STEP StepStone Group Inc

StepStone Group Inc. (Nasdaq: STEP), a global private markets investment firm focused on providing customized investment solutions and advisory and data services, today reported results for the quarter ended March 31, 2024. This represents results for the fourth quarter and fiscal year ended March 31, 2024. The Board of Directors of the Company has declared a quarterly cash dividend of $0.21 per share of Class A common stock, and a supplemental dividend of $0.15 per share of Class A common stock, both payable on June 28, 2024, to the holders of record as of the close of business on June 14, 2024.

StepStone issued a full detailed presentation of its fourth quarter and full fiscal year ended March 31, 2024 results, which can be accessed by visiting the Company’s website at https://shareholders.stepstonegroup.com.

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Thursday, May 23, 2024 at 5:00 pm ET to discuss the Company’s results for the fourth quarter and fiscal year ended March 31, 2024. The webcast will be made available on the Shareholders section of the Company's website at https://shareholders.stepstonegroup.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register. A replay will also be available on the Shareholders section of the Company's website approximately two hours after the conclusion of the event.

To join as a live participant in the question and answer portion of the call, participants must register at https://register.vevent.com/register/BId5cd8066fd0940f4a3b8e418ecac260c. Upon registering you will receive the dial-in number and a PIN to join the call as well as an email confirmation with the details.

About StepStone

StepStone Group Inc. (Nasdaq: STEP) is a global private markets investment firm focused on providing customized investment solutions and advisory, data and administrative services to its clients. As of March 31, 2024, StepStone was responsible for approximately $678 billion of total capital, including $157 billion of assets under management. StepStone'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, which include high-net-worth and mass affluent individuals. StepStone 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.

Forward-Looking Statements

Some of the statements in this release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. Words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions 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 in this release should not be regarded as a representation 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 under the “Risk Factors” section of our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on May 26, 2023, and in our annual report on Form 10-K to be filed with the SEC for the fiscal year ended March 31, 2024, as such factors may be updated from time to time. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use the following non-GAAP financial measures: adjusted management and advisory fees, net, adjusted revenues, adjusted net income (on both a pre-tax and after-tax basis), adjusted net income per share, adjusted weighted-average shares, fee-related earnings, fee-related earnings margin, gross realized performance fees and net realized performance fees. We have provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, the non-GAAP financial measures in this earnings release may not be comparable to similarly titled measures used by other companies in our industry or across different industries. For definitions of these non-GAAP measures and reconciliations to applicable GAAP measures, please see the section titled “Non-GAAP Financial Measures: Definitions and Reconciliations.”

Financial Highlights and Key Business Drivers/Operating Metrics
	Three Months Ended																Year Ended March 31,							Percentage Change
(in thousands, except share and per share amounts and where noted)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024			vs. FQ4'23		vs. FY'23
Financial Highlights
GAAP Results
Management and advisory fees, net	$	132,573		$	138,115		$	142,123		$	151,492		$	153,410			$	497,179		$	585,140			16	%	18	%
Total revenues		172,374			178,011			191,422			(14,612	)		356,810				(67,574	)		711,631			107	%	na
Total performance fees		39,801			39,896			49,299			(166,104	)		203,400				(564,753	)		126,491			411	%	na
Net income (loss)		56,816			49,446			59,251			(23,419	)		82,542				(45,275	)		167,820			45	%	na
Net income (loss) per share of Class A common stock:
Basic	$	0.46		$	0.34		$	0.42		$	(0.32	)	$	0.48			$	(0.30	)	$	0.91			4	%	na
Diluted	$	0.46		$	0.34		$	0.42		$	(0.32	)	$	0.48			$	(0.30	)	$	0.91			4	%	na
Weighted-average shares of Class A common stock:
Basic		62,805,788			62,834,818			62,858,468			64,068,952			64,194,859				61,884,671			63,489,135			2	%	3	%
Diluted		65,831,409			65,739,470			66,198,129			64,068,952			67,281,567				61,884,671			66,544,038			2	%	8	%
Quarterly dividend per share of Class A common stock(1)	$	0.20		$	0.20		$	0.21		$	0.21		$	0.21			$	0.80		$	0.83			5	%	4	%
Supplemental dividend per share of Class A common stock(2)	$	—		$	0.25		$	—		$	—		$	—			$	—		$	0.25			na		na
Accrued carried interest allocations	$	1,227,173		$	1,277,783		$	1,331,778		$	1,203,847		$	1,354,051										10	%
Non-GAAP Results(3)
Adjusted management and advisory fees, net(4)	$	132,720		$	138,301		$	142,327		$	151,943		$	153,808			$	497,326		$	586,379			16	%	18	%
Adjusted revenues		152,940			152,780			149,800			185,123			177,357				641,970			665,060			16	%	4	%
Fee-related earnings (“FRE”)		37,796			44,402			43,827			50,664			50,900				156,158			189,793			35	%	22	%
FRE margin(5)		28	%		32	%		31	%		33	%		33	%			31	%		32	%
Gross realized performance fees		20,220			14,479			7,473			33,180			23,549				144,644			78,681			16	%	(46) %
Adjusted net income (“ANI”)		27,115			29,388			30,173			42,116			37,716				142,663			139,393			39	%	(2) %
Adjusted weighted-average shares		114,765,635			114,673,696			115,118,060			115,232,927			115,512,301				114,618,105			115,134,473
ANI per share	$	0.24		$	0.26		$	0.26		$	0.37		$	0.33			$	1.24		$	1.21			38	%	(2) %
Key Business Drivers/Operating Metrics(in billions)
Assets under management (“AUM”)(6)	$	138.4		$	142.6		$	145.8		$	149.0		$	156.6										13	%
Assets under advisement (“AUA”)(6)		482.2			497.0			512.9			510.5			521.1										8	%
Fee-earning AUM (“FEAUM”)		85.4			87.4			87.3			89.4			93.9										10	%
Undeployed fee-earning capital (“UFEC”)		15.7			16.9			18.1			21.4			22.6										44	%

_______________________________

(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 year 2023.(3) Adjusted management and advisory fees, net, adjusted revenues, FRE, FRE margin, gross realized performance fees, ANI, adjusted weighted-average shares and ANI per share are non-GAAP measures. See the definitions of these measures and reconciliations to the respective, most comparable GAAP measures under “Non-GAAP Financial Measures: Definitions and Reconciliations.”(4) Excludes the impact of consolidating the Consolidated Funds. See reconciliation of GAAP measures to adjusted measures that follows.(5) FRE margin is calculated by dividing FRE by adjusted management and advisory fees, net.(6) AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented. Does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.

StepStone Group Inc.GAAP Consolidated Balance Sheets(in thousands, except share and per share amounts)
	As of March 31,
		2024			2023
Assets
Cash and cash equivalents	$	143,430		$	102,565
Restricted cash		718			955
Fees and accounts receivable		56,769			44,450
Due from affiliates		67,531			54,322
Investments:
Investments in funds		135,043			115,187
Accrued carried interest allocations		1,354,051			1,227,173
Legacy Greenspring investments in funds and accrued carried interest allocations(1)		631,197			770,652
Deferred income tax assets		184,512			44,358
Lease right-of-use assets, net		97,763			101,130
Other assets and receivables		60,611			44,060
Intangibles, net		304,873			354,645
Goodwill		580,542			580,542
Assets of Consolidated Funds:
Cash and cash equivalents		38,164			25,997
Investments, at fair value		131,858			30,595
Other assets		1,745			772
Total assets	$	3,788,807		$	3,497,403
Liabilities and stockholders’ equity
Accounts payable, accrued expenses and other liabilities	$	127,417		$	89,396
Accrued compensation and benefits		101,481			66,614
Accrued carried interest-related compensation		719,497			644,517
Legacy Greenspring accrued carried interest-related compensation(1)		484,154			617,994
Due to affiliates		212,918			205,424
Lease liabilities		119,739			121,224
Debt obligations		148,822			98,351
Liabilities of Consolidated Funds:
Other liabilities		1,645			566
Total liabilities		1,915,673			1,844,086
Redeemable non-controlling interests in Consolidated Funds		102,623			24,530
Redeemable non-controlling interests in subsidiaries		115,920			—
Stockholders’ equity:
Class A common stock, $0.001 par value, 650,000,000 authorized; 65,614,902 and 62,834,791 issued and outstanding as of March 31, 2024 and 2023, respectively		66			63
Class B common stock, $0.001 par value, 125,000,000 authorized; 45,030,959 and 46,420,141 issued and outstanding as of March 31, 2024 and 2023, respectively		45			46
Additional paid-in capital		310,293			610,567
Retained earnings		13,768			160,430
Accumulated other comprehensive income		304			461
Total StepStone Group Inc. stockholders’ equity		324,476			771,567
Non-controlling interests in subsidiaries		974,559			36,380
Non-controlling interests in legacy Greenspring entities(1)		147,042			152,658
Non-controlling interests in the Partnership		208,514			668,182
Total stockholders’ equity		1,654,591			1,628,787
Total liabilities and stockholders’ equity	$	3,788,807		$	3,497,403

(1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests.

StepStone Group Inc.GAAP Consolidated Statements of Income (Loss)(in thousands, except share and per share amounts)
	Three Months Ended March 31,								Year Ended March 31,
		2024				2023				2024				2023
Revenues
Management and advisory fees, net	$	153,410			$	132,573			$	585,140			$	497,179
Performance fees:
Incentive fees		2,496				1,318				25,339				9,663
Carried interest allocations:
Realized		18,054				18,693				49,401				131,089
Unrealized		151,757				100,753				126,908				(253,342	)
Total carried interest allocations		169,811				119,446				176,309				(122,253	)
Legacy Greenspring carried interest allocations(1)		31,093				(80,963	)			(75,157	)			(452,163	)
Total performance fees		203,400				39,801				126,491				(564,753	)
Total revenues		356,810				172,374				711,631				(67,574	)
Expenses
Compensation and benefits:
Cash-based compensation		74,411				69,990				292,962				252,180
Equity-based compensation		13,937				9,335				42,357				24,940
Performance fee-related compensation:
Realized		11,421				12,755				37,687				79,846
Unrealized		84,014				53,515				74,694				(119,039	)
Total performance fee-related compensation		95,435				66,270				112,381				(39,193	)
Legacy Greenspring performance fee-related compensation(1)		31,093				(80,963	)			(75,157	)			(452,163	)
Total compensation and benefits		214,876				64,632				372,543				(214,236	)
General, administrative and other		54,310				35,612				167,317				147,159
Total expenses		269,186				100,244				539,860				(67,077	)
Other income (expense)
Investment income (loss)		3,337				2,964				7,452				(2,509	)
Legacy Greenspring investment loss(1)		(33	)			(11,148	)			(9,087	)			(44,075	)
Investment income of Consolidated Funds		6,115				4,420				28,472				9,315
Interest income		1,429				853				3,664				1,921
Interest expense		(2,649	)			(1,674	)			(9,331	)			(4,189	)
Other income (loss)		(1,308	)			(40	)			2,455				(1,420	)
Total other income (expense)		6,891				(4,625	)			23,625				(40,957	)
Income (loss) before income tax		94,515				67,505				195,396				(41,454	)
Income tax expense		11,973				10,689				27,576				3,821
Net income (loss)		82,542				56,816				167,820				(45,275	)
Less: Net income attributable to non-controlling interests in subsidiaries		4,443				9,358				37,240				35,194
Less: Net loss attributable to non-controlling interests in legacy Greenspring entities(1)		(33	)			(11,148	)			(9,087	)			(44,075	)
Less: Net income (loss) attributable to non-controlling interests in the Partnership		37,279				28,420				59,956				(19,772	)
Less: Net income attributable to redeemable non-controlling interests in Consolidated Funds		4,248				1,385				15,838				1,776
Less: Net income attributable to redeemable non-controlling interests in subsidiaries		5,782				—				5,782				—
Net income (loss) attributable to StepStone Group Inc.	$	30,823			$	28,801			$	58,091			$	(18,398	)
Net income (loss) per share of Class A common stock:
Basic	$	0.48			$	0.46			$	0.91			$	(0.30	)
Diluted	$	0.48			$	0.46			$	0.91			$	(0.30	)
Weighted-average shares of Class A common stock:
Basic		64,194,859				62,805,788				63,489,135				61,884,671
Diluted		67,281,567				65,831,409				66,544,038				61,884,671

(1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests.

Non-GAAP Financial Measures: Definitions and Reconciliations

Adjusted Management and Advisory Fees, Net

The following table presents the components of adjusted management and advisory fees, net. We believe adjusted management and advisory fees, net is useful to investors because it removes the impact of consolidating the Consolidated Funds which we are required to consolidate under GAAP.

	Three Months Ended																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
Focused commingled funds(1)(2)	$	62,093		$	67,119		$	70,481		$	78,633		$	80,434			$	227,068		$	296,667
Separately managed accounts		54,033			55,744			56,431			55,838			55,945				210,187			223,958
Advisory and other services		15,546			14,101			13,740			16,069			16,147				56,244			60,057
Fund reimbursement revenues(1)		1,048			1,337			1,675			1,403			1,282				3,827			5,697
Adjusted management and advisory fees, net	$	132,720		$	138,301		$	142,327		$	151,943		$	153,808			$	497,326		$	586,379

_______________________________

(1) Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.(2) Includes income-based incentive fees of $0.8 million for the three months ended March 31, 2024, $0.6 million for the three months ended December 31, 2023, and $1.4 million in fiscal 2024 from certain funds that are regulated as a business development company.

Adjusted Revenues

Adjusted revenues represents the components of revenues used in the determination of ANI and comprise adjusted management and advisory fees, net, adjusted incentive fees (including the deferred portion) and realized carried interest allocations. We believe adjusted revenues is useful to investors because it presents a measure of realized revenues.

The table below shows a reconciliation of revenues to adjusted revenues.

	Three Months Ended																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September 30,2023			December31, 2023			March 31,2024					2023			2024
Total revenues	$	172,374		$	178,011		$	191,422		$	(14,612	)	$	356,810			$	(67,574	)	$	711,631
Unrealized carried interest allocations		(100,753	)		(49,364	)		(55,371	)		129,584			(151,757	)			253,342			(126,908	)
Deferred incentive fees		209			—			942			—			1,450				3,892			2,392
Legacy Greenspring carried interest allocations		80,963			23,947			12,603			69,700			(31,093	)			452,163			75,157
Management and advisory fee revenues for the Consolidated Funds(1)		147			186			204			451			398				147			1,239
Incentive fees for the Consolidated Funds(2)		—			—			—			—			1,549				—			1,549
Adjusted revenues	$	152,940		$	152,780		$	149,800		$	185,123		$	177,357			$	641,970		$	665,060

_______________________________

(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 fees for the Consolidated Funds, which have been eliminated in consolidation.

Adjusted Net Income

Adjusted net income, or “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 adjusted management and advisory fees, net, adjusted incentive fees (including the deferred portion) 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 awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (d) amortization of intangibles, (e) net income (loss) attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary, (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 table below). 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.

Fee-Related Earnings

Fee-related earnings, or “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 adjusted management and advisory fees, net, less adjusted expenses which are operating expenses other than (a) performance fee-related compensation, (b) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (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 table below). 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 revenue.

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 (as defined below). 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																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
GAAP management and advisory fees, net	$	132,573		$	138,115		$	142,123		$	151,492		$	153,410			$	497,179		$	585,140
Management and advisory fee revenues for the Consolidated Funds(1)		147			186			204			451			398				147			1,239
Adjusted management and advisory fees, net	$	132,720		$	138,301		$	142,327		$	151,943		$	153,808			$	497,326		$	586,379
GAAP incentive fees	$	1,318		$	6		$	4,946		$	17,891		$	2,496			$	9,663		$	25,339
Incentive fee revenues for the Consolidated Funds(2)		—			—			—			—			1,549				—			1,549
Adjusted incentive fees	$	1,318		$	6		$	4,946		$	17,891		$	4,045			$	9,663		$	26,888
GAAP cash-based compensation	$	69,990		$	70,081		$	74,851		$	73,619		$	74,411			$	252,180		$	292,962
Adjustments(3)		(653	)		(531	)		(574	)		(574	)		(461	)			(2,604	)		(2,140	)
Adjusted cash-based compensation	$	69,337		$	69,550		$	74,277		$	73,045		$	73,950			$	249,576		$	290,822
GAAP equity-based compensation	$	9,335		$	8,472		$	5,916		$	14,032		$	13,937			$	24,940		$	42,357
Adjustments(4)		(8,274	)		(7,171	)		(4,644	)		(12,610	)		(12,210	)			(21,914	)		(36,635	)
Adjusted equity-based compensation	$	1,061		$	1,301		$	1,272		$	1,422		$	1,727			$	3,026		$	5,722
GAAP general, administrative and other	$	35,612		$	33,277		$	31,729		$	48,001		$	54,310			$	147,159		$	167,317
Adjustments(5)		(11,086	)		(10,229	)		(8,778	)		(21,189	)		(27,079	)			(58,593	)		(67,275	)
Adjusted general, administrative and other	$	24,526		$	23,048		$	22,951		$	26,812		$	27,231			$	88,566		$	100,042
GAAP interest income	$	853		$	431		$	977		$	827		$	1,429			$	1,921		$	3,664
Interest income earned by the Consolidated Funds(6)		(195	)		(244	)		(249	)		(540	)		(612	)			(195	)		(1,645	)
Adjusted interest income	$	658		$	187		$	728		$	287		$	817			$	1,726		$	2,019
GAAP other income (loss)	$	(40	)	$	227		$	(872	)	$	4,408		$	(1,308	)		$	(1,420	)	$	2,455
Adjustments(7)		86			(376	)		403			(4,301	)		395				86			(3,879	)
Adjusted other income (loss)	$	46		$	(149	)	$	(469	)	$	107		$	(913	)		$	(1,334	)	$	(1,424	)

______________________________

(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.(3) Reflects the removal of severance and compensation paid to certain employees as part of an acquisition earn-out.(4) Reflects the removal of equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.(5) Reflects the removal of lease remeasurement adjustments, accelerated depreciation of leasehold improvements for changes in lease terms, amortization of intangibles, transaction-related costs and other non-core operating income and expenses.(6) Reflects the removal of interest income earned by the Consolidated Funds.(7) Reflects the removal of amounts for Tax Receivable Agreements adjustments recognized as other income (loss), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters, loss on sale of subsidiary and the impact of consolidation of the Consolidated Funds.

The table below shows a reconciliation of income (loss) before income tax to ANI and FRE.

	Three Months Ended																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
Income (loss) before income tax	$	67,505			58,043		$	66,980		$	(24,142	)	$	94,515			$	(41,454	)	$	195,396
Net income attributable to non-controlling interests in subsidiaries(1)		(10,151	)		(10,540	)		(10,321	)		(15,537	)		(12,822	)			(39,054	)		(49,220	)
Net loss attributable to non-controlling interests in legacy Greenspring entities		11,148			2,866			3,966			2,222			33				44,075			9,087
Unrealized carried interest allocations		(100,753	)		(49,364	)		(55,371	)		129,584			(151,757	)			253,342			(126,908	)
Unrealized performance fee-related compensation		53,515			24,211			28,712			(62,243	)		84,014				(119,039	)		74,694
Unrealized investment (income) loss		(2,207	)		(2,529	)		(1,657	)		5,559			(2,280	)			8,012			(907	)
Impact of Consolidated Funds		(4,002	)		(2,647	)		(8,223	)		(11,068	)		(4,138	)			(8,897	)		(26,076	)
Deferred incentive fees		209			—			942			—			1,450				3,892			2,392
Equity-based compensation(2)		8,274			7,171			4,644			12,610			12,210				21,914			36,635
Amortization of intangibles		10,870			10,661			10,661			10,661			10,423				43,481			42,406
Tax Receivable Agreements adjustments through earnings		(244	)		—			—			222			90				(244	)		312
Non-core items(3)		733			(50	)		(1,500	)		6,335			16,780				17,580			21,565
Pre-tax ANI		34,897			37,822			38,833			54,203			48,518				183,608			179,376
Income taxes(4)		(7,782	)		(8,434	)		(8,660	)		(12,087	)		(10,802	)			(40,945	)		(39,983	)
ANI		27,115			29,388			30,173			42,116			37,716				142,663			139,393
Income taxes(4)		7,782			8,434			8,660			12,087			10,802				40,945			39,983
Realized carried interest allocations		(18,693	)		(14,473	)		(1,585	)		(15,289	)		(18,054	)			(131,089	)		(49,401	)
Realized performance fee-related compensation(5)		12,755			9,102			1,720			15,444			11,421				79,846			37,687
Realized investment income		(757	)		(557	)		(1,423	)		(3,508	)		(1,057	)			(5,503	)		(6,545	)
Adjusted incentive fees(6)		(1,318	)		(6	)		(4,946	)		(17,891	)		(4,045	)			(9,663	)		(26,888	)
Deferred incentive fees		(209	)		—			(942	)		—			(1,450	)			(3,892	)		(2,392	)
Adjusted interest income(6)		(658	)		(187	)		(728	)		(287	)		(817	)			(1,726	)		(2,019	)
Interest expense		1,674			2,012			2,108			2,562			2,649				4,189			9,331
Adjusted other (income) loss(6)(7)		(46	)		149			469			(107	)		913				1,334			1,424
Net income attributable to non-controlling interests in subsidiaries(1)		10,151			10,540			10,321			15,537			12,822				39,054			49,220
FRE	$	37,796		$	44,402		$	43,827		$	50,664		$	50,900			$	156,158		$	189,793

_______________________________(1) Reflects the portion of pre-tax ANI attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary:

	Three Months Ended																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
FRE attributable to non-controlling interests in subsidiaries	$	9,843		$	10,534		$	9,463		$	10,518		$	11,559			$	38,673		$	42,074
Non fee-related earnings attributable to non-controlling interests in subsidiaries and profits interests		308			6			858			5,019			1,263				381			7,146
Net income attributable to non-controlling interests in subsidiaries	$	10,151		$	10,540		$	10,321		$	15,537		$	12,822			$	39,054		$	49,220

(2) Reflects equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.

(3) Includes (income) expense related to the following non-core operating income and expenses:

	Three Months Ended															Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024				2023			2024
Transaction costs	$	38		$	37		$	163		$	670		$	3,985		$	6,853		$	4,855
Lease remeasurement adjustments		—			—			—			(106	)		—			(2,709	)		(106	)
Accelerated depreciation of leasehold improvements for changes in lease terms		631			631			631			631			—			1,472			1,893
Severance costs		73			—			—			—			—			293			—
(Gain) loss on change in fair value for contingent consideration obligation		(588	)		(1,249	)		(2,868	)		9,054			12,280			9,361			17,217
Compensation paid to certain employees as part of an acquisition earn-out		579			531			574			574			515			2,310			2,194
Gain from negotiation of certain corporate matters		—			—			—			(5,300	)		—			—			(5,300	)
Loss on sale of subsidiary		—			—			—			812			—			—			812
Total non-core operating income and expenses	$	733		$	(50	)	$	(1,500	)	$	6,335		$	16,780		$	17,580		$	21,565

(4) Represents corporate income taxes at a blended statutory rate applied to pre-tax ANI:

	Three Months Ended											Year Ended March 31,
	March 31,2023		June 30,2023		September30, 2023		December31, 2023		March 31,2024			2023		2024
Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%		21.0	%	21.0	%
Combined state, local and foreign rate	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%		1.3	%	1.3	%
Blended statutory rate	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%		22.3	%	22.3	%

(5) Includes carried interest-related compensation expense related to the portion of net carried interest allocation revenue attributable to equity holders of the Company’s consolidated subsidiaries that are not 100% owned:

	Three Months Ended											Year Ended March 31,
(in thousands)	March 31,2023		June 30,2023		September30, 2023		December31, 2023		March 31,2024				2023		2024
Realized carried interest-related compensation	$	2,358	$	2,189	$	—	$	660	$	910		$	11,375	$	3,759

(6) Excludes the impact of consolidating the Consolidated Funds.(7) Excludes amounts for Tax Receivable Agreements adjustments recognized as other income (loss) ($(0.1) million for the three months ended March 31, 2024, $(0.2) million for the three months ended December 31, 2023 and $0.2 million for the three months ended March 31, 2023, and $(0.3) million and $0.2 million in fiscal 2024 and fiscal 2023, respectively), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters ($5.3 million for the three months ended December 31, 2023 and in fiscal 2024), and loss on sale of subsidiary ($0.8 million for the three months ended December 31, 2023 and in fiscal 2024).

Fee-Related Earnings Margin

FRE margin is a non-GAAP performance measure which is calculated by dividing FRE by adjusted management and advisory fees, net. We believe FRE margin is an important measure of profitability on revenues that are largely recurring by nature. We believe FRE margin is useful to investors because it enables them to better evaluate the operating profitability of our business across periods.

The table below shows a reconciliation of FRE to FRE margin.

	Three Months Ended																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
FRE	$	37,796		$	44,402		$	43,827		$	50,664		$	50,900			$	156,158		$	189,793
Adjusted management and advisory fees, net		132,720			138,301			142,327			151,943			153,808				497,326			586,379
FRE margin		28	%		32	%		31	%		33	%		33	%			31	%		32	%

Gross Realized Performance Fees

Gross realized performance fees represents realized carried interest allocations and adjusted incentive fees, including the deferred portion. We believe gross realized performance fees is useful to investors because it presents the total performance fees realized by us.

Net Realized Performance Fees

Net realized performance fees represents gross realized performance fees, less realized performance fee-related compensation. We believe net realized performance fees is useful to investors because it presents the performance fees attributable to us, net of amounts paid to employees as performance fee-related compensation.

The table below shows a reconciliation of total performance fees to gross and net realized performance fees.

	Three Months Ended																Year Ended March 31,
(in thousands)	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
Incentive fees	$	1,318		$	6		$	4,946		$	17,891		$	2,496			$	9,663		$	25,339
Realized carried interest allocations		18,693			14,473			1,585			15,289			18,054				131,089			49,401
Unrealized carried interest allocations		100,753			49,364			55,371			(129,584	)		151,757				(253,342	)		126,908
Legacy Greenspring carried interest allocations		(80,963	)		(23,947	)		(12,603	)		(69,700	)		31,093				(452,163	)		(75,157	)
Total performance fees		39,801			39,896			49,299			(166,104	)		203,400				(564,753	)		126,491
Unrealized carried interest allocations		(100,753	)		(49,364	)		(55,371	)		129,584			(151,757	)			253,342			(126,908	)
Legacy Greenspring carried interest allocations		80,963			23,947			12,603			69,700			(31,093	)			452,163			75,157
Incentive fee revenues for the Consolidated Funds(1)		—			—			—			—			1,549				—			1,549
Deferred incentive fees		209			—			942			—			1,450				3,892			2,392
Gross realized performance fees		20,220			14,479			7,473			33,180			23,549				144,644			78,681
Realized performance fee-related compensation		(12,755	)		(9,102	)		(1,720	)		(15,444	)		(11,421	)			(79,846	)		(37,687	)
Net realized performance fees	$	7,465		$	5,377		$	5,753		$	17,736		$	12,128			$	64,798		$	40,994

_______________________________(1) Reflects the add back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.

Adjusted Weighted-Average Shares and Adjusted Net Income Per Share

ANI per share measures our per-share earnings assuming all Class B units and Class C 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.

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.

	Three Months Ended																Year Ended March 31,
	March 31,2023			June 30,2023			September30, 2023			December31, 2023			March 31,2024					2023			2024
ANI	$	27,115		$	29,388		$	30,173		$	42,116		$	37,716			$	142,663		$	139,393
Weighted-average shares of Class A common stock outstanding – Basic		62,805,788			62,834,818			62,858,468			64,068,952			64,194,859				61,884,671			63,489,135
Assumed vesting of RSUs		524,576			400,034			801,014			333,402			512,946				669,966			512,152
Assumed vesting and exchange of Class B2 units		2,501,045			2,504,618			2,538,647			2,553,899			2,573,762				2,475,501			2,542,751
Exchange of Class B units in the Partnership(1)		46,420,141			46,420,141			46,417,845			46,314,543			46,272,227				46,780,724			46,356,244
Exchange of Class C units in the Partnership(2)		2,514,085			2,514,085			2,502,086			1,962,131			1,958,507				2,807,243			2,234,191
Adjusted weighted-average shares		114,765,635			114,673,696			115,118,060			115,232,927			115,512,301				114,618,105			115,134,473
ANI per share	$	0.24		$	0.26		$	0.26		$	0.37		$	0.33			$	1.24		$	1.21

_______________________________

(1) Assumes the full exchange of Class B units in the Partnership for Class A common stock of SSG pursuant to the Class B Exchange Agreement.(2) Assumes the full exchange of Class C units in the Partnership for Class A common stock of SSG pursuant to the Class C Exchange Agreement.

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. Refer to the Glossary below for a definition of each of these metrics.

Fee-Earning AUM

	Three Months Ended																Year Ended March 31,							Percentage Change
(in millions)	March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			March 31, 2024					2023			2024			vs. FQ4'23
Separately Managed Accounts
Beginning balance	$	53,420		$	55,345		$	56,645		$	56,380		$	56,660			$	49,586		$	55,345			6	%
Contributions(1)		2,378			1,425			1,036			1,109			2,757				9,658			6,327			16	%
Distributions(2)		(997	)		(429	)		(1,459	)		(1,397	)		(795	)			(4,208	)		(4,080	)		(20) %
Market value, FX and other(4)		544			304			158			568			275				309			1,305			(49) %
Ending balance	$	55,345		$	56,645		$	56,380		$	56,660		$	58,897			$	55,345		$	58,897			6	%
Focused Commingled Funds
Beginning balance	$	29,565		$	30,086		$	30,762		$	30,905		$	32,772			$	25,587		$	30,086			11	%
Contributions(1)		713			796			992			1,898			2,429				5,509			6,115			241	%
Distributions(2)		(308	)		(252	)		(988	)		(274	)		(327	)			(1,162	)		(1,841	)		6	%
Market value, FX and other(3)		116			132			139			243			87				152			601			(25) %
Ending balance	$	30,086		$	30,762		$	30,905		$	32,772		$	34,961			$	30,086		$	34,961			16	%
Total
Beginning balance	$	82,985		$	85,431		$	87,407		$	87,285		$	89,432			$	75,173		$	85,431			8	%
Contributions(1)		3,091			2,221			2,028			3,007			5,186				15,167			12,442			68	%
Distributions(2)		(1,305	)		(681	)		(2,447	)		(1,671	)		(1,122	)			(5,370	)		(5,921	)		(14) %
Market value, FX and other(3)		660			436			297			811			362				461			1,906			(45) %
Ending balance	$	85,431		$	87,407		$	87,285		$	89,432		$	93,858			$	85,431		$	93,858			10	%

_______________________________

(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.

Asset Class Summary

	Three Months Ended																Percentage Change
(in millions)	March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			March 31, 2024				vs. FQ4'23
FEAUM
Private equity	$	45,766		$	46,539		$	46,464		$	48,258		$	49,869			9	%
Infrastructure		19,274			19,874			20,122			19,789			20,114			4	%
Private debt		14,361			14,865			15,122			15,460			15,477			8	%
Real estate		6,030			6,129			5,577			5,925			8,398			39	%
Total	$	85,431		$	87,407		$	87,285		$	89,432		$	93,858			10	%
Separately managed accounts	$	55,345		$	56,645		$	56,380		$	56,660		$	58,897			6	%
Focused commingled funds		30,086			30,762			30,905			32,772			34,961			16	%
Total	$	85,431		$	87,407		$	87,285		$	89,432		$	93,858			10	%
AUM(1)
Private equity	$	71,611		$	73,511		$	76,031		$	78,221		$	81,942			14	%
Infrastructure		27,285			28,521			28,678			28,307			30,003			10	%
Private debt		26,592			27,099			27,520			27,782			28,491			7	%
Real estate		12,891			13,469			13,612			14,646			16,201			26	%
Total	$	138,379		$	142,600		$	145,841		$	148,956		$	156,637			13	%
Separately managed accounts	$	82,243		$	85,058		$	85,387		$	88,890		$	93,938			14	%
Focused commingled funds		43,062			44,389			46,266			45,508			48,545			13	%
Advisory AUM		13,074			13,153			14,188			14,558			14,154			8	%
Total	$	138,379		$	142,600		$	145,841		$	148,956		$	156,637			13	%
Advisory AUA
Private equity	$	242,461		$	251,880		$	264,327		$	266,246		$	270,350			12	%
Infrastructure		50,700			53,593			55,146			57,528			60,339			19	%
Private debt		17,362			17,525			18,026			17,916			21,976			27	%
Real estate		171,668			173,992			175,369			168,802			168,455			(2	)%
Total	$	482,191		$	496,990		$	512,868		$	510,492		$	521,120			8	%
Total capital responsibility(2)	$	620,570		$	639,590		$	658,709		$	659,448		$	677,757			9	%

_____________________________Note: Amounts may not sum to total due to rounding. AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented, and does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.(1) Allocation of AUM by asset class is presented by underlying investment asset classification.(2) Total capital responsibility equals assets under management (AUM) plus assets under advisement (AUA).

Contacts

Shareholder Relations:Seth Weissshareholders@stepstonegroup.com1-212-351-6106

Media:Brian Ruby / Chris Gillick / Matt Lettiero, ICRStepStonePR@icrinc.com1-203-682-8268

Glossary

Assets under advisement, or “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 March 31, 2024 reflects final data for the prior period (December 31, 2023), adjusted for net new client account activity through March 31, 2024. NAV data for underlying investments is as of December 31, 2023, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2023. When NAV data is not available by the business day occurring on or after 115 days following December 31, 2023, such NAVs are adjusted for cash activity following the last available reported NAV.

Assets under management, or “AUM,” primarily reflects the assets associated with our separately managed accounts (“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.

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 March 31, 2024 reflects final data for the prior period (December 31, 2023), adjusted for net new client account activity through March 31, 2024. NAV data for underlying investments is as of December 31, 2023, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2023. When NAV data is not available by the business day occurring on or after 115 days following December 31, 2023, such NAVs are adjusted for cash activity following the last available reported NAV.

Consolidated Funds refer to the StepStone Funds that we are required to consolidate as of the applicable reporting period. We consolidate funds and other entities in which we hold a controlling financial interest.

Consolidated VIEs refer to the variable interest entities that we are required to consolidate as of the applicable reporting period. We consolidate VIEs in which we hold a controlling financial interest.

Fee-earning AUM, or “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.

Legacy Greenspring entities refers to certain entities for which the Company, indirectly through its subsidiaries, became the sole and/or managing member in connection with the Greenspring acquisition.

SSG refers solely to StepStone Group Inc., a Delaware corporation, and not to any of its subsidiaries.

StepStone Funds refer to SMAs and focused commingled funds of the Company, including acquired Greenspring funds, for which the Partnership or one of its subsidiaries acts as both investment adviser and general partner or managing member.

The Partnership refers solely to StepStone Group LP, a Delaware limited partnership, and not to any of its subsidiaries.

Total capital responsibility equals AUM plus AUA. AUM includes any accounts for which StepStone Group has full discretion over the investment decisions, has responsibility to arrange or effectuate transactions, or has custody of assets. AUA refers to accounts for which StepStone Group provides advice or consultation but for which the firm does not have discretionary authority, responsibility to arrange or effectuate transactions, or custody of assets.

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.