Cash flow generation remains highly volatile and disconnected from accounting results, as demonstrated by a $24.0 million free cash flow outflow in 2026Q4 despite reported revenue growth.
| Cash from Operations | 66.48M | 64.93M | 161.52M | 151.18M | 214.28M | 149.3M | 65.93M | 51.45M | 53.61M |
| Operating CF Margin % | 3.33% | 5.53% | 22.7% | -223.73% | 15.69% | 18.95% | 14.76% | 20.08% | 20.29% |
| Operating CF Growth % | 2.39% | -59.8% | 6.84% | -29.45% | 43.52% | 126.45% | 28.14% | -4.03% | - |
| Net Income | -521.36M | -172.83M | 58.09M | -45.27M | 484.28M | 314.59M | 144.78M | 59.96M | 83.82M |
| Depreciation & Amortization | 45.73M | 45.49M | 47.59M | 47.44M | 26.98M | 5.5M | 7.08M | 7.88M | 4.33M |
| Stock-Based Compensation | 341.96M | 650.13M | 74.69M | 24.94M | 14M | 7.9M | 1.92M | 1.73M | 189K |
| Deferred Taxes | -194.95M | -75.06M | 9.21M | -12.69M | 6.22M | 15.91M | 0 | 0 | 0 |
| Other Non-Cash Items | 395.81M | -363M | -46.95M | 169.53M | -308.56M | -223.85M | -81.49M | -16.44M | -93.81M |
| Working Capital Changes | -706K | -19.81M | 18.89M | -32.76M | -8.63M | 29.25M | -6.35M | -1.68M | 59.08M |
| Change in Receivables | -80.22M | -48.46M | -27.83M | -40.53M | -1.77M | -6.97M | -8.23M | -1.34M | 1.68M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 3.02M | 0 | 0 | 0 |
| Change in Payables | 16.52M | 13.15M | 16.65M | -1.22M | 6.64M | 11.17M | -2.81M | 6.06M | 1.63M |
| Cash from Investing | 732.88M | -43.48M | -47.35M | -30.81M | -210.24M | -11.17M | 35.81M | -61.89M | -6.6M |
| Capital Expenditures | -2.62M | -5.1M | -19.61M | -5.63M | -2.1M | -1.26M | -837K | -3.04M | -3.43M |
| CapEx % of Revenue | 0.13% | 0.43% | 2.76% | -8.33% | 0.15% | 0.16% | 0.19% | 1.19% | 1.3% |
| Acquisitions | - | - | - | - | - | - | - | - | - |
| Investments | 3.75B | 1.23B | 898.1M | 916.43M | 1.44B | 74.38M | 53.39M | 86.66M | 35.53M |
| Other Investing | 1.12B | 39.84M | 17.87M | 9.84M | 13.04M | 4.14M | 5.5M | 4.21M | 2.71M |
| Cash from Financing | 37.44M | 87.48M | -57.98M | -108.02M | -70.44M | -45.31M | -52.17M | -55.52M | 38.82M |
| Debt Issued (Net) | - | - | - | - | - | - | - | - | - |
| Equity Issued (Net) | -3.68M | 22.12M | 12.46M | 0 | 0 | 337.8M | 28K | 157K | 231K |
| Dividends Paid | -117.76M | -75.84M | -68.47M | -49.97M | -23.87M | -2.05M | 0 | 0 | -88.36M |
| Share Repurchases | -8.71M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 158.88M | 16.24M | -51.96M | -93.05M | -111.56M | -234.06M | -50.7M | -54.18M | -8.85M |
| Net Change in Cash | 829.2M | 107.49M | 52.8M | 12.07M | -66.41M | 93.92M | 49.32M | -65.67M | 85.91M |
| Free Cash Flow | 63.86M | 59.83M | 141.91M | 145.56M | 212.18M | 148.04M | 65.09M | 48.41M | 50.18M |
| FCF Margin % | 3.2% | 5.09% | 19.94% | -215.4% | 15.54% | 18.79% | 14.57% | 18.89% | 18.99% |
| FCF Growth % | 6.74% | -57.84% | -2.5% | -31.4% | 43.32% | 127.43% | 34.46% | -3.53% | - |
| FCF per Share | 0.80 | 0.84 | 2.13 | 2.35 | 3.96 | 4.45 | 2.45 | 1.66 | 1.72 |
| FCF Conversion (FCF/Net Income) | -0.13x | -0.36x | 2.78x | -8.22x | 1.11x | 2.38x | - | - | 0.66x |
| Interest Paid | 16.08M | 7.24M | 8.46M | 3.55M | 829K | 3.49M | 9.36M | 9.49M | 792K |
| Taxes Paid | 42.32M | 14.14M | 14.29M | 29.49M | 11.69M | 3.41M | 2.78M | 1.74M | 1.86M |
Stock-based compensation dilution
As reported in recent financial statements, StepStone's operating cash flow frequently diverges from net income, with the 2026Q4 period showing a net loss of $7.8 million alongside a $23.2 million cash outflow, highlighting a disconnect between accounting profitability and the firm's actual cash-generative capacity.
The persistent gap between net income and operating cash flow suggests that GAAP figures are heavily influenced by non-cash items, particularly the massive stock-based compensation charges. Investors should monitor whether this cash burn is a temporary byproduct of aggressive talent acquisition or a structural feature of the firm's compensation-heavy operating model.
Based on quarterly data, StepStone's free cash flow trajectory appears highly erratic, swinging from a peak of $52.4 million in 2025Q2 to a significant $24.0 million outflow by 2026Q4, indicating that the firm's ability to generate sustainable cash is currently tied to unpredictable performance fee cycles.
The lack of a consistent free cash flow margin suggests that the firm's underlying business model remains sensitive to the timing of private market exits. This volatility warrants further investigation into whether the firm can achieve stable cash conversion as its managed solutions platform matures.
According to the provided cash flow data, working capital changes have been a significant source of volatility, with a $37.3 million outflow in 2026Q3 followed by a $39.1 million inflow in 2026Q2, reflecting the inherent complexity of managing cash flows across diverse private market investment vehicles.
These swings in working capital appear to be driven by the timing of fee collections and the settlement of performance-related allocations. The inconsistency in these movements suggests that liquidity management is a critical operational challenge for the firm during periods of rapid AUM expansion.
Financial disclosures indicate that stock-based compensation reached $1.1 billion in 2026Q4, a figure that fundamentally obscures the firm's true cash-based operating performance and suggests that equity dilution is being utilized as a primary substitute for cash-based compensation to preserve the firm's liquid balance sheet.
While this strategy may protect cash reserves in the near term, it creates a significant overhang for minority shareholders through persistent dilution. Analysts should focus on cash-based operating metrics to determine if the firm's core advisory and management services can eventually support the current cost structure without relying on equity-based incentives.
Quick answers to the most common questions about buying STEP stock.
StepStone Group Inc. (STEP) generated $66.5M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
StepStone Group Inc. (STEP) generated $63.9M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
StepStone Group Inc. (STEP) spent $2.6M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, StepStone Group Inc. (STEP) returned $117.8M to shareholders via cash dividends and spent $8.7M on share repurchases. This shows the company's commitment to returning capital to its equity investors.