NEW YORK, May 23, 2024 (GLOBE NEWSWIRE) -- 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