Executive Summary
StepStone Group reported a solid opening quarter for 2025 (Q1 2025) with revenue of $186.4 million and a robust gross margin of 57.6%, underscored by an EBITDA margin of approximately 37.3% and an operating margin of 25.3%. Net income was $13.3 million, or $0.20 per diluted share, reflecting a period of strong cash generation amid seasonally softer quarterly activity. Operating cash flow totaled $50.2 million and free cash flow was approximately $49.6 million, supporting a continued focus on liquidity management and potential capital deployment. However, the quarter also highlights seasonality in quarterly revenue, with revenue dropping 47.8% quarter-over-quarter (QoQ) after a high prior quarter, while year-over-year (YoY) revenue rose about 4.7%. The balance sheet remains healthy with total assets of $3.83 billion, a cash balance of $196.2 million, and modest leverage (total debt to capitalization ~44%). Intangible assets and goodwill stand at roughly $875.2 million, signaling ongoing platform investments but also potential impairment risk if market conditions deteriorate. Valuation multiples are notably premium (P/E ~57x, P/B ~8.3x, EV/Revenue ~4.5x), consistent with the growth expectations embedded in a fee-based asset manager with strong cash generation. The results reinforce a defensible earnings base but require monitoring of AUM growth, fundraising cadence, and realized carry for sustained earnings expansion.
Key Performance Indicators
QoQ: -52.12% | YoY:-17.01%
QoQ: -56.76% | YoY:-37.34%
QoQ: -58.33% | YoY:-41.18%
Key Insights
Revenue: $186.401 million, YoY +4.71%, QoQ -47.76%; Gross Profit: $107.341 million, YoY +8.90%, QoQ -31.13%; Operating Income: $47.151 million, YoY -17.01%, QoQ -52.12%; Net Income: $13.328 million, YoY -37.34%, QoQ -56.76%; EPS: $0.20, YoY -41.18%, QoQ -58.33%; EBITDA: $69.520 million, EBITDARatio 0.373; Gross Margin: 57.586%; Operating Margin: 25.295%; Net Margin: 7.150%; Operating Cash Flow: $50.17 million; Free Cash Flow: $49.60 million; Cash at End: $196.17 million; Net Debt: $94.75 million...
Financial Highlights
Revenue: $186.401 million, YoY +4.71%, QoQ -47.76%; Gross Profit: $107.341 million, YoY +8.90%, QoQ -31.13%; Operating Income: $47.151 million, YoY -17.01%, QoQ -52.12%; Net Income: $13.328 million, YoY -37.34%, QoQ -56.76%; EPS: $0.20, YoY -41.18%, QoQ -58.33%; EBITDA: $69.520 million, EBITDARatio 0.373; Gross Margin: 57.586%; Operating Margin: 25.295%; Net Margin: 7.150%; Operating Cash Flow: $50.17 million; Free Cash Flow: $49.60 million; Cash at End: $196.17 million; Net Debt: $94.75 million; Total Assets: $3.83 billion; Total Liabilities: $1.894 billion; Equity: $366.94 million; Current Ratio: 1.14; Debt to Capitalization: 0.442; P/E: 56.77x; P/B: 8.25x; Dividend Yield: 0.787%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
186.40M |
4.71% |
-47.76% |
| Gross Profit |
107.34M |
8.90% |
-31.13% |
| Operating Income |
47.15M |
-17.01% |
-52.12% |
| Net Income |
13.33M |
-37.34% |
-56.76% |
| EPS |
0.20 |
-41.18% |
-58.33% |
Key Financial Ratios
operatingProfitMargin
25.3%
operatingCashFlowPerShare
$0.76
freeCashFlowPerShare
$0.75
dividendPayoutRatio
178.6%
Management Commentary
No earnings call transcript data provided in the dataset. Consequently, management quotes or thematic quotes from the QQ1 2025 earnings call could not be extracted or cited. If transcript access is provided, a thematically organized Highlights section (strategy, operations, market conditions, and inflation/volatility considerations) with direct quotes will be added.
Forward Guidance
No explicit guidance for the remainder of 2025 is captured in the provided data. Given the strong cash generation and moderate leverage, the near-term trajectory will likely hinge on AUM growth, fundraising cadence, and the realization of carried interests. In the absence of definitive guidance, the assessment assumes steady fee-related earnings with potential upside from continued platform expansion (fund-of-funds, secondaries, direct/private markets) and expense discipline. Key factors for investors to monitor: (1) AUM development and fee-related revenue recognition, (2) realization of carried interest and performance fees, (3) fund-raising progress and deployment pace, (4) operating expense trajectory and efficiency gains, (5) impairment risk tied to goodwill/intangible assets in a volatile market environment.