds and the assets of one fund may not be used to satisfy the liabilities of another fund.
As of September 30, 2026, the consolidated CFE has the ability to issue up to $1,625.5 million of additional debt obligations.
Credit Facilities of Consolidated Funds
Certain Consolidated Funds may maintain revolving credit facilities that are secured by fund assets to fund investments on a short-term basis. These debt obligations of the Consolidated Funds are non-recourse to us.
In December 2024, one of our consolidated investment funds entered into a credit agreement with Northern Trust Global Service SE (the “Fund Credit Facility”). The Fund Credit Facility provides for a multi-currency revolving credit facility of up to $125.0 million. Amounts drawn under the facility must be repaid within 180 days. As of September 30, 2026, there were no outstanding borrowings under the Fund Credit Facility.
Borrowings under the Fund Credit Facility bear interest at a variable rate per annum. Borrowings in USD will bear interest at the applicable federal funds target rate (upper range) plus a margin of 250 basis points. Borrowings in GBP will bear interest at the Bank of England base rate plus a margin of 250 basis points. Borrowings in EUR will bear interest at the European Central Bank main refinancing rate plus a margin of 250 basis points.
In September 2026, the Fund Credit Facility was amended to remove the fund as a borrower, and as a result the Fund Credit Facility is not reflected in our condensed consolidated financial statements. The Fund Credit Facility remains in effect for the other borrowers. The fund entered into a senior secured credit agreement with Investec Bank plc, as administrative agent, security agent and lender, providing for a revolving credit facility of up to $83.0 million (the “Investec Credit Facility”). As of September 30, 2026, there were no outstanding borrowings under the Investec Credit Facility.
Borrowings under the Investec Credit Facility bear interest at a variable rate per annum at the Term SOFR plus a margin of 280 basis points. The facility also bears an unused commitment fee of 1.00% per annum.
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Borrowings under the Investec Credit Facility may be repaid at any time during the term of the agreement and, subject to certain terms and conditions, may be reborrowed prior to the termination date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the termination date. The termination date for the Investec Credit Facility is September 21, 2029.
In March 2026, our consolidated CFE entered into a credit agreement arranged by Alter Domus LLC, as the administrative agent, and certain other lenders party thereto that provides for a revolving credit facility (the “Liquidity Loan Facility”) of up to $389.7 million. As of September 30, 2026, there were no outstanding borrowings under the Liquidity Loan Facility.
Borrowings under the Liquidity Loan Facility bear interest at a variable rate per annum at the Term SOFR plus a margin of 270 basis points. The facility also bears an unused commitment fee of 1.00% per annum.
Borrowings under the Liquidity Loan Facility may be repaid at any time during the term of the agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the maturity date. The maturity date for the Liquidity Loan Facility is March 23, 2031.
In May 2026, one of our consolidated investment funds entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, lead arranger, letter of credit issuer and lender, providing for a revolving credit facility of up to $675.0 million (“Subscription Facility #1”). In August 2026, Subscription Facility #1 was amended, increasing the aggregate revolving commitments to $1,000.0 million. As of September 30, 2026, there were approximately $422.9 million in outstanding borrowings under Subscription Facility #1.
Borrowings under Subscription Facility #1 bear interest at a variable rate equal to SOFR plus 1.80% per annum. In addition, Subscription Facility #1 is subject to an unused commitment fee of 0.25% per annum on undrawn commitments and customary fees associated with letters of credit. The weighted-average interest rate in effect under Subscription Facility #1 as of September 30, 2026 was 5.68%.
During the availability period, amounts borrowed under Subscription Facility #1 may be repaid and subsequently reborrowed, subject to the terms and conditions of the credit agreement. Obligations under Subscription Facility #1 are secured by investor capital commitments and related collateral pledged to the lenders. Subscription Facility #1 matures on May 4, 2029 and may be extended in accordance with the terms of the credit agreement.
In June 2026, one of our consolidated investment funds entered into a supplemental credit agreement arranged by Lloyds Bank Corporate Markets PLC, as the agent and security agent, and UBS Switzerland AG, as the lender, establishing an additional revolving credit sub-facility of up to $160.0 million (the “Sub-Facility”). As of September 30, 2026, there were approximately $85.0 million in outstanding borrowings under the Sub-Facility.
Borrowings under the Sub-Facility bear interest at a variable rate per annum based on the applicable benchmark rate plus a margin of 170 basis points. The Sub-Facility also bears a commitment fee of 0.25% per annum. The weighted-average interest rate in effect for the Sub-Facility as of September 30, 2026 was 5.56%.
Borrowings under the Sub-Facility may be repaid in accordance with the terms of the supplemental credit agreement and, subject to certain terms and conditions, may be reborrowed prior to the termination date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the termination date. The termination date for the Sub-Facility is 365 days from the effective date, subject to the extension option under the facilities agreement.
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One of our consolidated investment funds is party to a credit agreement, as amended and restated in March 2026, with Goldman Sachs Bank USA that provides for an uncommitted revolving credit facility of up to $37.0 million (the “Goldman Credit Facility”). As of September 30, 2026, there were approximately $18.2 million in outstanding borrowings under the Goldman Credit Facility.
Borrowings under the Goldman Credit Facility bear interest at a variable rate per annum equal to the Term SOFR plus 310 basis points or the Prime Rate plus 210 basis points. The Goldman Credit Facility also requires payment of a quarterly administrative fee equal to 15 basis points of the facility limit. The interest rate in effect for the Goldman Credit Facility as of September 30, 2026 was 6.78%.
Borrowings under the Goldman Credit Facility may be repaid at any time during the term of the credit agreement and, subject to the terms of the credit agreement, may be reborrowed. The Goldman Credit Facility terminates on the earlier of (i) the date that is 30 days prior to the last date on which capital may be called from investors to repay obligations under the facility or (ii) the date on which the credit agreement is terminated by either the lender or the borrower.
One of our consolidated investment funds is party to a credit agreement, as amended in August 2026, with Wells Fargo Bank, National Association, as administrative agent, lead arranger, letter of credit issuer and lender, providing for a revolving credit facility of up to $66.5 million (“Subscription Facility #2”). As of September 30, 2026, there were approximately $57.7 million in outstanding borrowings under Subscription Facility #2.
Borrowings under Subscription Facility #2 bear interest at a variable rate equal to SOFR plus 2.00% per annum. In addition, Subscription Facility #2 is subject to an unused commitment fee of 0.20% per annum on undrawn commitments and customary fees associated with letters of credit. The weighted-average interest rate in effect under Subscription Facility #2 as of September 30, 2026 was 5.90%.
During the availability period, amounts borrowed under Subscription Facility #2 may be repaid and subsequently reborrowed, subject to the terms and conditions of the credit agreement. Obligations under Subscription Facility #2 are secured by investor capital commitments and related collateral pledged to the lenders. Subscription Facility #2 matures on August 7, 2029 and may be extended in accordance with the terms of the credit agreement.
Debt Covenants
Revolving Credit Facility
Under the terms of the Credit Agreement, certain of our assets serve as pledged collateral. In addition, the Credit Agreement contains covenants that, among other things: limit our ability to incur indebtedness; create, incur or allow liens; transfer or dispose of assets; merge with other companies; make certain investments; pay dividends or make distributions in certain circumstances; engage in new or different lines of business; and engage in certain transactions with affiliates. The Credit Agreement also contains financial covenants requiring us to maintain a total net leverage ratio and a minimum total of fee-earning assets under management.
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Senior Notes
The Note Purchase Agreement contains certain covenants, including those requiring us to (a) maintain a total net leverage ratio, (b) maintain a minimum total of fee-earning assets under management, (c) cause at least 80% of all management fees payable by material subsidiaries to us to be collected each period without deferral, waiver or reduction, (d) limit the amount of secured indebtedness to be incurred by us, and (e) other customary covenants. The Note Purchase Agreement also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all Notes, plus all accrued and unpaid interest thereon and any applicable “make-whole amount” to become or to be declared due and payable immediately.
Investec Credit Facility
Under the terms of the Investec Credit Facility, certain assets of the Consolidated Funds serve as pledged collateral. In addition, the Investec Credit Facility contains covenants that, among other things: limit the ability of the fund to incur indebtedness; create, incur or allow liens; and other customary covenants. The Investec Credit Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Investec Credit Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately.
Liquidity Loan Facility
Under the terms of the Liquidity Loan Facility, certain assets of the Consolidated Funds serve as pledged collateral. In addition, the Liquidity Loan Facility contains covenants that, among other things: limit the ability of the fund to incur indebtedness; create, incur or allow liens; and other customary covenants. The Liquidity Loan Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Liquidity Loan Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately.
Subscription Facility #1
Under the terms of Subscription Facility #1, certain assets of the Consolidated Funds, including investor capital commitments and related collateral accounts, serve as pledged collateral. In addition, Subscription Facility #1 contains customary affirmative and negative covenants, including restrictions on creating, incurring or permitting liens on collateral and certain other activities. The credit agreement contains customary representations and warranties, borrowing conditions, collateral maintenance provisions, and events of default.
Sub-Facility
Under the terms of the Sub-Facility, certain assets of the Consolidated Funds serve as pledged collateral. Additionally, the Sub-Facility provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Sub-Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately. The Sub-Facility also contains financial covenants requiring the fund to maintain an uncalled capital commitment coverage ratio.
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Goldman Credit Facility
Under the terms of the Goldman Credit Facility, certain assets of the Consolidated Funds serve as pledged collateral. In addition, the Goldman Credit Facility contains customary affirmative and negative covenants, including restrictions on creating, incurring or permitting liens on collateral and certain other activities. The Goldman Credit Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Goldman Credit Facility, together with accrued and unpaid interest thereon, including default interest, to become immediately due and payable.
Subscription Facility #2
Under the terms of Subscription Facility #2, certain assets of the Consolidated Funds, including investor capital commitments and related collateral accounts, serve as pledged collateral. In addition, Subscription Facility #2 contains customary affirmative and negative covenants, including restrictions on creating, incurring or permitting liens on collateral and certain other activities. The credit agreement contains customary representations and warranties, borrowing conditions, collateral maintenance provisions and events of default.
As of September 30, 2026, we were in compliance with the covenants under our various debt agreements.
Equity Transactions
Stock Repurchase Program
On March 9, 2026, our board of directors authorized a stock repurchase program of up to $100.0 million of our Class A common stock, excluding fees and expenses. Under the stock repurchase program, repurchases may be made from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act. The stock repurchase program may be modified, suspended or discontinued by the board of directors at any time without prior notice and does not have a specified expiration date. Each share of Class A common stock repurchased is funded with the proceeds, on a dollar-for-dollar basis, from the repurchase of Class A units by the Partnership from us in order to maintain the one-to-one ratio between outstanding shares of Class A common stock and Class A units. During the three and six months ended September 30, 2026, we made payments for common stock repurchases under the stock repurchase program of $2.1 million and $21.3 million, respectively. We had $70.0 million remaining under the stock repurchase program to repurchase additional shares as of September 30, 2026.
Future Sources and Uses of Liquidity
In the future, we may issue additional equity or debt with the objective of increasing our available capital, including to fund the cash portion of the consideration payable under the option agreement relating to the profits interest in SPW, which we currently expect to fund in part through the incurrence of additional indebtedness and/or the issuance of equity securities. The availability and terms of any such financing will depend on market conditions and other factors, and any such financing may require consents or amendments under our Credit Agreement and/or Note Purchase Agreement. See "—Option Agreement Payment" below. We believe that we will be able to continue to meet our current and long-term liquidity and capital requirements through our cash flows from operating activities, existing cash and cash equivalents, and our ability to obtain future financing.
Dividend and Distribution Policy
On November 5, 2026, we announced a quarterly cash dividend of $0.33 per share of Class A common stock, payable on December 15, 2026 to holders of record at the close of business on November 30, 2026.
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The following table presents information regarding cash quarterly dividends on Class A common shares for the periods indicated:
Quarterly Fiscal Period1 | Dividend Payment Date | Dividend Per Share of Class A Common Stock | ||||||||||||
| First quarter | June 30, 2025 | $ | 0.24 | |||||||||||
Supplemental2 | June 30, 2025 | 0.40 | ||||||||||||
| Second quarter | September 15, 2025 | 0.28 | ||||||||||||
| Third quarter | December 15, 2025 | 0.28 | ||||||||||||
| Fourth quarter | March 13, 2026 | 0.28 | ||||||||||||
| Total dividends paid in FY2026 | $ | 1.48 | ||||||||||||
| First quarter | June 30, 2026 | $ | 0.28 | |||||||||||
Supplemental2 | June 30, 2026 | 0.55 | ||||||||||||
| Second quarter | September 15, 2026 | 0.33 | ||||||||||||
| Total dividends paid in FY2027 | $ | 1.16 | ||||||||||||
(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.
In November 2026, our board of directors determined that we will not declare or pay a supplemental cash dividend in respect of fiscal 2027. In connection with this determination, the Partnership will not make the corresponding pro rata distributions to its limited partners, including us, that we otherwise could have used to fund such supplemental dividend. Instead, the Partnership intends to retain such cash and use it to fund a portion of the consideration payable in connection with our expected exercise of our call right (or any earlier exercise of the put right held by CH Equity Partners, LLC) under the option agreement relating to the profits interest in SPW. See “—Option Agreement Payment” below. Our board of directors will continue to evaluate the payment of supplemental dividends in respect of future fiscal years.
We may pay additional dividends to holders of our Class A common stock in the future. The declaration and payment by us of any future dividends to Class A stockholders is at the sole discretion of our board of directors. Subject to funds being legally available, we will cause the Partnership to make pro rata distributions to its limited partners, including us, in amounts sufficient to make payment of applicable income and other taxes, to make payments under the Tax Receivable Agreements, and to make payment for corporate and other general expenses. Because our board of directors may determine to pay or not pay dividends to our Class A stockholders, our Class A stockholders may not necessarily receive dividend distributions relating to our excess distributions, even if the Partnership makes excess distributions to us.
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Tax Receivable Agreements
We have entered into an Exchanges Tax Receivable Agreement with the Class B limited partners, Class C limited partners, and Class D limited partners and a Reorganization Tax Receivable Agreement with certain pre-IPO institutional investors (collectively, the “Tax Receivable Agreements”). The Tax Receivable Agreements provide for payment by SSG to these partners and pre-IPO institutional investors of the Partnership of 85% of the amount of the net cash tax savings, if any, that SSG realizes (or, under certain circumstances, is deemed to realize) as a result of increases in tax basis (and utilization of certain other tax benefits) resulting from (i) SSG’s acquisition of such partner’s and institutional investor’s Partnership units and (ii) in the case of the Exchanges Tax Receivable Agreement, any payments SSG makes under the Exchanges Tax Receivable Agreement (including tax benefits related to imputed interest). SSG will retain the benefit of the remaining 15% of these net cash tax savings under the Tax Receivable Agreements.
Option Agreement Payment
In November 2022, we entered into arrangements with the SPW management team (the “Private Wealth Transaction”) under which certain members of the SPW team received a profits interest in SPW and concurrently entered into an option agreement which provides that (i) we have the right to acquire the profits interest at the end of any fiscal quarter after June 30, 2027 in exchange for payment of a call price and (ii) an entity named CH Equity Partners, LLC, held by the SPW management team and other employees of SPW, has the right to put the profits interest to us on June 30, 2026 or at the end of any fiscal quarter thereafter, in exchange for payment of a put price. The applicable call or put price is, in certain circumstances, subject to an earn-out or earn-down. The call or put price will be payable in cash unless we elect to pay up to 75% of the consideration in units of the Partnership, each to be exchangeable into shares of our Class A common stock, and, in either case, rights under one or more tax receivable agreements. As of September 30, 2026, the put right held by CH Equity Partners, LLC has not been exercised. We currently expect to exercise our call right under the option agreement relating to the profits interest in SPW when it first becomes exercisable following June 30, 2027, although the timing and terms of any exercise remain subject to change. The estimated fair value of the liability classified awards as of September 30, 2026 was $2,885.3 million, or $3,588.3 million, on an undiscounted basis. As of September 30, 2026, the estimated cash amount payable to settle the liability under the Private Wealth Transaction was $897.2 million, based on our expectation for settlement of 25% of the consideration in cash and 75% in units of the Partnership. We expect to fund the cash portion of the consideration through a combination of cash flows from operating activities, including cash retained by the Partnership in lieu of making the distributions that we otherwise could have used to fund a supplemental dividend in respect of fiscal 2027 (see “—Dividend and Distribution Policy” above), borrowings under our Revolver, and the incurrence of additional indebtedness and/or the issuance of equity securities. There can be no assurance that such financing will be available on acceptable terms or at all, and any such financing may require consents or amendments under our Credit Agreement and/or Note Purchase Agreement. To the extent we settle a portion of the consideration in units of the Partnership, holders of our Class A common stock would experience dilution upon exchange of such units. See note 9 to our condensed consolidated financial statements included elsewhere in this quarterly report for more information. Certain assumptions used in determining the fair value are inherently subjective; therefore, the ultimate settlement amount for the liability classified awards may differ materially from the current estimate. For more information, see “Risk Factors—Risks Related to Our Business—Under our option agreement with respect to SPW, we may purchase certain profits interest of SPW and the purchase price for such purchases may be substantial” included in our annual report on Form 10-K for the fiscal year ended March 31, 2026.
Leases
During the three months ended September 30, 2026, we capitalized a lease amendment for an additional floor at our New York office, which increased our future lease payment obligations by $59.7 million over a remaining lease term of 15 years.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that would expose us to any liability or require us to fund losses or guarantee target returns to clients in our funds that are not reflected in our condensed consolidated financial statements. See notes 4 and 14, respectively, to our condensed consolidated financial statements included elsewhere in this quarterly report for information on variable interest entities and commitments and contingencies.
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates and judgments, however, are both subjective and subject to change, and actual amounts may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.
See note 2 to our condensed consolidated financial statements included elsewhere in this quarterly report, and note 2 to our audited consolidated financial statements in our Form 10-K for the year ended March 31, 2026 for a summary of our significant accounting policies.
Recent Accounting Developments
Information regarding recent accounting developments and their effects to us can be found in note 2 to our condensed consolidated financial statements included elsewhere in this quarterly report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including price risk, interest-rate risk, access to and cost of financing risk, liquidity risk, counterparty risk and foreign exchange-rate risk. Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit markets or financial market dislocations.
Market Risk
Our predominant exposure to market risk is related to our role as general partner or investment manager for our focused commingled funds and SMAs and the sensitivities to movements in the fair value of their investments, which may adversely affect our performance fee revenues and investment income.
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Our management fee and advisory fee revenues have historically been only marginally affected by changes in investment values because our management fees are generally based on commitments or net invested capital and our advisory fees are fixed. For the last twelve months ended September 30, 2026 and March 31, 2026, NAV-based management fees represented approximately 33% and 24%, respectively, of total net management and advisory fees. The increase in NAV-based management fees as a percentage of total net management and advisory fees is primarily attributable to the continued growth of our private wealth funds, which earn fees based on a contractual rate applied to NAV. As the private wealth funds continue to scale, the proportion of NAV-based fees may increase further in future periods, which could result in greater sensitivity of our management fee revenues to changes in investment values. We estimate that a 10% decline in market values of the investments held in our funds as of September 30, 2026 and March 31, 2026, would result in an approximate decrease to annual management fees of $31.2 million and $21.2 million, respectively.
The fair value of the financial assets and liabilities of our focused commingled funds and SMAs may fluctuate in response to changes in the fair value of a fund’s underlying investments, foreign currency exchange rates, commodity prices and interest rates. The effect of these risks is as follows:
•Incentive fees from our funds are not materially affected by changes in the fair value of unrealized investments because they are based on realized gains and subject to achievement of performance criteria rather than on the fair value of the fund’s assets prior to realization. As of September 30, 2026 and March 31, 2026, we had $22.0 million and $21.1 million, respectively, of deferred incentive fee revenue recorded in accounts payable, accrued expenses and other liabilities in the condensed consolidated balance sheets.
•We earn carried interest allocation revenue from certain of the StepStone Funds based on cumulative fund performance to date, subject to specified performance criteria. Our carried interest allocation is affected by changes in market factors. However, the degree of impact will vary depending on several factors, including but not limited to (i) the performance criteria for each individual fund in relation to how that fund’s results of operations are affected by changes in market factors; (ii) whether such performance criteria are annual or over the life of the fund; (iii) to the extent applicable, the previous performance of each fund in relation to its performance criteria; and (iv) whether each funds’ performance related distributions are subject to contingent repayment. As a result, the impact of changes in market factors on carried interest allocation revenue will vary widely from fund to fund. An overall decrease of 10% in the general equity markets would not necessarily drive the same impact on our funds’ valuations, as many of our investments in our funds are illiquid and do not trade on any exchange. Additionally, as a large percentage of our carried interest allocation revenues is paid to employees as carried interest-related compensation, the overall net impact to our income would be mitigated by lower compensation payments. As of September 30, 2026, and March 31, 2026, the maximum amount of carried interest allocations (excluding legacy Greenspring carried interest allocations) subject to contingent repayment, net of tax, was an estimated $483.1 million and $438.7 million, respectively, assuming the fair value of all investments was zero, a possibility that we view as remote. The primary driver for the change in the contingent repayment between periods is due to additional carried interest allocation realizations in fiscal 2027 that are potentially subject to clawback.
•Investment income changes in relation to realized and unrealized gains and losses of the underlying investments in our funds in which we have a general partner commitment. Based on investments (excluding legacy Greenspring investments in funds and investments of Consolidated Funds) held as of September 30, 2026 and March 31, 2026, we estimate that a 10% decline in fair value of the investments in funds would result in a decrease in investment income of $28.6 million and $24.9 million, respectively.
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Exchange Rate Risk
Our business is affected by movements in the exchange rate between the U.S. dollar and non-U.S. dollar currencies in respect of revenues and expenses of our foreign offices that are denominated in non-U.S. dollar currencies and cash and other balances we hold in non-functional currencies. The amount of revenues and expenses attributable to our foreign offices is not material in relation to our U.S. offices. Therefore, changes in exchange rates are not expected to materially affect our condensed consolidated financial statements.
Certain of our focused commingled funds and SMAs hold investments denominated in non-U.S. dollar currencies that may be affected by movements in the exchange rate between the U.S. dollar and foreign currencies, which could affect investment performance. The currency exposure related to investments in foreign currency assets is limited to our general partner interest, which is typically no more than 1% of total capital commitments. Changes in exchange rates are not expected to materially affect our condensed consolidated financial statements.
Interest Rate Risk
As of September 30, 2026 and March 31, 2026, we had $175.0 million in borrowings outstanding under our Notes. As of September 30, 2026 and March 31, 2026, borrowings outstanding under our Revolver were $115.0 million and $100.0 million, respectively. The Revolver accrues interest at a variable rate and the Notes accrue interest at a fixed rate of 5.52%. As of September 30, 2026 and March 31, 2026, we estimate that interest expense would increase by $1.2 million and $1.0 million, respectively, on an annualized basis as a result of a 100 basis point increase in interest rates for our Revolver. Based on the $298.3 million and $213.6 million of cash, cash equivalents and restricted cash (excluding Consolidated Funds) as of September 30, 2026 and March 31, 2026, respectively, we estimate that interest income would increase by $3.0 million and $2.1 million, respectively, on an annualized basis as a result of a 100 basis point increase in interest rates.
Credit Risk
We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives.
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Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
The information required with respect to this item can be found under the heading “Litigation” in note 14, Commitments and Contingencies, to our condensed consolidated financial statements included elsewhere in this quarterly report, and such information is incorporated by reference into this Part II, Item 1.
Item 1A. Risk Factors.
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended March 31, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
In September 2026, we issued 61,016 shares of Class A common stock to certain limited partners of the Partnership in exchange for 61,016 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class B Exchange Agreement. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us. We also issued 58,050 shares of Class A common stock to certain limited partners of the Partnership in exchange for 58,050 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to us. The shares of Class A common stock issued in these exchanges were not registered under the Securities Act in reliance upon the exemption set forth in Section 4(a)(2) of the Securities Act.
See note 13 to our condensed consolidated financial statements included in Part I, Item 1 of this quarterly report for more information.
Issuer Purchases of Equity Securities
The following table sets forth information regarding repurchases of our Class A common stock during the three months ended September 30, 2026:
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| (in thousands, except share and per share amounts) | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program(1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1) | |||||||||||||||||||
| July 1 - July 31, 2026 | 51,977 | $ | 39.96 | 51,977 | $ | 70,000 | |||||||||||||||||
| August 1 - August 31, 2026 | — | $ | — | — | $ | 70,000 | |||||||||||||||||
| September 1 - September 30, 2026 | — | $ | — | — | $ | 70,000 | |||||||||||||||||
| Total | 51,977 | 51,977 | |||||||||||||||||||||
______________________________
(1)On March 9, 2026, our board of directors authorized a stock repurchase program of up to $100.0 million of our Class A common stock, excluding fees and expenses. Under the stock repurchase program, repurchases may be made from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act. The stock repurchase program may be modified, suspended or discontinued by the board of directors at any time without prior notice and does not have a specified expiration date. Each share of Class A common stock repurchased is funded with the proceeds, on a dollar-for-dollar basis, from the repurchase of Class A units by the Partnership from us in order to maintain the one-to-one ratio between outstanding shares of Class A common stock and Class A units.
See note 13 to our condensed consolidated financial statements included in Part I, Item 1 of this quarterly report for more information.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
(c) Trading Arrangements.
During the quarter ended September 30, 2026, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) adopted terminated
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Item 6. Exhibits.
| Incorporated By Reference | Filed or Furnished Herewith | |||||||||||||||||||
| Exhibit No. | Description of Exhibit | Form | Exhibit | Filing Date | File No. | |||||||||||||||
3.1 | Restated Certificate of Incorporation of StepStone Group Inc. | 8-K | 3.2 | 9/19/2025 | 001-39510 | |||||||||||||||
3.2 | Amended and Restated Bylaws of StepStone Group Inc. | 10-Q | 3.2 | 2/09/2023 | 001-39510 | |||||||||||||||
10.1 | Summary of StepStone Group Inc. Independent Director Compensation Program | X | ||||||||||||||||||
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended | X | ||||||||||||||||||
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended | X | ||||||||||||||||||
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||
| 101 | The following financial information from our quarterly report on Form 10-Q for the quarter ended September 30, 2026 formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Loss; (iii) the Condensed Consolidated Statements of Comprehensive Loss; (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; (vi) Notes to Condensed Consolidated Financial Statements; and (vii) Part II, Item 5(c). | X | ||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 9, 2026.
| STEPSTONE GROUP INC. | ||||||||
| By: | /s/ David Y. Park | |||||||
| David Y. Park | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer and Authorized Signatory) | ||||||||
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