StepStone Group’s second quarter results were met with a negative market reaction, as both revenue and adjusted earnings per share came in below Wall Street expectations. Management attributed the quarter’s performance to continued strength in fee-related earnings, driven by robust fundraising across both commingled and managed accounts, as well as the rapid growth of its Private Wealth platform. CEO Scott Hart described the company’s client retention as “enviable” and highlighted expansion in Private Wealth subscriptions, which surpassed $2.8 billion for the quarter. Management also acknowledged that changes in fee structures and the timing of fund activations had a noticeable impact on margins and revenue growth this quarter.
Is now the time to buy STEP? Find out in our full research report (it’s free for active Edge members).
StepStone Group (STEP) Q2 CY2026 Highlights:
- Revenue: $300.6 million vs analyst estimates of $312.8 million (26.6% year-on-year growth, 3.9% miss)
- Adjusted EPS: $0.48 vs analyst expectations of $0.50 (4.8% miss)
- Operating Margin: -68.1%, down from -24.9% in the same quarter last year
- Market Capitalization: $3.96 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From StepStone Group’s Q2 Earnings Call
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Brennan Hawken (BMO): Asked about the impact of fundraising and AUM growth on fee rates. CFO David Park explained fee rates will remain flat near-term due to changes in secondaries fund structures, with potential for growth as Private Wealth expands.
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Kenneth Worthington (JPMorgan): Questioned the management of equity lockups and cash needs related to the Private Wealth buy-in. President Michael McCabe outlined capital management plans, emphasizing conservative leverage and staged equity lockup expirations.
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Benjamin Budish (Barclays): Inquired about the impact of distribution fees from the wealth channel and their implications for margins. Park clarified that these fees are tied to Private Wealth growth and are already incorporated in the company’s run-rate expenses.
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Michael Brown (UBS): Asked about the adoption and fundraising progress of the flagship private equity secondaries fund. CEO Scott Hart noted strong initial fundraising, positive LP feedback, and continued interest in the secondaries market.
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Michael Cyprys (Morgan Stanley): Probed the long-term growth limits of Private Wealth and the monetization potential of data partnerships. Jason Ment, President, expressed confidence in sustained growth given low market penetration and outlined ambitions for data analytics as a future business line.
Catalysts in Upcoming Quarters
In the coming quarters, focus will be on (1) progress toward the buy-in of the Private Wealth profits interest and its financial impact, (2) sustained fundraising momentum and net inflows across the Private Wealth and institutional channels, and (3) the pace of adoption and monetization for new data analytics and benchmarking partnerships. Additional attention will be paid to product launches and international expansion efforts.
StepStone Group currently trades at $48.09, down from $50.33 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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