While quarterly revenue reached $588.6 million by 2026Q4, the firm continues to struggle with profitability, evidenced by a negative 3.5% operating margin and heavy reliance on non-cash compensation.
| Sales/Revenue | - | - | - | - | - | - | - | - | - |
| Revenue Growth % | - | - | - | - | - | - | - | - | - |
| Cost of Goods Sold | - | - | - | - | - | - | - | - | - |
| COGS % of Revenue | - | - | - | - | - | - | - | - | - |
| Gross Profit | 1.02B | -89.47M | 381.44M | 171.6M | 576.83M | 384.55M | 206.22M | 116.45M | 117.59M |
| Gross Margin % | 51% | -7.62% | 53.6% | -253.95% | 42.24% | 48.82% | 46.17% | 45.44% | 44.49% |
| Gross Profit Growth % | 1236.36% | -123.45% | 122.28% | -70.25% | 50% | 86.48% | 77.09% | -0.97% | - |
| Operating Expenses | 2.04B | 161.25M | 209.67M | 172.1M | 124.46M | 56.38M | 54.28M | 50.03M | 36.04M |
| OpEx % of Revenue | 102.33% | 13.73% | 29.46% | -254.68% | 9.11% | 7.16% | 12.15% | 19.52% | 13.64% |
| Selling, General & Admin | 2.04B | 161.25M | 209.67M | 172.1M | 124.46M | 56.38M | 54.28M | 50.03M | 36.04M |
| SG&A % of Revenue | 102.33% | 13.73% | 29.46% | -254.68% | 9.11% | 7.16% | 12.15% | 19.52% | 13.64% |
| Research & Development | - | - | - | - | - | - | - | - | - |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | - | - | - | - | - | - | - | - | - |
| Operating Income | -1.02B | -250.72M | 171.77M | -497K | 452.36M | 328.17M | 151.94M | 66.42M | 81.55M |
| Operating Margin % | -51.33% | -21.34% | 24.14% | 0.74% | 33.13% | 41.66% | 34.02% | 25.92% | 30.86% |
| Operating Income Growth % | -308.17% | -245.96% | 34661.57% | -100.11% | 37.84% | 115.98% | 128.76% | -18.55% | - |
| EBITDA | -989.08M | -205.23M | 219.36M | 46.95M | 479.34M | 333.66M | 159.02M | 74.31M | 85.87M |
| EBITDA Margin % | -49.61% | -17.47% | 30.82% | -69.47% | 35.1% | 42.36% | 35.61% | 29% | 32.49% |
| EBITDA Growth % | -381.94% | -193.56% | 367.26% | -90.21% | 43.66% | 109.82% | 114.01% | -13.47% | - |
| D&A (Non-Cash Add-back) | 34.29M | 45.49M | 47.59M | 47.44M | 26.98M | 5.5M | 7.08M | 7.88M | 4.33M |
| EBIT | -917.83M | -250.72M | 204.73M | -37.27M | 513.69M | 345.21M | 158.95M | 71.86M | 86.72M |
| Net Interest Income | -6.67M | -1.85M | -5.67M | -2.27M | -776K | -6.95M | -8.78M | -8.75M | -770K |
| Interest Income | 11.83M | 10.85M | 3.66M | 1.92M | 337K | 413K | 1.44M | 1.51M | 143K |
| Interest Expense | 18.5M | 12.7M | 9.33M | 4.19M | 1.11M | 7.36M | 10.21M | 10.26M | 913K |
| Other Income/Expense | - | - | - | - | - | - | - | - | - |
| Pretax Income | -891.17M | -222.03M | 195.4M | -41.45M | 512.58M | 337.85M | 148.74M | 61.6M | 85.81M |
| Pretax Margin % | -44.7% | -18.9% | 27.46% | 61.35% | 37.54% | 42.89% | 33.3% | 24.04% | 32.47% |
| Income Tax | -147.89M | -49.21M | 27.58M | 3.82M | 28.3M | 23.26M | 3.96M | 1.64M | 1.99M |
| Effective Tax Rate % | 16.6% | 22.16% | 14.11% | -9.22% | 5.52% | 6.88% | 2.66% | 2.66% | 2.31% |
| Net Income | -521.36M | -179.56M | 58.09M | -18.4M | 193.88M | 62.63M | 0 | 0 | 81.44M |
| Net Margin % | -26.15% | -15.28% | 8.16% | 27.23% | 14.2% | 7.95% | - | - | 30.82% |
| Net Income Growth % | -190.35% | -409.11% | 415.75% | -109.49% | 209.55% | - | - | -100% | - |
| Net Income (Continuing) | -743.28M | -172.83M | 167.82M | -45.27M | 484.28M | 314.59M | 144.78M | 59.96M | 83.82M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 1.3B | 1.6B | 1.55B | 881.75M | 1.01B | 410.29M | 20.74M | 16.95M | 38.16M |
| EPS (Diluted) | -6.70 | -2.52 | 0.91 | -0.30 | 3.84 | 2.06 | 4.51 | 2.25 | 3.06 |
| EPS Growth % | -165.87% | -376.92% | 403.33% | -107.81% | 86.41% | -54.32% | 100.44% | -26.47% | - |
| EPS (Basic) | -6.80 | -2.52 | 0.92 | -0.30 | 3.89 | 2.11 | 4.51 | 2.25 | 3.06 |
| Diluted Shares Outstanding | 80.3M | 71.14M | 66.54M | 61.88M | 53.6M | 33.27M | 26.61M | 29.24M | 29.24M |
| Basic Shares Outstanding | 80.3M | 71.14M | 63.49M | 61.88M | 49.83M | 29.66M | 26.61M | 29.24M | 29.24M |
| Dividend Payout Ratio | - | - | 117.87% | - | 12.31% | 3.27% | - | - | 108.5% |
Stock-based compensation dilution
As reported in recent financial statements, StepStone Group achieved significant top-line growth, with quarterly revenue reaching $588.6 million by 2026Q4, representing a substantial expansion from earlier periods, though the sustainability of this trajectory remains tied to the unpredictable nature of performance-related carried interest allocations.
The rapid revenue climb suggests that the firm is successfully scaling its managed solutions and secondaries platforms. However, investors should monitor whether this growth is driven by recurring fee-paying assets or volatile performance fees, as the latter may not represent durable cash-generative capacity.
Based on the provided income statement data, StepStone's gross margins have fluctuated significantly, reaching 57.6% in 2026Q4, while operating margins remain deeply negative, suggesting that the firm's profitability is currently obscured by heavy non-cash charges and aggressive investment in human capital.
The disparity between gross and operating margins implies that the firm is prioritizing scale and talent retention over immediate GAAP profitability. This pattern warrants further investigation into whether these operating losses are temporary accounting artifacts or indicative of a structurally high cost-to-serve model.
According to the firm's quarterly filings, stock-based compensation reached a staggering $1.1 billion in 2026Q4, which fundamentally distorts reported net income and suggests that equity dilution is a primary mechanism for managing the firm's high-cost talent base rather than relying on cash-based incentives.
The massive scale of stock-based compensation relative to revenue suggests that shareholders are bearing a significant dilution burden. This practice makes it difficult to assess the underlying operational efficiency, as the reported net losses appear to be a function of accounting choices rather than pure business failure.
Analysis of the income statement reveals that SG&A expenses have frequently exceeded gross profit, as seen in the 2026Q3 period where SG&A reached $519.4 million, indicating that the firm's current cost structure is not yet optimized for the scale of its operations.
The firm's reliance on high-touch advisory services appears to create a rigid cost base that struggles to leverage revenue growth effectively. Unless management can decouple headcount growth from AUM expansion, the path to sustained GAAP profitability may remain elusive for the foreseeable future.
While the firm reports impressive top-line growth, the persistent operating losses and reliance on non-cash compensation suggest that the current business model may be unsustainable if market conditions for private equity exits deteriorate and force a reversal of previously accrued performance-related fees.
Short-sellers would likely focus on the disconnect between the firm's aggressive revenue growth and its inability to generate positive operating income. This suggests that the market may be overvaluing the firm's growth potential while underestimating the risks associated with its high-cost, equity-dilutive operating structure.
Quick answers to the most common questions about buying STEP stock.
StepStone Group Inc. (STEP) reported a net loss of $521.4M for the fiscal year ending 2026.
StepStone Group Inc. (STEP) reported an operating income of $-1023.4M, resulting in an operating profit margin of -51.3%. This margin reflects the operational efficiency of the business before interest and taxes.
StepStone Group Inc. (STEP) generated $1.02B in gross profit for the year, representing a gross profit margin of 51.0%. This demonstrates the company's core pricing power and production efficiency.