StepStone Group Inc.

participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Seth Weiss, Head of Investor Relations. Please go ahead.

Thank you. Joining me on today's call are Scott Hart, Chief Executive Officer, Jason Ment, President and Co-Chief Operating Officer, Mike McCabe, Head of Strategy, and David Park, Chief Financial Officer. During our prepared remarks, we will be referring to a presentation, which is available on our investor relations website at shareholders.stepstonegroup.com. Before we begin, I'd like to remind everyone that this conference call, as well as the presentation, contain certain forward-looking statements regarding the company's expected operating and financial performance for future periods. Forward-looking statements reflect management's current plans, estimates, and expectations and are inherently uncertain and are subject to various risks, uncertainties, and assumptions. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to changes in circumstances or a number of risks or other factors that are described in the risk factor section of Step Zone's periodic filings. These forward-looking statements are made only as of today, and except as required, we undertake no obligation to update or revise any of them. Today's presentation contains references to non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, our presentation, and our filings with the SEC. Turning to our financial results for the third quarter of fiscal 2026. Beginning with slide three, we reported a GAAP net loss attributable to StepStone Group Incorporated of $123 million, or $1.55 per share. As a reminder, GAAP accounting requires us to factor the change in fair value of the buy-in of the StepStone private wealth profit to interest through our income statement, which drove the negative GAAP earnings result this quarter. Moving to slide five, we generated fee-related earnings of $89 million, up 20% from the prior year quarter, and we generated an FRE margin of 37%. The quarter reflected retroactive fees from our Infrastructure Secondaries Fund and our Multi-Strategy Global Venture Capital Fund. Retroactive fees contributed $1.1 million to revenues, which compares to retroactive fees of $9.7 million in the third quarter of the prior fiscal year. When excluding the impact of retroactive fees, core fee-related earnings were $88 million, up 35 percent relative to the prior year quarter, and core FRE margin remains at 37 percent. We earned $80 million in adjusted net income for the quarter, or 65 cents per share. This is up from $53 million, or 44 cents per share, in the third quarter of the last fiscal year. driven by higher fee-related earnings and higher performance-related earnings. I'll now hand the call over to Scott.

Thank you and good evening. As Seth just highlighted, we generated strong results to cap off a very successful calendar year in 2025. Beginning with our financial performance, we delivered our best quarter ever in core fee-related earnings. We are confident of our earnings trajectory as core FROE continues to grow and as an improving capital market environment may potentially yield stronger realizations over the coming year. While realizations as a percentage of our accrued carry are still below long-term trends, the last two quarters have seen a pickup in activity. When viewing performance fees inclusive of incentive fees, total performance fees were very strong, driven by over $200 million of gross incentive fees related to our spring evergreen fund. The strong incentive fees are a product of growth in the fund and exceptional investment returns of 39% over the year. Notably, less than three percentage points of this performance came from the markup of secondary discounts, with the remaining 36 points of performance coming from returns post the initial markup. Shifting to fundraising, we generated gross AUM additions of over $8 billion in the quarter and over $34 billion for the calendar year, our best 12-month period of fundraising ever. The fundraising is balanced across commercial structure, geography, and strategy. We believe our diversified mix bodes well for continued growth through market cycles. Our managed account fundraising has essentially matched our best 12-month period ever with balance across re-ups, expansions, and new accounts. Re-ups have historically been our largest driver of managed account gross additions, but expansions and new accounts are critical for building the foundation for future re-ups. This past year has been our best year ever for the combination of expansions and new business. In private wealth, we grew the platform to $15 billion and generated over $2.2 billion in new subscriptions for the quarter. Our private equity evergreen funds continue to be standouts. We originated nearly $1 billion of subscriptions across the combination of S-Prime, our all-private markets model portfolio fund, and StepX, our PE fund. We also generated approximately $1 billion of subscriptions in Spring, our venture and growth equity fund. As we've mentioned in prior calls, Spring is a one-of-a-kind product that is in high demand within the private wealth community. Momentum also continues to grow in Strux and Credex, where we continue to build our syndicate of partners. The value proposition of income, yield, and diversification is resonating with our investors. We are comfortably generating more than $2 billion in private wealth subscriptions each quarter. With five fund families in market and with an increasing effort internationally, we believe we have the balance, brand recognition, and track record to continue to grow off this base. Stepping back to the broader firm, we are thrilled with the success of the past year. As we look at our full pipeline of commingled funds, the setup for the coming year may be even more exciting. We are currently in market with our private equity co-investment fund. our private equity secondaries funds, and we just had an initial close on the second vintage of our infrastructure co-investment fund. We expect these funds to execute most of their fundraising over the coming calendar year as well as activate to fee-earning capital. Additionally, we are now in market with our venture capital secondaries fund, and we anticipate that we will be back in market with our special situation real estate secondaries fund and our multi-strategy growth equity fund in the coming quarters. Collectively, the prior vintages of these funds represent over $16 billion of capital, and we are targeting modest growth across each of the funds. Before I conclude, I want to highlight how StepStone is positioned for the continued evolution of artificial intelligence and the significant value creation we expect it to drive for our clients and for our firm. As a leading investor in the innovation economy, we are backing category-defining companies across the AI ecosystem. from native AI platforms to the hardware companies building the compute and storage that power these tools to software companies with proprietary data that enable differentiated high-value outputs. Furthermore, as a diversified private market solutions provider, we can invest across asset classes and capital structures, putting capital to work in essential components of the AI build-out, like data centers and power generation, through our infrastructure, real estate, and private debt strategies. While we anticipate AI will be a huge creator of value, it will undoubtedly be disruptive, creating winners and losers, presenting risks and opportunities. We, like all managers, will not be immune to the risks, but given our highly diversified approach to private marks investing, our track record of partnering with top managers, and our data-driven insights, we expect to be well-positioned on both a relative and absolute basis. As we look forward to the coming year, we have built a solid foundation for private market solutions and will continue to offer and evolve our client-centric offerings. Our results this year are a function of executing this plan, and we believe StepStone is primed to accelerate on this momentum in 2026. I'll now turn the call over to Mike to speak through fundraising in more detail.