StepStone (STEP) 7 Nov 24 2025 Q2 Earnings call transcript

In a recent earnings call, StepStone Group, a leading global private markets investment firm, reported a strong second quarter performance for the fiscal year 2025. The company, known for its expertise in private equity, real estate, infrastructure, and other asset classes, highlighted several key themes that underscore its financial health and growth trajectory.

Financial Highlights and Trends

StepStone reported GAAP net income of $53.1 million and generated fee-related earnings of $72.3 million, up 65% from the previous year. The company's adjusted net income for the quarter was $53.6 million or $0.45 per share, a significant increase from the previous year. These numbers reflect the company's robust fee-earning assets and the positive impact of retroactive fees from its private equity secondaries fund, special situation real estate secondaries fund, and infrastructure co-investment fund.

The company's financial performance is attributed to its successful fundraising initiatives, including the closing of the fifth vintage of its private equity secondaries fund at a total fund size of $4.8 billion and the generation of nearly $850 million in private wealth subscriptions. These achievements underscore StepStone's ability to capitalize on market opportunities and investor demand.

Future Growth Strategies and Challenges

StepStone's management team outlined several strategic initiatives aimed at sustaining and expanding its market presence. These include continued investments in its private wealth platform, which has evolved into a significant contributor to the company's AUM and earnings growth. The company also plans to expand its investment offerings across various asset classes, such as infrastructure and venture capital, in response to growing market interest and potential for higher returns.

Despite the strong financial performance, StepStone acknowledged the challenges facing the private markets sector, particularly the constraints on liquidity due to the extended period of subdued market activity. The company highlighted the need for innovative solutions to address these challenges, emphasizing its focus on enhancing its secondary market offerings and leveraging technology to optimize liquidity and risk management.

Investor Confidence and Market Outlook

StepStone's earnings call also revealed the positive sentiment from clients and investors, with demand for the company's offerings and solutions remaining high. The company's strong financial performance and strategic initiatives have bolstered investor confidence, setting the stage for continued growth and success in the private markets sector.

In conclusion, StepStone's second quarter fiscal year 2025 earnings call underscored the company's financial strength and strategic vision, demonstrating its ability to navigate market challenges and capitalize on growth opportunities. With a focus on expanding its asset classes, enhancing its technology capabilities, and addressing liquidity challenges, StepStone is well-positioned to continue its growth trajectory and remain a key player in the private markets sector.