StepStone Group Inc (STEP) Q1 2026 Earnings Report

StepStone Group reported strong top-line growth for QQ1 2026, with revenue of $366.3 million, up 96.5% year-over-year, and a gross margin of approximately 96.9%. However, GAAP profitability remained elusive as the quarter showed an operating loss of $20.97 million and a net loss of $38.42 million, yielding an EPS of -$0.49. The negative earnings were largely driven by elevated stock-based compensation and expanding operating costs associated with ongoing growth initiatives, despite robust cash flow from operations of $46.28 million and free cash flow of $45.19 million. Net cash from operating activities suggests underlying cash-generation potential, even as dividends and financing activity contributed to a net cash outflow for the period. The balance sheet shows a solid asset base but near-term liquidity metrics are modest (current ratio ~1.0) with a meaningful debt load and sizable goodwill/intangible assets reflecting prior acquisitions. The combination of strong fee-based revenue, discipline around fundraising, and continued investment in platform expansion positions StepStone to capitalize on longer-term AUM growth, albeit with near-term earnings volatility until SBC and growth investments normalize.