StepStone Group Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Index to Consolidated Financial Statements Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 132 Consolidated Balance Sheets as of March 31, 202 5 and 202 4 136 Consolidated Statements of Income (Loss) for the Years Ended March 31, 202 5 , 202 4 and 202 3 138 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended March 31, 202 5 , 202 4 and 202 3 139 Consolidated Statements of Stockholders’ Equity for the Years Ended March 31, 202 5 , 202 4 and 202 3 140 Consolidated Statements of Cash Flows for the Years Ended March 31, 202 5 , 202 4 and 202 3 142 Notes to Consolidated Financial Statements 144 131 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of StepStone Group Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of StepStone Group Inc. (the Company) as of March 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated May 23, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 132 Table of Contents Valuation of underlying investments of equity method investments Description of the Matter The Company has investments in funds of $183.7 million and accrued carried interest allocations of $1,495.7 million as of March 31, 2025. As discussed in Notes 2 and 5 to the consolidated financial statements, a significant input to the measurement of the Company’s investments in funds and accrued carried interest allocations is management’s estimate of the fair value of investments held by the StepStone Funds, specifically investments that are valued using significant unobservable inputs classified as Level III within the fair value hierarchy. Auditing management’s determination of the fair value of Level III investments involved a high degree of auditor subjectivity because these investments exhibit higher estimation uncertainty. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s investment valuation process. This included management’s review controls over the assessment of the valuation techniques and significant unobservable inputs used to estimate the fair value and management’s review of the completeness and accuracy of the data used in these estimates. Our audit procedures included, among others, evaluating, on a sample basis, the valuation techniques and significant unobservable inputs used by the Company and testing the mathematical accuracy of the related valuation models. For example, for a sample of Level III fund investments, we performed procedures to evaluate the significant unobservable inputs such as the selected earnings before interest, taxes, depreciation and amortization multiples or revenue multiples that were derived from comparable companies. These procedures included assessing management’s determination of the comparable companies, and, where applicable, comparing the selected multiples to market observed transactions of such companies. We considered and evaluated information that corroborated or contradicted the significant unobservable inputs or concluded fair value. We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the year-end valuations. Finally, we involved more senior, more experienced audit team members to perform audit procedures related to Level III investments described above. /s/ Ernst & Young LLP We have served as the Company's auditor since 2009. Los Angeles, CA May 23, 2025 133 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of StepStone Group Inc. Opinion on Internal Control Over Financial Reporting We have audited StepStone Group Inc.’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, StepStone Group Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2025, and the related notes and our report dated May 23, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 134 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Los Angeles, CA May 23, 2025 135 Table of Contents StepStone Group Inc. Consolidated Balance Sheets (in thousands, except share and per share amounts) As of March 31, 2025 2024 Assets Cash and cash equivalents $ 244,791 $ 143,430 Restricted cash 502 718 Fees and accounts receivable 80,871 56,769 Due from affiliates 92,723 67,531 Investments: Investments in funds 183,694 135,043 Accrued carried interest allocations 1,495,664 1,354,051 Legacy Greenspring investments in funds and accrued carried interest allocations (1) 629,228 631,197 Deferred income tax assets 382,886 184,512 Lease right-of-use assets, net 91,841 97,763 Other assets and receivables 62,869 60,611 Intangibles, net 263,872 304,873 Goodwill 580,542 580,542 Assets of Consolidated Funds: Cash and cash equivalents 44,511 38,164 Investments, at fair value 415,011 131,858 Other assets 17,688 1,745 Total assets $ 4,586,693 $ 3,788,807 Liabilities and stockholders’ equity Accounts payable, accrued expenses and other liabilities $ 89,731 $ 127,417 Accrued compensation and benefits 736,695 101,481 Accrued carried interest-related compensation 757,968 719,497 Legacy Greenspring accrued carried interest-related compensation (1) 495,739 484,154 Due to affiliates 331,821 212,918 Lease liabilities 113,519 119,739 Debt obligations 269,268 148,822 Liabilities of Consolidated Funds: Other liabilities 17,580 1,645 Total liabilities 2,812,321 1,915,673 Commitments and contingencies (Note 15) Redeemable non-controlling interests in Consolidated Funds 377,897 102,623 Redeemable non-controlling interests in subsidiaries 6,327 115,920 Stockholders’ equity: Class A common stock, $ 0.001 par value, 650,000,000 authorized; 76,761,399 and 65,614,902 issued and outstanding as of March 31, 2025 and 2024, respectively 77 66 Class B common stock, $ 0.001 par value, 125,000,000 authorized; 39,656,954 and 45,030,959 issued and outstanding as of March 31, 2025 and 2024, respectively 40 45 Additional paid-in capital 421,057 310,293 Retained earnings (accumulated deficit) ( 242,546 ) 13,768 Accumulated other comprehensive income 728 304 Total StepStone Group Inc. stockholders’ equity 179,356 324,476 Non-controlling interests in subsidiaries 1,056,510 974,559 Non-controlling interests in legacy Greenspring entities (1) 133,489 147,042 Non-controlling interests in the Partnership 20,793 208,514 Total stockholders’ equity 1,390,148 1,654,591 Total liabilities and stockholders’ equity $ 4,586,693 $ 3,788,807 (1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. See notes 2 and 5 for more information. See accompanying notes to consolidated financial statements. 136 Table of Contents StepStone Group Inc. Consolidated Balance Sheets (in thousands) The following presents the portion of the consolidated balances presented above attributable to consolidated variable interest entities. As of March 31, 2025 2024 Assets Cash and cash equivalents $ 75,769 $ 46,859 Restricted cash 502 718 Fees and accounts receivable 66,692 52,566 Due from affiliates 43,830 23,986 Investments in funds 47,362 39,590 Legacy Greenspring investments in funds and accrued carried interest allocations 629,228 631,197 Deferred income tax assets 275 349 Lease right-of-use assets, net 18,307 16,665 Other assets and receivables 16,859 11,491 Assets of Consolidated Funds: Cash and cash equivalents 44,511 38,164 Investments, at fair value 415,011 131,858 Other assets 17,688 1,745 Total assets $ 1,376,034 $ 995,188 Liabilities Accounts payable, accrued expenses and other liabilities $ 29,484 $ 27,155 Accrued compensation and benefits 699,015 57,487 Legacy Greenspring accrued carried interest-related compensation 495,739 484,154 Due to affiliates 18,072 5,845 Lease liabilities 18,814 17,415 Liabilities of Consolidated Funds: Other liabilities 17,580 1,645 Total liabilities $ 1,278,704 $ 593,701 See accompanying notes to consolidated financial statements. 137 Table of Contents StepStone Group Inc. Consolidated Statements of Income (Loss) (in thousands, except share and per share amounts) Year Ended March 31, 2025 2024 2023 Revenues Management and advisory fees, net $ 767,014 $ 585,140 $ 497,179 Performance fees: Incentive fees 32,275 25,339 9,663 Carried interest allocations: Realized 159,653 49,401 131,089 Unrealized 141,547 126,908 ( 253,342 ) Total carried interest allocations 301,200 176,309 ( 122,253 ) Legacy Greenspring carried interest allocations (1) 74,341 ( 75,157 ) ( 452,163 ) Total performance fees 407,816 126,491 ( 564,753 ) Total revenues 1,174,830 711,631 ( 67,574 ) Expenses Compensation and benefits: Cash-based compensation 331,808 292,962 252,180 Equity-based compensation 669,126 42,357 24,940 Performance fee-related compensation: Realized 94,748 37,687 79,846 Unrealized 94,272 74,694 ( 119,039 ) Total performance fee-related compensation 189,020 112,381 ( 39,193 ) Legacy Greenspring performance fee-related compensation (1) 74,341 ( 75,157 ) ( 452,163 ) Total compensation and benefits 1,264,295 372,543 ( 214,236 ) General, administrative and other 177,354 167,317 147,159 Total expenses 1,441,649 539,860 ( 67,077 ) Other income (expense) Investment income (loss) 15,096 7,452 ( 2,509 ) Legacy Greenspring investment loss (1) ( 1,185 ) ( 9,087 ) ( 44,075 ) Investment income of Consolidated Funds 65,374 28,472 9,315 Interest income 10,850 3,664 1,921 Interest expense ( 12,701 ) ( 9,331 ) ( 4,189 ) Other income (loss) ( 32,650 ) 2,455 ( 1,420 ) Total other income (expense) 44,784 23,625 ( 40,957 ) Income (loss) before income tax ( 222,035 ) 195,396 ( 41,454 ) Income tax expense (benefit) ( 49,208 ) 27,576 3,821 Net income (loss) ( 172,827 ) 167,820 ( 45,275 ) Less: Net income attributable to non-controlling interests in subsidiaries 79,282 37,240 35,194 Less: Net loss attributable to non-controlling interests in legacy Greenspring entities (1) ( 1,185 ) ( 9,087 ) ( 44,075 ) Less: Net income (loss) attributable to non-controlling interests in the Partnership ( 125,850 ) 59,956 ( 19,772 ) Less: Net income attributable to redeemable non-controlling interests in Consolidated Funds 53,731 15,838 1,776 Less: Net income attributable to redeemable non-controlling interests in subsidiaries 758 5,782 — Net income (loss) attributable to StepStone Group Inc. $ ( 179,563 ) $ 58,091 $ ( 18,398 ) Net income (loss) per share of Class A common stock: Basic $ ( 2.52 ) $ 0.91 $ ( 0.30 ) Diluted $ ( 2.52 ) $ 0.91 $ ( 0.30 ) Weighted-average shares of Class A common stock: Basic 71,142,916 63,489,135 61,884,671 Diluted 71,142,916 66,544,038 61,884,671 Dividends declared per share of Class A common stock $ 1.08 $ 1.08 $ 0.80 (1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. See notes 3 and 5 for more information. See accompanying notes to consolidated financial statements. 138 Table of Contents StepStone Group Inc. Consolidated Statements of Comprehensive Income (Loss) (in thousands) Year Ended March 31, 2025 2024 2023 Net income (loss) $ ( 172,827 ) $ 167,820 $ ( 45,275 ) Other comprehensive income (loss): Foreign currency translation adjustment 38 ( 793 ) ( 181 ) Unrealized gain (loss) on defined benefit plan, net 1,179 118 ( 506 ) Total other comprehensive income (loss) 1,217 ( 675 ) ( 687 ) Comprehensive income (loss) before non-controlling interests ( 171,610 ) 167,145 ( 45,962 ) Less: Comprehensive income attributable to non-controlling interests in subsidiaries 79,840 36,912 34,856 Less: Comprehensive loss attributable to non-controlling interests in legacy Greenspring entities ( 1,185 ) ( 9,087 ) ( 44,075 ) Less: Comprehensive income (loss) attributable to non-controlling interests in the Partnership ( 125,615 ) 59,805 ( 19,925 ) Less: Comprehensive income attributable to redeemable non-controlling interests in Consolidated Funds 53,731 15,838 1,776 Less: Comprehensive income attributable to redeemable non-controlling interests in subsidiaries 758 5,782 — Comprehensive income (loss) attributable to StepStone Group Inc. $ ( 179,139 ) $ 57,895 $ ( 18,594 ) See accompanying notes to consolidated financial statements. 139 Table of Contents StepStone Group Inc. Consolidated Statements of Stockholders’ Equity (in thousands) Class A Common Stock Class B Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Non-Controlling Interests in Subsidiaries Non-Controlling Interests in Legacy Greenspring Entities Non-Controlling Interests in the Partnership Total Stockholders’ Equity Balance at March 31, 2022 $ 61 $ 48 $ 587,243 $ 229,615 $ 658 $ 32,063 $ 194,480 $ 780,162 $ 1,824,330 Net income (loss) — — — ( 18,398 ) — 35,194 ( 44,075 ) ( 19,772 ) ( 47,051 ) Other comprehensive loss — — — — ( 196 ) ( 338 ) — ( 153 ) ( 687 ) Contributed capital — — — — — 142 13,387 37 13,566 Equity-based compensation — — 8,889 — — 388 — 7,112 16,389 Distributions — — — — — ( 31,070 ) ( 11,134 ) ( 78,439 ) ( 120,643 ) Dividends declared — — — ( 50,787 ) — — — — ( 50,787 ) Vesting of RSUs, net of shares withheld for employee taxes — — ( 1,524 ) — — — — ( 1,219 ) ( 2,743 ) Exchange of Class B and Class C units for Class A common stock and redemption of corresponding Class B common shares 2 ( 2 ) ( 1 ) — — — — — ( 1 ) Equity reallocation between controlling and non-controlling interests — — 19,546 — ( 1 ) 1 — ( 19,546 ) — Deferred tax effect resulting from equity transactions affecting ownership in the Partnership (1) — — ( 3,586 ) — — — — — ( 3,586 ) Balance at March 31, 2023 63 46 610,567 160,430 461 36,380 152,658 668,182 1,628,787 Net income (loss) — — — 58,091 — 37,240 ( 9,087 ) 59,956 146,200 Other comprehensive loss — — — — ( 196 ) ( 328 ) — ( 151 ) ( 675 ) Contributed capital — — — — — — 12,460 43 12,503 Equity-based compensation — — 10,771 — — 674 — 8,236 19,681 Distributions — — — — — ( 39,573 ) ( 8,989 ) ( 57,768 ) ( 106,330 ) Dividends declared — — — ( 70,346 ) — — — — ( 70,346 ) Vesting of RSUs, net of shares withheld for employee taxes 1 — ( 392 ) — — — — ( 304 ) ( 695 ) Exchange of Class B and Class C units for Class A common stock and redemption of corresponding Class B common shares 2 ( 1 ) ( 2 ) — — — — — ( 1 ) Sale of non-controlling interests — — 851 — — 1,553 — 641 3,045 Equity reallocation between controlling and non-controlling interests — — 21,277 — 39 ( 2,881 ) — ( 18,435 ) — Deferred tax effect resulting from equity transactions affecting ownership in the Partnership (1) — — 132,560 — — — — — 132,560 Reclassification and adjustment of non-controlling interests in subsidiaries to redeemable equity at redemption value — — ( 465,339 ) ( 134,407 ) — ( 34,860 ) — ( 451,886 ) ( 1,086,492 ) Reclassification of non-controlling interests in subsidiaries from redeemable equity — — — — — 976,354 — — 976,354 Balance at March 31, 2024 $ 66 $ 45 $ 310,293 $ 13,768 $ 304 $ 974,559 147,042 $ 208,514 $ 1,654,591 (1) See notes 11 and 14 for more information. See accompanying notes to consolidated financial statements. 140 Table of Contents StepStone Group Inc. Consolidated Statements of Stockholders’ Equity (in thousands) Class A Common Stock Class B Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income Non-Controlling Interests in Subsidiaries Non-Controlling Interests in Legacy Greenspring Entities Non-Controlling Interests in the Partnership Total Stockholders’ Equity Balance at March 31, 2024 $ 66 $ 45 $ 310,293 $ 13,768 $ 304 $ 974,559 $ 147,042 $ 208,514 $ 1,654,591 Net income (loss) — — — ( 179,563 ) — 79,282 ( 1,185 ) ( 125,850 ) ( 227,316 ) Other comprehensive income — — — — 424 558 — 235 1,217 Contributed capital — — — — — 8,773 19,603 3 28,379 Equity-based compensation — — 9,847 — — 816 — 6,659 17,322 Distributions — — — — — ( 49,789 ) ( 31,971 ) ( 79,490 ) ( 161,250 ) Dividends declared — — — ( 76,751 ) — — — — ( 76,751 ) Vesting of RSUs, net of shares withheld for employee taxes 1 — ( 897 ) — — — — ( 576 ) ( 1,472 ) Class A common stock issued under ESPP — — 1,585 — — — — 936 2,521 Exchange of Class B, Class C and Class D units for Class A common stock and redemption of corresponding Class B common shares 10 ( 8 ) ( 10 ) — — — — — ( 8 ) Vesting of Class B2 units and issuance of corresponding Class B common stock at par value — 3 — — — — — — 3 Purchase of non-controlling interests — — ( 3,149 ) — — — — ( 2,249 ) ( 5,398 ) Settlement of non-controlling interests related to awards of carried interest allocations — — — — — 54,977 — — 54,977 Redemption of redeemable non-controlling interests in subsidiaries — — 55,879 — — — — 41,504 97,383 Equity reallocation between controlling and non-controlling interests — — 41,559 — — ( 12,666 ) — ( 28,893 ) — Deferred tax effect resulting from equity transactions affecting ownership in the Partnership (1) — — 5,950 — — — — — 5,950 Balance at March 31, 2025 $ 77 $ 40 $ 421,057 $ ( 242,546 ) $ 728 $ 1,056,510 $ 133,489 $ 20,793 $ 1,390,148 (1) See notes 11 and 14 for more information. See accompanying notes to consolidated financial statements. 141 Table of Contents StepStone Group Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended March 31, 2025 2024 2023 Cash flows from operating activities Net income (loss) $ ( 172,827 ) $ 167,820 $ ( 45,275 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 45,489 47,588 47,443 Unrealized carried interest allocations and investment (income) loss ( 148,508 ) ( 127,815 ) 261,354 Unrealized legacy Greenspring carried interest allocations and investment loss ( 2,090 ) 149,293 577,484 Unrealized performance fee-related compensation 94,272 74,694 ( 119,039 ) Unrealized legacy Greenspring performance fee-related compensation 11,211 ( 134,906 ) ( 526,837 ) Amortization of deferred financing costs 847 472 472 Equity-based compensation 650,132 39,448 24,940 Change in deferred income taxes ( 75,061 ) 9,212 ( 12,692 ) Fair value adjustment for acquisition-related contingent consideration 15,776 16,809 9,361 Gain on remeasurement of lease liabilities — ( 106 ) ( 2,709 ) Loss on sale of subsidiary — 812 — Payments for acquisition-related contingent consideration ( 51,456 ) — — Other non-cash activities 103 579 40 Adjustments to reconcile net income to net cash provided by operating activities of Consolidated Funds: Unrealized investment income of Consolidated Funds ( 62,192 ) ( 26,147 ) ( 9,312 ) Purchases of investments of Consolidated Funds ( 226,160 ) ( 77,144 ) ( 21,287 ) Proceeds from sale of investments of Consolidated Funds 5,199 2,028 4 Changes in operating assets and liabilities: Fees and accounts receivable ( 24,102 ) ( 12,349 ) ( 10,309 ) Due from affiliates ( 24,355 ) ( 15,484 ) ( 30,222 ) Other assets and receivables 1,024 10,705 ( 3,212 ) Accounts payable, accrued expenses and other liabilities 13,151 16,646 ( 1,216 ) Accrued compensation and benefits 3,583 16,458 11,160 Due to affiliates 11,158 815 ( 765 ) Lease right-of-use assets, net and lease liabilities ( 298 ) 1,988 2,006 Changes in operating assets and liabilities of Consolidated Funds: Other assets and receivables ( 15,943 ) ( 973 ) ( 772 ) Other liabilities and payables 15,975 1,079 566 Net cash provided by operating activities 64,928 161,522 151,183 Cash flows from investing activities Contributions to investments ( 58,613 ) ( 23,380 ) ( 21,637 ) Distributions received from investments 15,805 4,412 5,280 Contributions to investments in legacy Greenspring entities ( 19,603 ) ( 12,460 ) ( 13,387 ) Distributions received from investments in legacy Greenspring entities 24,035 3,688 4,563 Purchases of property and equipment ( 5,100 ) ( 19,607 ) ( 5,627 ) Other investing activities 1 — 1 Net cash used in investing activities ( 43,475 ) ( 47,347 ) ( 30,807 ) See accompanying notes to consolidated financial statements. 142 Table of Contents StepStone Group Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended March 31, 2025 2024 2023 Cash flows from financing activities Proceeds from capital contributions from non-controlling interests $ 8,776 $ 43 $ 179 Purchase of non-controlling interests ( 5,398 ) — — Redemption of redeemable non-controlling interests ( 12,968 ) — — Proceeds from sale of non-controlling interests — 3,045 — Proceeds from revolving credit facility 125,000 50,000 35,000 Proceeds from issuance of Class A common stock of shares under ESPP 2,521 — — Proceeds from issuance of notes payable 175,000 — — Deferred financing costs ( 5,401 ) — — Payments on revolving credit facility ( 175,000 ) — — Distributions to non-controlling interests ( 129,279 ) ( 97,341 ) ( 109,509 ) Proceeds from capital contributions to legacy Greenspring entities 19,603 12,460 13,387 Distributions to non-controlling interests in legacy Greenspring entities ( 31,971 ) ( 8,989 ) ( 11,134 ) Payments for acquisition-related contingent consideration ( 17,769 ) — — Dividends paid to common stockholders ( 75,840 ) ( 68,474 ) ( 49,973 ) Payments for employee taxes related to net settlement of RSUs ( 1,472 ) ( 695 ) ( 2,743 ) Payments to related parties under Tax Receivable Agreements ( 9,819 ) ( 10,281 ) ( 5,981 ) Other financing activities ( 5 ) ( 1 ) ( 1 ) Cash flows from financing activities of Consolidated Funds: Proceeds from borrowings on fund credit facility 7,872 — — Payments on fund credit facility ( 7,912 ) — — Contributions from redeemable non-controlling interests in Consolidated Funds 240,256 62,255 22,754 Redemptions of redeemable non-controlling interests in Consolidated Funds ( 18,713 ) — — Net cash provided by (used in) financing activities 87,481 ( 57,978 ) ( 108,021 ) Effect of foreign currency exchange rate changes ( 1,442 ) ( 3,402 ) ( 287 ) Net increase in cash, cash equivalents and restricted cash 107,492 52,795 12,068 Cash, cash equivalents and restricted cash at beginning of period 182,312 129,517 117,449 Cash, cash equivalents and restricted cash at end of period $ 289,804 $ 182,312 $ 129,517 Supplemental disclosures: Interest paid $ 7,237 $ 8,462 $ 3,551 Taxes paid 14,145 14,289 29,487 Non-cash operating, investing, and financing activities: Accrued dividends $ 911 $ 1,872 $ 814 Deferred tax effect resulting from transactions affecting ownership in the Partnership, including net amounts payable under Tax Receivable Agreements 5,950 132,560 ( 3,586 ) Establishment of lease liabilities in exchange for lease right-of-use assets — 5,501 77,347 Remeasurement of lease liabilities — — ( 18,166 ) Issuance of note related to sale of subsidiary — 8,436 — Reclassification and adjustment of non-controlling interests in subsidiaries to redeemable equity at redemption value — 1,086,492 — Settlement of non-controlling interests related to awards of carried interest allocations 54,977 — — Equity issued for redemption of redeemable non-controlling interests 97,383 — — Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 244,791 $ 143,430 $ 102,565 Restricted cash 502 718 955 Cash and cash equivalents of Consolidated Funds 44,511 38,164 25,997 Total cash, cash equivalents and restricted cash $ 289,804 $ 182,312 $ 129,517 See accompanying notes to consolidated financial statements. 143 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) 1. Organization StepStone Group Inc. (“SSG”) was incorporated in the state of Delaware on November 20, 2019 and, following its initial public offering in 2020, acts as a holding company for StepStone Group LP (the “Partnership”). SSG is the sole managing member of StepStone Group Holdings LLC (the “General Partner”), the general partner of the Partnership. Unless otherwise specified, “StepStone” or the “Company” refers to SSG and its consolidated subsidiaries, including the Partnership, throughout the remainder of these notes to the consolidated financial statements. The Company is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. The Company’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, including high-net-worth and mass affluent individuals. The Company 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. These portfolios utilize several types of synergistic investment strategies with third-party fund managers, including commitments to funds (“primaries”), acquiring stakes in existing funds on the secondary market (“secondaries”) and investing directly into companies (“co-investments”). The Company, through its subsidiaries, acts as the investment advisor and general partner or managing member to separately managed accounts (“SMAs”) and focused commingled funds (collectively, the “StepStone Funds”). SSG is a holding company whose principal asset is a controlling financial interest in the Partnership through its ownership of all of the Partnership’s Class A units and 100 % of the membership interests in the General Partner of the Partnership. SSG acts as the sole managing member of the General Partner of the Partnership and, as a result, indirectly operates and controls all of the Partnership’s business and affairs. As a result, SSG consolidates the financial results of the Partnership and reports non-controlling interests related to the Class B, Class C and Class D units of the Partnership which are not owned by SSG. The assets and liabilities of the Partnership represent substantially all of SSG’s consolidated assets and liabilities, with the exception of certain deferred income taxes and payables due to affiliates pursuant to tax receivable agreements (see note 11). Each share of Class A common stock is entitled to one vote and each share of Class B common stock is entitled to five votes. As of March 31, 2025, SSG held approximately 64.6 % of the economic interest in the Partnership. As the Partnership’s limited partners exchange their Class B, Class C and Class D units into SSG’s Class A common stock in the future, SSG’s economic interest in the Partnership will increase relative to that of the Class B, Class C and Class D unitholders. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the Company, its wholly-owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany balances and transactions have been eliminated in consolidation. Certain of the StepStone Funds are investment companies that follow specialized accounting under GAAP and reflect their investments at estimated fair value. Accordingly, the carrying value of the Company’s equity method investments in such entities retains the specialized accounting. 144 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management’s estimates and assumptions are based on historical experience and other factors, and these estimates and assumptions require management to exercise judgment in the process of applying the Company’s accounting policies. Factors that may affect or influence management’s estimates and assumptions could include expectations related to future events that management has deemed reasonable under the circumstances. Assumptions and estimates related to the valuation of investments, which directly affect carried interest allocations, carried interest related compensation, and the carrying amount of the Company’s equity in affiliated companies, involve a higher degree of judgment and complexity, and these assumptions and estimates may significantly affect the consolidated financial statements. Actual results could differ from these estimates and those differences may be material. Consolidation The Company consolidates all entities that it controls through a majority voting interest or as the primary beneficiary of a variable interest entity (“VIE”). Under the VIE model, management first assesses whether the Company has a variable interest in an entity. In evaluating whether the Company holds a variable interest, fees received as a decision maker or in exchange for services (including management fees, incentive fees and carried interest allocations) that are customary and commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, are not considered variable interests. If the Company has a variable interest in an entity, management further assesses whether that entity is a VIE, and if so, whether the Company is the primary beneficiary under the VIE model. Entities that do not qualify as VIEs are assessed for consolidation under the voting interest model. The consolidation analysis can generally be performed qualitatively; however, in certain situations a quantitative analysis may also be performed. Investments and redemptions (either by the Company, affiliates of the Company or third parties) or amendments to the governing documents of the respective StepStone Funds that are VIEs could affect the entity’s status as a VIE or the determination of the primary beneficiary. Under the VIE model, an entity is deemed to be the primary beneficiary of a VIE if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly affect the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. When assessing whether the Company is the primary beneficiary of a VIE, management evaluates whether the Company’s involvement, through holding interests directly or indirectly in an entity or contractually through other variable interests, would give the Company a controlling financial interest. This analysis includes an evaluation of the Company’s control rights, as well as the economic interests that the Company holds in the VIE, including indirectly through related parties. 145 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The Company provides investment advisory services to the StepStone Funds, which have third-party clients. These funds are investment companies and are typically organized as limited partnerships or limited liability companies for which the Company, through its operating subsidiaries, acts as the general partner or managing member. A limited partnership or similar entity is a VIE if the unaffiliated limited partners or members do not have substantive rights to terminate or liquidate the fund or remove the general partner or substantive rights to participate. Certain StepStone Funds are VIEs because they have not granted unaffiliated limited partners or members substantive rights to terminate the fund or remove the general partner or substantive rights to participate. The Company does not consolidate these StepStone Funds because it is not the primary beneficiary of those funds, primarily because it does not hold an interest in those funds that is considered more than insignificant and its fee arrangements are considered customary and commensurate. The Company has determined that certain of its operating subsidiaries, including StepStone Group Real Assets LP (“SRA”), StepStone Group Real Estate LP (“SRE”), StepStone Group Private Debt AG (former ly Swiss Capital Alternative Investments AG) (“SPD”), and StepStone Group Private Wealth LLC (“SPW”) and certain StepStone Funds are VIEs, and that the Company is the primary beneficiary of each entity because it has a controlling financial interest in each entity; accordingly, the Company consolidates these entities. The assets and liabilities of the consolidated VIEs are presented gross in the consolidated balance sheets. The assets of the consolidated VIEs may only be used to settle obligations of the consolidated VIEs. See note 4 for more information on both consolidated and unconsolidated VIEs. In connection with the acquisition of Greenspring Associates Inc. and certain of its affiliates (“Greenspring”) that was completed on September 20, 2021 (the “Greenspring acquisition”), the Company, indirectly through its subsidiaries, became the sole and/or managing member of certain entities, each of which is the general partner of an investment fund (“legacy Greenspring general partner entities”). The Company did not acquire any direct economic interests attributable to the legacy Greenspring general partner entities, including legacy Greenspring investments in funds and carried interest allocations. However, certain arrangements negotiated as part of the acquisition represent variable interests that could be significant. The Company determined that the legacy Greenspring general partner entities are VIEs and it is the primary beneficiary of each such entity because it has a controlling financial interest in each entity. As a result, the Company consolidates these entities. The Company and its subsidiaries manages or controls certain entities that constitute client investment funds that have been consolidated in the accompanying consolidated financial statements (“Consolidated Funds”). Including the results of the Consolidated Funds increases the reported amounts of the assets, liabilities, expenses and cash flows in the accompanying consolidated financial statements, and amounts related to economic interests held by third-party investors are reflected as redeemable non-controlling interests in Consolidated Funds. The revenues earned by the Company as investment manager of the Consolidated Funds are eliminated in consolidation and generally have no direct effect on the net income attributable to SSG or to Stockholders' Equity. Non-Controlling Interests Non-controlling interests (“NCI”) reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by the Company. Non-controlling interests are presented as separate components of stockholders’ equity on the Company’s consolidated balance sheets to clearly distinguish between the Company’s interests and the economic interests of third parties and employees in those entities. Net income (loss) attributable to SSG, as reported in the consolidated statements of income (loss), is presented net of the portion of net income (loss) attributable to holders of non-controlling interests. See note 14 for more information on ownership interests in the Company. 146 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees. Non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss. Non-controlling interests in legacy Greenspring entities represent the economic interests in the legacy Greenspring general partner entities. The Company did not acquire any direct economic interests in the legacy Greenspring general partner entities. As a result, all of the net income (loss) attributable to the legacy Greenspring general partner entities is allocated to non-controlling interests in legacy Greenspring entities. Non-controlling interests in the Partnership represent the economic interests related to the Class B, Class C and Class D units of the Partnership which are not owned by SSG. Non-controlling interests in the Partnership are allocated a share of income or loss in the Partnership in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss. Redeemable non-controlling interests in Consolidated Funds represent the economic interests in the Consolidated Funds which are not held by SSG, but are held by the client investors in the funds. These interests are presented as redeemable non-controlling interests in Consolidated Funds within the consolidated balance sheets, outside of permanent capital as the investors in these funds generally have the right to withdraw their capital, subject to the terms of the respective contractual agreements. Redeemable non-controlling interests in Consolidated Funds are allocated a share of income or loss in the respective fund in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss. Redeemable non-controlling interests in subsidiaries represent the redeemable economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees in those entities that were established in connection with the Transaction Agreements as described in note 14. Redeemable non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss. Accounting for Differing Fiscal Periods The StepStone Funds primarily have a fiscal year end as of December 31. The Company accounts for its investments in the StepStone Funds on a three-month lag due to the timing of receipt of financial information from the investments held by the StepStone Funds. The StepStone Funds primarily invest in private markets funds that generally require at least 90 days following the calendar year end to provide audited financial statements. As a result, the Company uses the December 31 audited financial statements of the StepStone Funds, which reflect the underlying private markets funds as of December 31, to record its investments (including any carried interest allocated by those investments) for its fiscal year-end consolidated financial statements as of March 31. The Company further adjusts the reported carrying values of its investments in the StepStone Funds for its share of capital contributions to and distributions from the StepStone Funds during the three-month lag period. The Company does not account for management and advisory fees or incentive fees on a three-month lag. To the extent that management becomes aware of any material events that affect the StepStone Funds during the three-month lag period, the effect of the events would be disclosed in the notes to the consolidated financial statements. 147 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Current Events In 2024, signs of easing inflation coupled with the expansion of economic activity at a sustained pace and low unemployment rates contributed to positive returns in most financial markets despite inflation remaining elevated. Between September 2024 and December 2024, the Federal Reserve announced several decisions to lower the target range for the federal funds rate ultimately to a range of 4.25% to 4.50% in response to positive trends in economic data, including a measure of inflation. In 2025, financial markets experienced significant volatility largely in response to the uncertainty of the economic impact from U.S. trade policy developments including announcement of the implementation of increases on tariffs charged by the U.S. on certain imports. The U.S. economy experienced a slowdown, moving from expansion in the last quarter of 2024 to a slight contraction in the first quarter of 2025. The Company is continuing to closely monitor developments related to inflation, decreasing but still elevated interest rates, trade, regulatory and other governmental policy, banking system volatility, geopolitical tension, unrest or conflicts, including in or with China, Russia, Ukraine, and the Middle East, and assess the impact on financial markets and the Company’s business. The Company’s results and the overall industry results have been and may continue to be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which have resulted in, and may continue to result in, delayed or decreased management fees. Further, fund managers have been unable or less able to exit existing investments profitably. Such conditions have resulted in, and may continue to result in, delayed or decreased performance fee revenues. It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy and the Company’s consolidated financial statements. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash held in banks, money market funds and highly-liquid investments with original maturities of three months or less at the time of purchase. Restricted cash consists of cash that the Company is contractually obligated to maintain to secure its letters of credit used primarily related to its office facilities and other obligations. Cash and Cash Equivalents of Consolidated Funds Cash and cash equivalents held at the Consolidated Funds consist of cash and cash equivalents held by the Consolidated Funds, which, although not legally restricted, is not available to fund the general liquidity needs of the Company. Fees and Accounts Receivable Fees and accounts receivable represent contractual amounts due to the Company for management, advisory and incentive fees, net of allowances as applicable. The Company considers fees and accounts receivable to be fully collectible. Accordingly, no allowance for doubtful accounts has been established as of March 31, 2025 and 2024. If any accounts or portion thereof are deemed uncollectible, such amounts are expensed when that determination is made. Due from Affiliates Due from affiliates primarily relates to fees and accounts receivable from the StepStone Funds, advances made on behalf of the StepStone Funds for the payment of certain organization and operating costs and expenses for which the Company is subsequently reimbursed, amounts due from employees and loans due from affiliated entities. See note 13 for further disclosure of related party transactions. 148 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Fair Value Measurements GAAP establishes a hierarchical disclosure framework, which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace – including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and therefore a lesser degree of judgment is used in measuring their fair value. Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of their fair values, as follows: • Level I – Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date. • Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies. The types of financial instruments classified in this category include less liquid securities traded in active markets and securities traded in other than active markets. • Level III – Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the financial instrument. The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for financial instruments categorized in Level III. The variability and availability of the observable inputs affected by the factors described above may result in transfers between Levels I, II, and III. The Company considers its cash, cash equivalents, restricted cash, fees and accounts receivable, accounts payable, investments, notes payable, revolving credit facility and contingent consideration obligation balance to be financial instruments. The carrying amounts of cash, cash equivalents, restricted cash, fees and accounts receivable and accounts payable equal or approximate their fair values due to their nature and/or the relatively short period over which they are held. See note 6 for additional details regarding the fair value of the Company’s contingent consideration obligation balance and see note 9 for additional details regarding the fair value of the Company’s notes payable and revolving credit facility balances. 149 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Investments Investments primarily include the Company’s ownership interests in the StepStone Funds, as general partner or managing member of such funds. The Company accounts for all investments in which it has or is otherwise presumed to have significant influence, but not control, including the StepStone Funds, using the equity method of accounting. The carrying value of these equity method investments is determined based on amounts invested by the Company, adjusted for the Company’s share in the earnings or losses of each investee, after consideration of contractual arrangements that govern allocations of income or loss (including carried interest allocations), less distributions received. Investments include the Company’s cumulative accrued carried interest allocations from the StepStone Funds, which primarily represent performance-based capital allocations, assuming the StepStone Funds were liquidated as of each reporting date in accordance with the funds’ governing documents. Legacy Greenspring investments in funds and accrued carried interest allocations represent the economic interests held by the legacy Greenspring general partner entities in certain funds for which the Company does not have any direct economic interests. All of the economics in respect of such interests are payable to employees and are therefore reflected as non-controlling interests in legacy Greenspring entities and legacy Greenspring performance fee-related compensation. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Management’s determination of fair value for investments in the underlying funds includes various valuation techniques. These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted average cost of capital, exit multiples, or terminal growth rates. Investments of Consolidated Funds The Company’s Consolidated Funds are investment companies under GAAP and reflect their investments at estimated fair value. The Company has retained the specialized investment company accounting for the Consolidated Funds under GAAP. Investments of the Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in fair value is recognized in the consolidated statements of income (loss). In addition, the Consolidated Funds do not consolidate their majority-owned and controlled investments in underlying portfolio companies. Leases The Company determines whether an arrangement contains a lease at inception of the arrangement. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines the classification as either an operating or finance lease. The Company’s identified leases primarily consist of operating lease agreements for office space and certain equipment, as the lessee. Operating leases are included in lease right-of-use-assets, net and lease liabilities in the consolidated balance sheets. Certain leases include lease and non-lease components, which the Company accounts for as a single lease component. Lease right-of-use (“ROU”) assets and lease liabilities are measured based on the present value of future minimum lease payments over the lease term at the commencement date. Lease ROU assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. The Company uses its incremental borrowing rate in determining the present value of future minimum lease payments. The Company’s lease terms may include options to extend or terminate the lease, which are included in the measurement of ROU assets and lease liabilities when it is reasonably certain that the Company will exercise those options. Operating lease expense associated with minimum lease payments is recognized on a straight-line basis over the lease term in general, administrative and other expenses in the consolidated statements of income (loss). Minimum lease payments for leases with an initial term of twelve months or less are not recorded in the consolidated balance sheets. See note 15 for more information. 150 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Property and Equipment Property and equipment primarily consist of leasehold improvements, furniture, equipment, computer hardware and software and are stated at cost, less accumulated depreciation and amortization, with the net carrying amount included in other assets and receivables in the consolidated balance sheets. Property and equipment are depreciated over their estimated useful lives using the straight-line method, and the corresponding depreciation expense is included in general, administrative and other expenses in the consolidated statements of income (loss). Property and equipment are depreciated over a period of five to seven years . Leasehold improvements are amortized over the shorter of their useful lives or remaining lease terms. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The Company did not recognize any impairment charges related to property and equipment during each of the fiscal years ended March 31, 2025, 2024 and 2023. Foreign Currency The Company consolidates certain entities that have a non-U.S. dollar functional currency. Non-U.S. dollar denominated assets and liabilities are translated using the exchange rates prevailing at the end of each reporting period and income and expenses are translated using the weighted-average exchange rate for each reporting period. Cumulative translation adjustments arising from the translation of non-U.S. dollar denominated entities are included in other comprehensive income (loss) within the consolidated financial statements until realized. Gains and losses resulting from foreign-currency transactions denominated in a currency other than an entity’s functional currency are reported in other income (loss) in the consolidated statements of income (loss). These transaction gains (losses) totaled $( 0.4 ) million, $( 1.4 ) million and $( 1.6 ) million for the years ended March 31, 2025, 2024 and 2023, respectively. Business Combinations The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of an acquisition is allocated to the assets acquired and liabilities assumed based on their fair values, as determined by management at the acquisition date. Contingent consideration obligations that are elements of consideration transferred are recognized at the acquisition date as part of the fair value transferred in exchange for the acquired business. Contingent consideration arrangements are revalued to fair value each reporting period. Examples of critical estimates in valuing certain of the intangible assets acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life, discount rates and income tax rates. Acquisition-related costs incurred in connection with a business combination are expensed as incurred and are included in general, administrative and other expenses in the consolidated statements of income (loss). Intangibles and Goodwill The Company’s finite-lived intangible assets consist of acquired contractual rights to earn future management and advisory fee income and client relationships. Finite-lived intangible assets are amortized over their estimated useful lives, which range from 8 to 10 years. The Company did not have any intangible assets that were deemed to have an indefinite life as of March 31, 2025. Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. There were no impairment charges related to the Company’s finite-lived intangible assets during the years ended March 31, 2025, 2024 and 2023. 151 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Goodwill represents the excess amount of consideration transferred in a business combination above the fair value of the identifiable net assets. Goodwill is assessed for impairment at least annually using a qualitative and, if necessary, a quantitative approach. The Company performs its annual goodwill impairment test as of January 1, or more frequently, if events and circumstances indicate that an impairment may exist. Goodwill is tested for impairment at the reporting unit level. The initial assessment for impairment under the qualitative approach is to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, a quantitative assessment is performed to measure the amount of impairment loss, if any. The quantitative assessment includes comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized equal to the lesser of (a) the difference between the carrying amount of the reporting unit and its fair value and (b) the total carrying amount of the reporting unit’s goodwill. The Company performed annual goodwill impairment assessments as of January 1, 2025 and 2024 and determined that there was no impairment of goodwill as of either date. Revenues The Company recognizes revenue in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers . Revenue is recognized in a manner that depicts the transfer of promised goods or services to customers and for an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The application of ASC 606 requires an entity to identify its contract(s) with a customer, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, variable consideration is included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The Company has elected to apply the variable consideration allocation exception for its fee arrangements with its customers. Management and Advisory Fees, Net The Company earns management fees for services provided to its SMAs and focused commingled funds. The Company earns advisory fees for services provided to advisory clients where the Company does not have discretion over investment decisions. The Company considers its performance obligations in its customer contracts from which it earns management and advisory fees to be one or more of the following, based on the services promised: asset management services, advisory services and/or the arrangement of administrative services. Management fees include income-based incentive fees, which are based on net investment income of certain funds. The Company recognizes revenues from asset management services and advisory services when control of the promised services is transferred to customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. SMAs are generally contractual arrangements involving an investment management agreement between the Company and a single client, and are typically structured as a partnership or limited liability company for which a subsidiary of SSG serves as the general partner or managing member. Focused commingled funds are structured as limited partnerships or limited liability companies with multiple clients, for which a subsidiary of the Company serves as the general partner or managing member. The Company determined that the individual client or single limited partner or member is the customer with respect to SMAs and advisory clients. Based on certain facts and circumstances specific to each individual fund structure, the Company has determined that for accounting purposes, either the StepStone Fund or the individual investors in the fund may be considered to be the customer for arrangements with focused commingled funds. 152 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) When asset management services and the arrangement of administrative services are the performance obligations promised in a contract, the Company satisfies these performance obligations over time because the customer simultaneously receives and consumes the benefits of the services as they are performed. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the customer. Management fees earned from these contracts where the Company has discretion over investment decisions are generally calculated based on a percentage of unaffiliated committed capital or net invested capital, and these amounts are typically billed quarterly. For certain investment funds, management fees are initially based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term. In addition, the management fee rate charged may also be reduced for certain investment funds depending on the contractual arrangement. The management fee basis is subject to factors outside of the Company’s control. Therefore, estimates of future period management fees are not included in the transaction price because those estimates would be considered constrained. Advisory fees from contracts where the Company does not have discretion over investment decisions are generally based on fixed amounts and typically billed quarterly. Management fees generally exclude reimbursements for expenses paid by the Company on behalf of its customers, including amounts related to certain professional fees and other fund administrative expenses pursuant to the fund’s governing documents. For professional and administrative services that the Company arranges to be performed by third parties on behalf of investment funds, management has concluded that the nature of its promise is to arrange for the services to be provided and, accordingly, the Company does not control the services provided by the third parties before they are transferred to the customer. Therefore, the Company is acting as an agent, and the reimbursements for these professional fees paid on behalf of the investment funds are generally presented on a net basis. The Company and certain investment funds that it manages have distribution and service agreements with third-party financial institutions, whereby the Company pays a portion of the fees it receives to such institutions for ongoing distribution and servicing of customer accounts. Management has concluded that the Company does not act as principal for the third-party services, as the Company does not control the services provided by the third parties before they are transferred to the customer. Therefore, the Company is acting as an agent, and the management fees are recorded net of these service fees. The Company may incur certain costs in connection with satisfying its performance obligations for investment management services – primarily employee travel costs – for which it receives reimbursements from its customers. For reimbursable employee travel costs, the Company concluded it controls the services provided by its employees and, therefore, is acting as principal. Accordingly, the Company records the reimbursement for these costs incurred on a gross basis – that is, as revenue in management and advisory fees, net and expense in general, administrative and other expenses in the consolidated statements of income (loss). For reimbursable costs incurred in connection with satisfying its performance obligations for administration services, the Company concluded it does not control the services provided by other third parties and, therefore, is acting as agent. Accordingly, the Company records the reimbursement for these costs incurred on a net basis. Performance Fees The Company earns two types of performance fee revenues: incentive fees and carried interest allocations, as described below. 153 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Incentive fees are generally calculated as a percentage of the profits (up to 15 %) earned in respect of certain accounts, including certain permanent capital vehicles, for which the Company is the investment adviser, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are a form of variable consideration and represent contractual fee arrangements in the Company’s contracts with its customers. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax. The Company recognizes incentive fee revenue only when these amounts are realized and no longer subject to significant risk of reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization). However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax-related portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt. Incentive fees received in advance of crystallization that remain subject to clawback are recorded as deferred incentive fee revenue and included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets. Carried interest allocations include the allocation of performance-based fees, commonly referred to as carried interest, to the Company from unaffiliated limited partners in the StepStone Funds in which the Company holds an equity interest. The Company is entitled to a carried interest allocation (typically 5 % to 20 %) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These carried interest allocations are subject to the achievement of minimum return levels (typically 5 % to 10 %) in accordance with the terms set forth in each respective fund’s governing documents. The Company accounts for its investment balances in the StepStone Funds, including carried interest allocations, under the equity method of accounting because it is presumed to have significant influence as the general partner or managing member. Accordingly, carried interest allocations are not deemed to be within the scope of ASC 606. Legacy Greenspring carried interest allocations reflect the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest. The legacy Greenspring general partner entities are entitled to a carried interest allocation (typically 5 % to 20 %) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. The Company accounts for the investment balances in the legacy Greenspring funds, including carried interest allocations, under the equity method of accounting because it is presumed to have significant influence as the general partner or managing member. Accordingly, legacy Greenspring carried interest allocations are not deemed to be within the scope of ASC 606. The Company does not hold any direct economic interests in the legacy Greenspring general partner entities and thus is not entitled to any carried interest allocation from the legacy funds. All of the carried interest allocations in respect of the legacy Greenspring funds are payable to employees who are considered affiliates of the Company and are therefore reflected as legacy Greenspring performance fee-related compensation in the consolidated statements of income (loss). 154 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The Company recognizes revenue attributable to carried interest allocations from a fund based on the amount that would be due to the Company pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date. Accordingly, the amount recognized as carried interest allocation revenue reflects the Company’s share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period. The Company records the amount of carried interest allocated to the Company as of each period end as accrued carried interest allocations receivable, which is included as a component of investments in the consolidated balance sheets. Management's determination of fair value for investments in the underlying funds includes various valuation techniques. These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted average cost of capital, exit multiples, or terminal growth rates. Carried interest is realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the specific hurdle rates, as defined in the applicable governing documents. Carried interest is subject to reversal to the extent that the amount received to date exceeds the amount due to the Company based on cumulative results. As such, a liability is accrued for potential clawback obligations if amounts previously distributed to the Company would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life. As of March 31, 2025 and 2024, no material amounts for potential clawback obligations had been accrued. Compensation and Benefits Cash-based compensation expense primarily includes salaries, bonuses, employee benefits, cash-based incentive awards and employer-related payroll taxes. Bonuses are accrued over the service period in which they are earned. Expense for cash-based incentive awards granted to employees is recognized and adjusted to fair value over the vesting period to track the performance for one of the Company’s designated investment funds. For the year ended March 31, 2025, the Company granted cash-based incentive awards valued at $ 2.0 million to employees of the Company which vest over four years in equal installments subject to continued service through the vesting date. The Company recognized $ 42 thousand of expense related to cash-based incentive awards for the year ended March 31, 2025. There were no cash-based incentive awards granted prior to fiscal 2025. Equity-based compensation represents grants of equity-based awards or arrangements to certain employees and directors. The Company accounts for grants of equity-based awards, including service-based restricted stock units (“RSUs”) and performance-based RSUs (or “PRSUs”), to certain employees and directors at fair value as of the grant date. The Company recognizes non-cash compensation expense attributable to these grants on a straight-line basis over the requisite service and performance period, which is generally the vesting period. Expense related to grants of PRSUs is recognized only to the extent the performance condition is achieved, and the estimated quantity of awards for which it is probable that the performance condition will be achieved is reevaluated each reporting period. Expense related to grants of equity-based awards is recognized as equity-based compensation expense in the consolidated statements of income (loss). The fair value of RSUs and PRSUs is determined by the closing stock price on the grant date. Forfeitures of equity-based awards are recognized as they occur. Awards classified as liabilities are remeasured at the end of each reporting period until settlement. Equity-based compensation cost for the employee stock purchase plan (“ESPP”) is measured as the discount the employee receives upon purchase of shares and the option value of a share when the offering contains a look-back option feature. See note 10 for additional information regarding the Company’s accounting for equity-based awards. 155 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Performance fee-related compensation represents the portion of carried interest allocation revenue and incentive fees that have been awarded to employees as a form of long-term incentive compensation. Performance fee-related compensation is generally tied to the investment performance of the StepStone Funds. Approximately 50 % of carried interest allocation revenue is awarded to employees as part of the Company’s long-term incentive compensation plan. Carried interest-related compensation is accounted for as compensation expense in conjunction with the related carried interest allocation revenue and, until paid, is recorded as a component of accrued carried interest-related compensation in the consolidated balance sheets. Amounts presented as realized indicate the amounts paid or payable to employees based on the receipt of carried interest allocation revenue from realized investment activity. Carried interest-related compensation expense may be subject to reversal to the extent that the related carried interest allocation revenue is reversed. Carried interest-related compensation paid to employees may be subject to clawback on an after-tax basis under certain scenarios. To date, no material amounts of realized carried interest-related compensation have been reversed. Incentive fee-related compensation is accrued as compensation expense when it is probable and estimable that payment will be made in accordance with the applicable governing agreement. On April 1, 2024, certain of the Company’s non-wholly owned subsidiaries underwent transactions to effect unitization of the outstanding limited partnership interests, including the class of interests relating to awards of carried interest allocations granted to employees, to combine into a single class of limited partnership interests and redesignated into units. The class of interests relating to awards of carried interest allocations granted to employees were previously presented as carried interest-related compensation expense. Legacy Greenspring performance fee-related compensation represents the legacy Greenspring carried interest allocations, which are entirely payable to certain employees. Legacy Greenspring carried interest-related compensation is accounted for as compensation expense in conjunction with the related legacy Greenspring carried interest allocation revenue and, until paid, is recorded as a component of legacy Greenspring accrued carried interest-related compensation in the consolidated balance sheets. Legacy Greenspring carried interest-related compensation expense may be subject to reversal to the extent that the related legacy Greenspring carried interest allocation revenue is reversed. However, none of the legacy Greenspring carried interest allocation revenue is attributable to the Company. General, Administrative and Other General, administrative and other includes occupancy, travel and related costs, insurance, legal and other professional fees, depreciation, amortization of intangible assets, system-related costs, and other general costs associated with operating the Company’s business. Beginning in the quarter ended December 31, 2022, general, administrative and other includes costs associated with the Consolidated Funds. Expenses of the Consolidated Funds have no impact on net income or loss attributable to the Company to the extent such expenses are borne by third-party investors. Other Income (Expense) Investment income (loss) primarily represents the share of earnings (losses) from the investments the Company makes in its SMAs and focused commingled funds. The Company, either directly or through its subsidiaries, generally has a general partner interest in the StepStone Funds, which invest in primary funds, secondary funds and co-investment funds, or a combination thereof. Investment income will increase or decrease based on the earnings of the StepStone Funds, which are primarily driven by net realized and unrealized gains (losses) on the underlying investments held by the funds. The Company’s co-investment funds invest in underlying portfolio companies and therefore their valuation changes from period to period are more influenced by individual companies than the Company’s primary and secondary funds, which have exposures across multiple portfolio companies in underlying private markets funds. The Company’s SMAs and focused commingled funds invest across various industries, strategies and geographies. Consequently, the Company’s general partner investments do not include any significant concentrations in a specific sector or geography outside the United States. Investment income excludes carried interest allocations, which are presented as revenues as described above. 156 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Legacy Greenspring investment income (loss) represents the share of earnings (losses) from the investments the Company makes in certain legacy Greenspring funds through the legacy Greenspring general partner entities. The Company has no direct economic interests in the legacy Greenspring general partner entities. As a result, all such income is reflected as non-controlling interests in legacy Greenspring entities. Legacy Greenspring investment income will increase or decrease based on the earnings of such legacy Greenspring funds, which are primarily driven by net realized and unrealized gains (losses) on the underlying investments held by the funds. Investment income (loss) of Consolidated Funds represents gains (losses) from the investments held by the Consolidated Funds. Interest income consists of income earned on cash, cash equivalents, restricted cash, and amounts associated with the Consolidated Funds. Interest expense primarily consists of the interest expense on the Revolver and the Notes, as well as the related amortization of deferred financing costs. Other income (loss) includes foreign currency transaction gains and losses, non-operating activities, and amounts associated with the Consolidated Funds. Fiscal 2025 reflects a non-operating loss associated with payment made in connection with a secondary transaction executed by one of our private wealth funds of $ 32.5 million. Income Taxes SSG is a corporation for U.S. federal income tax purposes and therefore is subject to U.S. federal and state income taxes on its share of taxable income generated by the Partnership. The Partnership is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by the Partnership flows through to its limited partners, including SSG, and is generally not subject to U.S. federal or state income tax at the Partnership level. The Partnership’s non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to non-U.S. income taxes. Additionally, certain subsidiaries are subject to local jurisdiction taxes at the entity level, which are reflected within income tax expense in the consolidated statements of income (loss). As a result, the Partnership does not record U.S. federal and state income taxes on income in the Partnership or its subsidiaries, except for certain local and foreign income taxes discussed above. Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted. Deferred tax liabilities are included within accounts payable, accrued expenses and other liabilities in the consolidated balance sheets. The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of Partnership units. See Tax Receivable Agreements below. Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent on the amount, timing and character of the Company’s future taxable income. When evaluating the realizability of deferred tax assets, all evidence – both positive and negative – is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies. 157 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The Company is subject to the provisions of ASC Subtopic 740-10, Accounting for Uncertainty in Income Taxes . This standard establishes consistent thresholds as it relates to accounting for income taxes. It defines the threshold for recognizing the benefits of tax return positions in the financial statements as more-likely-than-not to be sustained by the relevant taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50% likely to be realized. If upon performance of an assessment pursuant to this subtopic, management determines that uncertainties in tax positions exist that do not meet the minimum threshold for recognition of the related tax benefit, a liability is recorded in the consolidated financial statements. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as interest expense and general, administrative and other expenses, respectively, in the consolidated statements of income (loss). See note 11 for more information. The Company has elected to account for global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries in the period the tax is incurred. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. The Company reviews its tax positions quarterly and adjusts its tax balances as new information becomes available. Tax Receivable Agreements SSG has entered into an Exchanges Tax Receivable Agreement (the “Exchanges Tax Receivable Agreement”) with the Class B limited partners, Class C limited partners and Class D limited partners, and a Reorganization Tax Receivable Agreement with certain pre-IPO institutional investors (collectively, the “Tax Receivable Agreements”). The Tax Receivable Agreements provide for payment by SSG to such partners and pre-IPO institutional investors of the Partnership of 85 % of the amount of the net cash tax savings, if any, that SSG realizes (or, under certain circumstances, is deemed to realize) as a result of increases in tax basis (and utilization of certain other tax benefits) resulting from (i) SSG’s acquisition of such partners’ and institutional investors’ Partnership units and (ii) in the case of the Exchanges Tax Receivable Agreement, any payments SSG makes under the Exchanges Tax Receivable Agreement (including tax benefits related to imputed interest). SSG will retain the benefit of the remaining 15 % of these net cash tax savings under the Tax Receivable Agreements. See note 14 for more information. Accumulated Other Comprehensive Income The Company’s accumulated other comprehensive income consists of foreign currency translation adjustments and unrealized gains and losses on the defined benefit plan sponsored by one of its subsidiaries. The components of accumulated other comprehensive income were as follows: As of March 31, 2025 2024 Foreign currency translation adjustments $ 92 $ 77 Unrealized gain on defined benefit plan, net 636 227 Accumulated other comprehensive income $ 728 $ 304 158 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Segments The Company operates as one business, a fully-integrated private markets solution provider. The Company’s chief operating decision maker (“CODM”), who is the Company’s chief executive officer, utilizes a consolidated approach to assess the performance of and allocate resources to the business. Accordingly, management has concluded that the Company consists of a single operating segment and single reportable segment for accounting and financial reporting purposes. See note 17 for more information. Concentrations of Risk Financial instruments that potentially subject the Company to concentrations of credit risk or other risks consist principally of cash, cash equivalents, restricted cash, investments and fees receivable. The majority of the Company’s cash, cash equivalents and restricted cash is held in large, high credit quality financial institutions. Substantially all cash amounts on deposit with these large financial institutions exceeded federally insured limits at March 31, 2025 and 2024. The Company actively monitors its banking relationships and periodically performs an assessment of the financial condition and the reputations of these financial institutions. Based on these results, management believes that the Company’s exposure to credit risk is remote. The concentration of credit risk related to fees receivable is generally reduced by the relatively short payment terms extended to the Company’s clients. Amounts due to the Company in the form of carried interest allocations, which are reported as a component of investments in the consolidated balance sheets, remain subject to investment performance risk. In certain cases, carried interest allocations that have been distributed to the Company may remain subject to clawback, pursuant to the terms of the governing documents of the related funds. Refer to the discussion of carried interest above in this note 2 for additional details regarding the investment performance and clawback risk associated with carried interest allocations that have been recognized in income by the Company and/or recorded as accrued carried interest allocations in the consolidated balance sheets. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ASUs issued during the current period not listed below were assessed and determined to either be not applicable to the Company, or not expected to have a material impact on the consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which amends current guidance for reportable segment disclosure requirements. The updated disclosure requirements include: (1) reporting of segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, (2) reporting of an amount for other segment items by reportable segment and a description of its composition, (3) reporting in interim periods of all annual disclosures about a reportable segment’s profit or loss and assets as currently required by Topic 280, (4) reporting of one or more additional measures of segment profit or loss if used by the CODM in assessing segment performance and determining allocation of resources, (5) reporting of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss, and (6) the requirement for single reportable segment entities to provide all required disclosures in Topic 280 for annual and interim periods. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this guidance on April 1, 2024. See note 17 for further information on segment reporting. 159 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) In November 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amends current guidance to provide expanded disclosure for the rate reconciliation with information about specific categories and reconciling items that meet a specific threshold, and to provide additional information about income taxes paid disaggregated by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material effect on the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which amends current guidance to add requirements for disaggregation of certain costs and expenses included within relevant expense captions. The update also requires the separate disclosure of total selling costs. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact on the consolidated financial statements. 3. Revenues The following presents revenues disaggregated by product offering, which aligns with the Company’s performance obligations and the basis for calculating each amount: Year Ended March 31, Management and Advisory Fees, Net 2025 2024 2023 Focused commingled funds (1) $ 440,131 $ 295,927 $ 227,003 SMAs 252,709 223,958 210,187 Advisory and other services 67,061 60,057 56,244 Fund reimbursement revenues 7,113 5,198 3,745 Total management and advisory fees, net $ 767,014 $ 585,140 $ 497,179 _______________________________ (1) Includes income-based incentive fees of $ 8.0 million, $ 1.4 million and $ 0 million for the years ended March 31, 2025, 2024 and 2023, respectively. Year Ended March 31, Incentive Fees 2025 2024 2023 SMAs $ 8,878 $ 16,294 $ 6,606 Focused commingled funds 23,397 9,045 3,057 Total incentive fees $ 32,275 $ 25,339 $ 9,663 Year Ended March 31, Carried Interest Allocations 2025 2024 2023 SMAs $ 171,801 $ 142,411 $ ( 110,020 ) Focused commingled funds 129,399 33,898 ( 12,233 ) Total carried interest allocations $ 301,200 $ 176,309 $ ( 122,253 ) 160 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Year Ended March 31, Legacy Greenspring Carried Interest Allocations 2025 2024 2023 SMAs $ 37 $ 1,029 $ — Focused commingled funds 74,304 ( 76,186 ) ( 452,163 ) Total legacy Greenspring carried interest allocations (1) $ 74,341 $ ( 75,157 ) $ ( 452,163 ) _______________________________ (1) The years ended March 31, 2025, 2024, and 2023 reflect the net effect of gross realized carried interest allocations of $ 63.1 million, $ 59.7 million, and $ 74.7 million, respectively, and the reversal of such amounts in unrealized carried interest allocations for such periods. See note 5 for a discussion of changes in carried interest allocations and legacy Greenspring carried interest allocations. The Company derives revenues from clients located in both the United States and other countries. The table below presents the Company’s revenues by geographic location: Year Ended March 31, Revenues (1) 2025 2024 2023 United States $ 521,236 $ 191,373 $ ( 238,441 ) Non-U.S. countries 653,594 520,258 170,867 _______________________________ (1) Revenues are attributed to countries based on client location for SMAs and advisory and other services, or location of investment vehicle for focused commingled funds. For the years ended March 31, 2025, 2024 and 2023, no individual client represented 10% or more of the Company’s net management and advisory fees. For the years ended March 31, 2025 and 2024, the Company had management and advisory fee revenues attributable to the United States and Cayman Islands, each of which represented 10% or more of the Company’s net management and advisory fees. For the year ended March 31, 2023, the Company had management and advisory fee revenues attributable to the United States, which represented 10% or more of the Company’s net management and advisory fees. As of March 31, 2025 and 2024, the Company had $ 26.8 million and $ 31.0 million, respectively, of deferred revenues, which is included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets. During the year ended March 31, 2025, the Company had recognized $ 3.2 million as revenue from amounts included in the deferred revenue balance as of March 31, 2024. 161 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) 4. Variable Interest Entities Consolidated VIEs The Company consolidates certain VIEs for which it is the primary beneficiary. Such VIEs consist of certain operating entities not wholly-owned by the Company (e.g., SPD, SRA and SRE), SPW, legacy Greenspring general partner entities and certain StepStone Funds. See note 2 for more information on the Company’s accounting policies related to the consolidation of VIEs. The assets of the consolidated VIEs totaled $ 1,376.0 million and $ 995.2 million as of March 31, 2025 and 2024, respectively. The liabilities of the consolidated VIEs totaled $ 1,278.7 million and $ 593.7 million as of March 31, 2025 and 2024, respectively. The assets of the consolidated VIEs may only be used to settle obligations of the same VIE. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest. As of March 31, 2025 and 2024, no material amounts previously distributed have been accrued for clawback liabilities. Unconsolidated VIEs The Company holds variable interests in the form of direct equity interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary. The Company’s maximum exposure to loss is limited to the potential loss of assets recognized by the Company relating to these unconsolidated entities. The carrying value of the assets and liabilities recognized in the consolidated balance sheets with respect to the Company’s interests in VIEs that were not consolidated is set forth below: As of March 31, 2025 2024 Investments in funds $ 176,339 $ 135,043 Legacy Greenspring investments in funds 133,489 147,042 Due from affiliates, net 47,693 34,744 Less: Amounts attributable to non-controlling interests in subsidiaries 26,465 25,362 Less: Amounts attributable to non-controlling interests in legacy Greenspring entities 133,489 147,042 Maximum exposure to loss $ 197,567 $ 144,425 5. Investments The Company’s investments consist of equity method investments primarily related to (i) investments in the StepStone Funds for which it serves as general partner or managing member but does not have a controlling financial interest and (ii) investments of Consolidated Funds. The Company’s equity interest in its equity method investments in the StepStone Funds typically does not exceed 1 % in each fund. The Company’s share of the underlying net income or loss attributable to its equity interest in the funds is recorded in investment income in the consolidated statements of income. Investment income attributable to the Consolidated Funds is recorded in investment income of Consolidated Funds. Investment income attributable to investments in certain legacy Greenspring funds for which the Company has no direct economic interests is recorded in legacy Greenspring investment income in the consolidated statements of income. 162 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Equity Method Investments The Company’s equity method investments consist of the following: As of March 31, 2025 2024 Investments in funds (1) 183,694 135,043 Accrued carried interest allocations 1,495,664 1,354,051 Legacy Greenspring investments in funds and accrued carried interest allocations (2) 629,228 631,197 Total equity method investments 2,308,586 2,120,291 _______________________________ (1) The Company’s investments in funds were $ 275.7 million and $ 204.8 million as of March 31, 2025 and 2024, respectively. The consolidation of the Consolidated Funds results in the elimination of the Company’s investments in such funds. (2) Reflects investments in funds of $ 133.5 million and $ 147.0 million and carried interest allocations of $ 495.7 million and $ 484.2 million as of March 31, 2025 and 2024, respectively. The Company recognized equity method income (loss) of the following: Year Ended March 31, 2025 2024 2023 Carried interest allocations $ 301,200 $ 176,309 $ ( 122,253 ) Investment income (loss) 15,096 7,452 ( 2,509 ) Legacy Greenspring carried interest allocations 74,341 ( 75,157 ) ( 452,163 ) Legacy Greenspring investment loss ( 1,185 ) ( 9,087 ) ( 44,075 ) Total equity method income (loss) $ 389,452 $ 99,517 $ ( 621,000 ) The increase in carried interest allocations for the year ended March 31, 2025 as compared to the year ended March 31, 2024 was primarily attributable to higher net unrealized appreciation in the fair value of certain underlying fund investments in the Company’s private equity funds. The increase in carried interest allocations for the year ended March 31, 2024 as compared to the year ended March 31, 2023 was primarily attributable to net unrealized appreciation in the fair value of certain underlying fund investments in the Company’s private equity funds as compared to net unrealized depreciation in the prior year period. The increase in legacy Greenspring carried interest allocations for the year ended March 31, 2025 as compared to the year ended March 31, 2024 was primarily attributable to net unrealized appreciation in the fair value of certain underlying fund investments as compared to net unrealized depreciation in the prior year period. The increase in legacy Greenspring carried interest allocations for the year ended March 31, 2024 as compared to the year ended March 31, 2023 was primarily attributable to lower net unrealized depreciation in the fair value of certain underlying fund investments. See note 2 for a discussion of the Company’s accounting policy for investments on a three-month lag. As of March 31, 2025 and 2024, the Company’s investments in one and two SMAs, respectively, each individually represented 10% or more of the total accrued carried interest allocations balance, and in the aggregate represented approximately 15 % and 26 %, respectively, of the total accrued carried interest allocations balance as of those dates. As of March 31, 2025 and 2024, the Company’s investments in three commingled funds each individually represented 10% or more of the total legacy Greenspring accrued carried interest allocations balance, and in the aggregate represented approximately 47 % and 36 %, respectively, of the total legacy Greenspring accrued carried interest allocations balances as of those dates. 163 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Of the total accrued carried interest allocations balance as of March 31, 2025 and 2024, $ 758.0 million and $ 719.5 million, respectively, were payable to affiliates and are included in accrued carried interest-related compensation in the consolidated balance sheets. Of the total legacy Greenspring investments in funds and accrued carried interest allocations balance as of March 31, 2025 and 2024, $ 495.7 million and $ 484.2 million, respectively, were payable to employees who are considered affiliates of the Company and are included in legacy Greenspring accrued carried interest-related compensation in the consolidated balance sheets and $ 133.5 million and $ 147.0 million, respectively, are reflected as non-controlling interests in legacy Greenspring entities in the consolidated balance sheets. The Company evaluates each of its equity method investments to determine if any are considered significant as defined by the SEC. As of March 31, 2025 and 2024 and for the years ended March 31, 2025, 2024 and 2023, no individual equity method investment held by the Company met the significance criteria. As a result, the Company is not required to provide separate financial statements for any of its equity method investments. Summarized financial information for the Company’s equity method investments reflected below represents the financial position as of March 31, 2025 and 2024, and the results of operations for the years ended March 31, 2025, 2024 and 2023, which are reported on a three-month lag. Assets are primarily composed of the investments held by the StepStone Funds. As of March 31, 2025 2024 Assets $ 91,879,641 $ 73,311,149 Liabilities 3,003,340 2,083,509 Equity $ 88,876,301 $ 71,227,640 Year Ended March 31, 2025 2024 2023 Investment income $ 213,758 $ 131,521 $ 115,092 Expenses ( 901,553 ) ( 631,707 ) ( 446,413 ) Net realized and unrealized gain (loss) on investments 5,215,482 3,121,627 ( 4,966,901 ) Income tax expense ( 11,644 ) ( 28,979 ) ( 12,261 ) Net income (loss) $ 4,516,043 $ 2,592,462 $ ( 5,310,483 ) Investments of Consolidated Funds The Company consolidates funds and entities when it is deemed to hold a controlling financial interest. The activity of the Consolidated Funds is reflected within the consolidated financial statements. 164 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Investments held by the Consolidated Funds are summarized below: Fair Value as of March 31, Percentage of Total Investments as of March 31, 2025 2024 2025 2024 Investments of Consolidated Funds: Equity securities (cost of $ 60.0 million and $ 15.6 million as of March 31, 2025 and 2024, respectively) $ 70,178 $ 17,028 17 % 13 % Partnership and LLC interests (cost of $ 257.0 million and $ 76.0 million as of March 31, 2025 and 2024, respectively) 344,833 114,830 83 % 87 % Total investments of Consolidated Funds $ 415,011 $ 131,858 100 % 100 % As of March 31, 2025 and 2024, no individual investment had a fair value greater than 5% of the Company’s total assets. The following table summarizes the net realized and unrealized gains (losses) from investment activities of the Consolidated Funds: Year Ended March 31, 2025 2024 2023 Investment Income of Consolidated Funds: Net realized gains on investments $ 3,181 $ 2,325 $ 3 Net unrealized gains on investments 62,193 26,147 9,312 Total investment income of Consolidated Funds $ 65,374 $ 28,472 $ 9,315 6. Fair Value Measurements The Company measures certain assets and liabilities at fair value on a recurring basis. The following tables provide details regarding the classification of these assets and liabilities within the fair value hierarchy as of the dates presented: Financial Instruments of the Company As of March 31, 2025 Level I Level II Level III Total Liabilities Contingent consideration obligation $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — As of March 31, 2024 Level I Level II Level III Total Liabilities Contingent consideration obligation $ — $ — $ 53,449 $ 53,449 Total liabilities $ — $ — $ 53,449 $ 53,449 For the financial instruments presented in the tables above, there were no changes in fair value hierarchy levels during the years ended March 31, 2025 and 2024. 165 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) A reconciliation from the beginning balance to the closing balance of Level III financial instruments of the Company are set forth below: Year Ended March 31, Contingent consideration obligation 2025 2024 Balance, beginning of year: $ 53,449 $ 36,745 Additions — 41 Change in fair value 15,776 16,809 Settlements ( 69,225 ) ( 146 ) Balance, end of year: $ — $ 53,449 Changes in unrealized losses included in earnings related to financial liabilities as of reporting date $ 15,776 $ 16,809 Contingent Consideration The fair value of the contingent consideration obligation was based on a discounted cash flow analysis using a probability-weighted average estimate of certain performance targets, including revenue levels. The significant unobservable inputs required to value the contingent consideration obligation primarily related to the future expected revenues and the discount rate applied to the expected future revenues and payments of obligations. The management fee revenue target for calendar year 2024 was achieved resulting in the full earn-out amount of $ 75.0 million, which was fully paid prior to March 31, 2025. In accordance with the contingent consideration arrangement, a portion of the contingent earn-out liability otherwise payable to the sellers included amounts paid to certain of the Company’s employees and former employees during the year ended March 31, 2025. As a result, the contingent consideration liability was settled net of $ 5.8 million paid. The contingent consideration obligation was included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets as of March 31, 2024. Changes in the fair value of the liabilities are included in general, administrative and other expenses in the consolidated statements of income (loss). Financial Instruments of Consolidated Funds As of March 31, 2025 Level I Level II Level III Total Assets Equity securities $ — $ — $ 63,664 $ 63,664 Partnership and LLC interests — — 866 866 Total assets $ — $ — $ 64,530 $ 64,530 As of March 31, 2024 Level I Level II Level III Total Assets Equity securities $ — $ — $ 12,421 $ 12,421 Partnership and LLC interests — — 1,273 1,273 Total assets $ — $ — $ 13,694 $ 13,694 For the financial instruments presented in the tables above, there were no changes in fair value hierarchy levels during the years ended March 31, 2025 and 2024. 166 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The Company generally values its investment funds, which are generally organized as partnership and LLC interests, using the NAV per share equivalent calculated by the investment manager as a practical expedient in determining an independent fair value. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the net asset value per share practical expedient. As of March 31, 2025 and 2024, investments with a combined fair value of $ 350.5 million and $ 118.2 million, respectively, are excluded from presentation in the fair value hierarchy as the fair value of these investments were measured at net asset value. As of March 31, 2025 and 2024, investments with a combined fair value of $ 64.5 million and $ 13.7 million, respectively, were classified as Level III investments. Depending on the valuation technique, the significant unobservable input used to value these investments classified as Level III could be the enterprise value to revenue multiple or the discounts to recent transaction prices or recent round of financing. A reconciliation from the beginning balance to the closing balance of Level III financial instruments of Consolidated Funds are set forth below: As of March 31, 2025 2024 Financial Instruments of Consolidated Funds Balance, beginning of period: $ 13,694 $ 6,901 Transfers into Level III 9,289 1,593 Transfers out of Level III ( 4,332 ) ( 5,067 ) Purchases 38,369 8,813 Change in fair value 7,510 1,454 Balance, end of period: $ 64,530 $ 13,694 Changes in unrealized gains included in earnings related to financial assets still held at the reporting date $ 7,510 $ 1,454 7. Property and Equipment Property and equipment is included in other assets and receivables in the consolidated balance sheets and consists of the following: As of March 31, Property and equipment: 2025 2024 Office furniture $ 8,550 $ 8,049 Computer equipment and software 4,416 3,642 Leasehold improvements 30,294 27,570 Property and equipment, gross 43,260 39,261 Less: Accumulated depreciation ( 13,462 ) ( 9,703 ) Property and equipment, net $ 29,798 $ 29,558 Depreciation expense related to property and equipment totaled $ 4.5 million, $ 5.2 million and $ 4.0 million for the years ended March 31, 2025, 2024 and 2023, respectively, and is included in general, administrative and other expenses in the consolidated statements of income (loss). 167 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) 8. Intangibles and Goodwill Intangible assets consist of management contracts providing economic rights to management and advisory fees and client relationships related to future fundraising, as obtained through the Company’s acquisitions of other businesses. Intangible assets, net consists of the following: As of March 31, 2025 2024 Management contracts $ 352,002 $ 352,002 Client relationships 96,650 96,650 Less: Accumulated amortization ( 184,780 ) ( 143,779 ) Intangible assets, net $ 263,872 $ 304,873 Amortization expense related to intangible assets was $ 41.0 million, $ 42.4 million and $ 43.5 million for the years ended March 31, 2025, 2024 and 2023, respectively. These amounts are included in general, administrative and other expenses in the consolidated statements of income (loss). At March 31, 2025, the expected future amortization of finite-lived intangible assets is as follows: Fiscal year ending March 31, 2026 $ 40,810 2027 40,776 2028 40,759 2029 40,759 2030 40,759 Thereafter 60,009 Total $ 263,872 The carrying value of goodwill was $ 580.5 million as of March 31, 2025 and 2024. The Company determined there was no indication of goodwill impairment as of March 31, 2025 and 2024. 9. Debt Obligations The Company’s debt obligations consist of the following: As of March 31, 2025 2024 Series A senior notes $ 175,000 $ — Revolver 100,000 150,000 Total remaining principal 275,000 150,000 Less: Debt issuance costs ( 5,732 ) ( 1,178 ) Total debt obligations $ 269,268 $ 148,822 168 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Senior Notes On October 22, 2024, the Partnership issued $ 175.0 million aggregate principal amount of its 5.52 % Series A senior notes due October 22, 2029 (the “Notes”), pursuant to a note purchase agreement, dated as of October 22, 2024 (the “Note Purchase Agreement”), in a private placement exempt from registration under the Securities Act. Interest on the Notes is be payable semi-annually in arrears on April 22 and October 22 of each year, commencing on April 22, 2025. Interest on the Notes accrues from and including October 22, 2024. The Notes will mature on October 22, 2029. The Partnership may, at its option, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5 % of the aggregate principal amount of the Notes then outstanding at a redemption price equal to 100 % of the principal amount thereof plus any applicable “make-whole amount” and accrued and unpaid interest to the redemption date. So long as no default or event of default shall have occurred and be continuing under the Note Purchase Agreement, no make-whole amount will be due if the Notes are paid on or after April 22, 2029. The fair value of the Notes, which are recorded at amortized cost, is classified as a Level III valuation within the fair value hierarchy. As of March 31, 2025, the carrying value of the Notes, net of debt issuance costs, approximated fair value. There were no Notes outstanding as of March 31, 2024. Revolving Credit Facility The Company is party to a credit agreement, as amended and restated in May 2024 (the “Credit Agreement”), which, among other things, increased the aggregate principal amount of the commitments thereunder to $ 300.0 million from $ 225.0 million and extended the maturity date of the revolving facility to May 2029. The Credit Agreement was arranged by JPMorgan Chase Bank, N.A., as the administrative agent and collateral agent, and certain other lenders party thereto and provides for a $ 300.0 million multicurrency revolving credit facility (the “Revolver”). Borrowings under the Revolver bear interest at a variable rate per annum. The Company may designate each borrowing as (i) in the case of any borrowing in U.S. dollars, a base rate loan or a Term Secured Overnight Financing Rate (“SOFR”) rate loan, (ii) in the case of any borrowing denominated in Euros, a EURIBOR rate loan, (iii) in the case of any borrowing denominated in British Pounds Sterling, a Sterling Overnight Index Average (“SONIA”) loan, (iv) in the case of any borrowing denominated in Swiss Francs, a Swiss Average Rate Overnight (“SARON”) loan, and (v) in the case of any borrowing denominated in Australian dollars, an AUD rate loan. Borrowings bear interest equal to (i) in the case of base rate loans, 1.00 % plus the greatest of (a) the Prime Rate, (b) the New York Federal Reserve Bank Rate plus 0.50 % and (c) the 1 month Term SOFR, plus 1.10 %, (ii) in the case of a Term SOFR rate loan, the Term SOFR rate plus 2.10 %, (iii) in the case of a EURIBOR rate loan, the EURIBOR rate multiplied by the Statutory Reserve Rate (as defined in the Credit Agreement) plus 2.00 %, (iv) in the case of a SONIA loan, the Sterling Overnight Index Average plus 2.03 %, (v) in the case of a SARON loan, the Swiss Average Rate Overnight plus 2.00 %, and (vi) in the case of an AUD rate loan, the AUD Screen Rate (as defined in the Credit Agreement) multiplied by the Statutory Reserve Rate plus 2.20 %, in certain cases subject to applicable interest rate floors. The weighted-average interest rate in effect for the Revolver as of March 31, 2025 was 6.48 %. Borrowings under the Revolver may be repaid at any time during the term of the Credit Agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date. Any outstanding principal amounts, together with any accrued interest thereon, shall be due and payable on the maturity date. The maturity date for the Revolver is May 16, 2029. 169 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The Revolver bears a fee on undrawn commitments equal to 0.25 % per annum if total utilization of revolving commitments is equal to or greater than 50% and 0.35 % per annum if total utilization of revolving commitments is less than 50%. The carrying value of the Revolver approximates fair value, as the loan is subject to variable interest rates that adjust with changes in market rates and market conditions and the current interest rate approximates that which would be available under similar financial arrangements. The Company can use available funding capacity under the Revolver to satisfy letters of credit in amounts up to $ 10.0 million. Amounts used to satisfy the letters of credit reduce the available capacity under the Revolver. As of March 31, 2025, the Company had outstanding letters of credit totaling $ 6.5 million. Debt Obligations of Consolidated Funds Certain Consolidated Funds may maintain revolving credit facilities that are secured by fund assets to fund investments on a short-term basis. The debt obligations of the Consolidated Funds are non-recourse to the Company. In December 2024, one of the Company’s consolidated investment funds entered into a credit agreement with Northern Trust Global Service SE (the “Fund Credit Facility”). The Fund Credit Facility provides for a multi-currency revolving credit facility of up to $ 125.0 million. Amounts drawn under the facility must be repaid within 180 days. As of March 31, 2025, there were no outstanding borrowings on the Fund Credit Facility. Borrowings under the Fund Credit Facility bear interest at a variable rate per annum. Borrowings in USD will bear interest at the applicable federal funds target rate (upper range) plus a margin of 250 basis points. Borrowings in GBP will bear interest at the Bank of England base rate plus a margin of 250 basis points. Borrowings in EUR will bear interest at the European Central Bank main refinancing rate plus a margin of 250 basis points. The carrying value of the Fund Credit Facility approximates fair value, as the loan is subject to variable interest rates that adjust with changes in market rates and market conditions and the current interest rate approximates that which would be available under similar financial arrangements. 170 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Debt Covenants Senior Notes The Note Purchase Agreement contains certain covenants, including those requiring the Company to (a) maintain a total net leverage ratio, (b) maintain a minimum total of fee-earning assets under management, (c) cause at least 80 % of all management fees payable by material subsidiaries to the Company to be collected each period without deferral, waiver or reduction, (d) limit the amount of secured indebtedness to be incurred by the Company, and (e) other customary covenants. The Note Purchase Agreement also provides for customary events of default, which, if any occur and is continuing, could permit or require the entire unpaid principal amount of any or all Notes, plus all accrued and unpaid interest thereon and any applicable “make-whole amount” to become or to be declared due and payable immediately. Revolving Credit Facility Under the terms of the Credit Agreement, certain of the Company’s assets serve as pledged collateral. In addition, the Credit Agreement contains covenants that, among other things: limit the Company’s ability to incur indebtedness; create, incur or allow liens; transfer or dispose of assets; merge with other companies; make certain investments; pay dividends or make distributions in certain circumstances; engage in new or different lines of business; and engage in certain transactions with affiliates. The Credit Agreement also contains financial covenants requiring the Company to maintain a total net leverage ratio and a minimum total of fee-earning assets under management. Fund Credit Facility Under the terms of the Fund Credit Facility, certain of the assets of the Consolidated Funds serve as pledged collateral. In addition, the Fund Credit Facility contains covenants that, among other things: limit the ability of the fund to incur indebtedness; create, incur or allow liens; and other customary covenants. The Fund Credit Facility also provides for customary events of default, which, if any occur and are continuing, could permit or require the entire unpaid principal amount of any or all loans under the Fund Credit Facility, plus all accrued and unpaid interest thereon to become or to be declared due and payable immediately. As of March 31, 2025, the Company was in compliance with the covenants under its various debt agreements. 10. Equity-Based Compensation 2020 Long-Term Incentive Plan The Company has adopted its 2020 Long-Term Incentive Plan (“LTIP”), which allows for the granting of stock options, stock appreciation rights, restricted stock awards, RSUs and performance stock awards to employees, directors and consultants. As of March 31, 2025, there were 28,103,332 shares of Class A common stock available to grant under the LTIP. 171 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Restricted Stock Units RSUs represent the right to receive payment on the date of vesting in the form of one share of Class A common stock for each RSU. Holders of unvested RSUs do not have the right to vote with the underlying shares of Class A common stock, but are entitled to accrue dividend equivalents which are generally paid in cash when such RSUs vest. The RSUs granted generally vest over four years in equal annual installments. Upon vesting, the Company will typically withhold or cause the participant to sell the number of shares to satisfy the statutory withholding tax obligation and deliver the net number of resulting shares vested. The change in unvested RSUs is as follows: Number of RSUs Weighted-Average Grant-Date Fair Value Per RSU Balance as of March 31, 2024 1,422,658 $ 27.12 Granted 451,970 $ 53.60 Vested ( 836,857 ) $ ( 22.84 ) Forfeited ( 13,764 ) $ ( 29.76 ) Balance as of March 31, 2025 1,024,007 $ 42.28 The weighted-average grant-date fair value of RSUs granted during the years ended March 31, 2025, 2024, and 2023 was $ 53.60 , $ 35.07 , and $ 28.97 , respectively. The total fair value as of the respective vesting dates of RSUs vested during the years ended March 31, 2025, 2024 and 2023 was $ 48.9 million, $ 24.3 million and $ 16.5 million, respectively. Performance-Based Restricted Stock Units In March 2025, the Company granted PRSUs to certain employees that are subject to both performance-based and service-based vesting conditions. The vesting of the awards is subject to achievement of an annual income contribution target for any fiscal year within a five-year performance period and continued employment through the date the performance target is certified at the end of the fiscal year in which the target is achieved. The performance target may be met in any fiscal year within the five-year performance period, and the vesting date will occur at the end of the fiscal year period in which the target is achieved. If the performance target is not met by the end of the performance period, the awards will immediately be forfeited. Compensation cost is recognized over the requisite service period if it is probable that the performance condition will be satisfied. The change in unvested PRSUs is as follows: Number of PRSUs Weighted-Average Grant-Date Fair Value Per PRSU Balance as of March 31, 2024 — $ — Granted 69,870 $ 53.67 Vested — $ — Forfeited — $ — Balance as of March 31, 2025 69,870 $ 53.67 172 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Unvested Partnership Units In June 2018, the Company issued an aggregate of 5.2 % of profits interests (the “Class B2 Interests”) in the Company to certain key employees. These Class B2 Interests provide the recipients with an opportunity to participate in the profits of the Company and proceeds of certain capital events. The Class B2 Interests vest over a period of six years from the grant date, subject to an employee’s continuous service with the Company through the applicable vesting date. Under the terms of the Fifth Amended and Restated Limited Partnership Agreement dated March 8, 2018, the vesting of the awards will occur as follows: (i) 0 % during the first three years from the date of issuance, (ii) 30.0 % on the third anniversary of the date of issuance, and (iii) 5.8 % for each fiscal quarter after the third anniversary of the date of issuance (fully vested on the sixth anniversary of the date of issuance, or June 2024). Upon the final vesting date, all of the Class B2 units were automatically converted into Class B units and unitholders were entitled to purchase from the Company one share of Class B common stock for each Class B unit at its par value. Prior to vesting, holders of Class B2 units did not have the right to receive any distributions from the Partnership, other than tax-related distributions. The Class B2 Interests are classified as equity-based awards, and the associated equity-based compensation expense is recognized on a straight-line basis over the vesting period, with a corresponding increase to stockholders’ equity in the Company’s consolidated balance sheets. In June 2024, 2,566,566 outstanding Class B2 units fully vested and were automatically converted into Class B units and all unitholders were entitled to purchase from the Company one share of Class B common stock for each Class B unit at its par value. Liability Classified Awards In November 2022, the Company issued a profits interest in SPW to certain employees of the SPW team and concurrently entered into an option agreement which provides that (i) StepStone has the right to acquire the profits interest at the end of any fiscal quarter after June 30, 2027, in exchange for payment of a call price and (ii) the SPW management team, through an entity named CH Equity Partners, LLC, has the right to put the profits interest to StepStone on June 30, 2026 or at the end of any fiscal quarter thereafter, in exchange for payment of a put price. The applicable call or put price is, in certain circumstances, subject to an earn-out or earn-down. The call or put price will be payable in cash unless the Company elects to pay a portion of the consideration in units of the Partnership, each to be exchangeable into shares of the Company’s Class A common stock, and, in either case, rights under one or more tax receivable agreements. The Company accounted for the profits interest and option agreement as a single unit of account as a liability classified equity-based award. There are no vesting provisions or service requirements related to the award. In determining the fair value of the liability classified awards, the Company considers an income approach using a discounted cash flow analysis, a market approach using observable inputs from similar or comparable transactions in the market and the contractual redemption price. The assumptions used in the analysis are inherently subjective; therefore, the ultimate settlement amount for the liability classified awards may differ materially from the current estimate. The significant unobservable inputs required to value the liability classified awards primarily relate to future projected earnings of SPW and the contractual transaction price, which include a discount rate applied of 34 % as of March 31, 2025. 173 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) For the years ended March 31, 2025, 2024 and 2023, the Company recognized $ 651.8 million, $ 22.9 million and $ 8.6 million, respectively, of expense related to liability classified awards within equity-based compensation expense in the consolidated statements of income (loss). For the years ended March 31, 2025 and 2024, the Company paid $ 16.2 million and $ 3.1 million, respectively, related to the settlement of liability classified awards. For the year ended March 31, 2023, no amounts were paid related to the settlement of liability classified awards. As of March 31, 2025 and 2024, the Company had recognized $ 663.9 million and $ 28.3 million, respectively, for liability classified awards within accrued compensation and benefits in the consolidated balance sheets. Employee Stock Purchase Plan The Company has an ESPP under which eligible employees may purchase shares of Class A common stock of the Company at six-month period intervals for 85 % of the lower of the fair market value on either the first or last trading day of the offering period. Each eligible employee may purchase up to five thousand dollars worth of shares each six-month offering period, limited to a maximum of 1,000 shares. For the year ended March 31, 2025, 69,807 shares were purchased under the ESPP. There were no shares purchased under the ESPP during the years ended March 31, 2024 and 2023 as the ESPP had not yet commenced. As of March 31, 2025, the Company has 2,130,193 shares of Class A common stock reserved for future issuances under the ESPP. Grants of Limited Partnership Interests In November 2022, one of the Company’s non-wholly owned subsidiaries issued new partnership interests to certain employees with a grant date fair value of $ 6.1 million, vesting over six years . The issuance did not impact the Company’s fully diluted interest in the subsidiary. As of March 31, 2025, $ 52.1 million of unrecognized non-cash compensation expense in respect of equity-based awards remained to be recognized over a weighted-average period of approximately 3.6 years. The Company recognized tax benefits related to equity-based awards of $ 18.4 million, $ 4.5 million and $ 1.8 million for the years ended March 31, 2025, 2024 and 2023, respectively. 11. Income Taxes The Company’s income (loss) before income tax consisted of the following: Year Ended March 31, 2025 2024 2023 Domestic income (loss) before income tax $ ( 278,526 ) $ 127,311 $ ( 102,560 ) Foreign income before income tax 56,491 68,085 61,106 Total income (loss) before income tax $ ( 222,035 ) $ 195,396 $ ( 41,454 ) 174 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The following table presents the components of the Company’s provision for income taxes: Year Ended March 31, 2025 2024 2023 Current: Federal $ 11,869 $ 7,395 $ 6,933 State and local 2,944 1,650 1,726 Foreign 11,303 9,349 7,653 Total current income tax expense 26,116 18,394 16,312 Deferred: Federal ( 69,805 ) 8,815 ( 10,570 ) State and local ( 5,234 ) 295 ( 1,921 ) Foreign ( 285 ) 72 — Total deferred income tax expense (benefit) ( 75,324 ) 9,182 ( 12,491 ) Total income tax expense (benefit) $ ( 49,208 ) $ 27,576 $ 3,821 A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows: Year Ended March 31, 2025 2024 2023 Federal tax at statutory rate 21.0 % 21.0 % 21.0 % State and local income tax 0.6 1.1 0.8 Amounts allocated to non-controlling interests 0.6 ( 11.8 ) ( 13.6 ) Foreign taxes ( 5.0 ) 4.8 ( 18.5 ) Valuation allowance ( 0.8 ) ( 0.3 ) 4.7 Stock-based compensation 1.7 ( 0.5 ) 0.9 Return to provision adjustment 1.2 ( 0.3 ) ( 3.7 ) Other 2.9 0.1 ( 0.8 ) Effective tax rate 22.2 % 14.1 % ( 9.2 ) % The Company’s effective tax rate is dependent on many factors, including the estimated amount of income subject to tax. Consequently, the effective tax rate can vary from period to period. The Company’s overall effective tax rate in fiscal 2025 differs from the statutory rate primarily because of the impact of nondeductible items. The Company’s overall effective tax rates in fiscal 2024 and 2023 are less than the statutory rate primarily because a portion of income is allocated to non-controlling interests, as the tax liability on such income is borne by the holders of such non-controlling interests. 175 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The following table presents the components of the Company’s deferred income tax assets and liabilities: As of March 31, 2025 2024 Deferred tax assets: Investment in the Partnership $ 403,166 $ 195,426 Other 3,655 2,682 Total deferred tax assets before valuation allowance 406,821 198,108 Valuation allowance ( 23,935 ) ( 13,596 ) Total net deferred tax assets 382,886 184,512 Deferred tax liabilities: Total deferred tax liabilities 420 158 Net deferred tax assets $ 382,466 $ 184,354 In accordance with the Transaction Agreements outlined in note 14, the Company remeasured the non-controlling interests in its subsidiaries to the redemption value. This adjustment had a significant impact on the Company’s share of the Partnership’s book equity, resulting in an increase in deferred tax assets recorded through equity for the year ended March 31, 2025. Each contemplated exchange is expected to lead to a corresponding decrease in deferred tax assets, also recorded through equity. In connection with the Transaction Agreements, the Company recorded an $ 11.3 million decrease in deferred tax assets during fiscal 2025 as a result of the 2024 Exchange (as defined below). Under the profits interest and option agreement related to SPW, the Company recognized an expense for liability classified awards within equity-based compensation expense in the consolidated statements of income (loss) for the year ended March 31, 2025. This expense is not currently deductible for tax purposes, resulting in a temporary difference that increased the Company’s deferred tax asset by $ 90.4 million as of March 31, 2025. See note 10 for more information. In connection with the exchanges of Class B, Class C and Class D units of the Partnership for Class A common stock by certain limited partners of the Partnership during fiscal 2025, the Company recorded an overall increase to deferred tax assets for the fiscal year ended March 31, 2025 of $ 136.3 million, and an increase in the valuation allowance of $ 3.3 million. Additionally, the Company recorded a corresponding Tax Receivable Agreements liability of $ 116.7 million, representing 85 % of the incremental net cash tax savings for the Company as a result of these exchanges. The Company made payments of $ 9.8 million, $ 10.3 million and $ 6.0 million during the years ended March 31, 2025, 2024 and 2023, respectively, under the Tax Receivable Agreements. As of March 31, 2025, the Company’s total Tax Receivable Agreements liability was $ 313.7 million. See note 13 for more information. The Company evaluates the realizability of its deferred tax assets on a quarterly basis and adjusts the valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax assets may not be realized. The total ending valuation allowance for the year ended March 31, 2025 was $ 23.9 million. Apart from the valuation allowance, the Company believes that the remaining deferred tax assets will be realized in full. 176 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) A summary of the change in valuation allowance by year is as follows: Valuation Allowance Balance at March 31, 2023 $ 12,352 Income tax decrease ( 1,210 ) Equity increase 2,454 Balance at March 31, 2024 13,596 Income tax increase 3,900 Equity increase 6,439 Balance at March 31, 2025 $ 23,935 As of March 31, 2025, the Company has not recorded any unrecognized tax benefits and does not expect there to be any material changes to uncertain tax positions within the next 12 months. The Company files income tax returns as required by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company may be subject to examination by U.S. federal and certain state and local tax authorities. Management has analyzed the Company’s tax positions taken with respect to all applicable income tax issues, for all open tax years, and for all jurisdictions in which the Company is required to file tax returns and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s consolidated financial statements for the years ended March 31, 2025, 2024 and 2023. The Company files U.S. federal, state, local and foreign tax returns on a calendar-year basis. With limited exception, returns filed prior to 2020 are no longer subject to examination by the applicable taxing authorities. There are currently no material examinations being conducted of the Company by tax authorities. 177 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) 12. Earnings Per Share Basic and diluted earnings per share of Class A common stock are presented for the years ended March 31, 2025, 2024 and 2023. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock: Year Ended March 31, 2025 2024 2023 (in thousands, except share and per share amounts) Numerator: Net income (loss) attributable to StepStone Group Inc. – Basic $ ( 179,563 ) $ 58,091 $ ( 18,398 ) Incremental income from assumed vesting of RSUs — 451 — Incremental income from assumed vesting and exchange of Class B2 units — 2,202 — Net income (loss) attributable to StepStone Group Inc. – Diluted $ ( 179,563 ) $ 60,744 $ ( 18,398 ) Denominator: Weighted-average shares of Class A common stock outstanding – Basic 71,142,916 63,489,135 61,884,671 Assumed vesting of RSUs — 512,152 — Assumed vesting and exchange of Class B2 units — 2,542,751 — Weighted-average shares of Class A common stock outstanding – Diluted 71,142,916 66,544,038 61,884,671 Net income (loss) per share of Class A common stock: Basic $ ( 2.52 ) $ 0.91 $ ( 0.30 ) Diluted $ ( 2.52 ) $ 0.91 $ ( 0.30 ) Diluted earnings per share of Class A common stock is computed by dividing net income (loss) attributable to SSG, giving consideration to the reallocation of net income between holders of Class A common stock and non-controlling interests, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities, if any. Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to SSG and therefore are not participating securities. As a result, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included. The calculation of diluted earnings per share excludes 39,656,954 Class B units, 965,761 Class C units and 1,365,065 Class D units of the Partnership outstanding as of March 31, 2025, 45,030,959 Class B units and 1,852,212 Class C units of the Partnership outstanding as of March 31, 2024, and 46,420,141 Class B units and 2,514,085 Class C units of the Partnership outstanding as of March 31, 2023, which are exchangeable into Class A common stock under the if-converted method, as the inclusion of such shares would be anti-dilutive. The calculation of diluted earnings per share excludes 69,870 PRSUs outstanding as of March 31, 2025 as the related performance target has not been met as of March 31, 2025. 178 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) As the Company was in a net loss position for the year ended March 31, 2025, the calculation of diluted earnings per share excludes potential shares of Class A common stock for 1,024,007 outstanding RSUs, as the inclusion of such shares would be anti-dilutive. As the Company was in a net loss position for the year ended March 31, 2023, the calculation of diluted earnings per share excludes potential shares of Class A common stock for 1,775,732 outstanding RSUs, 2,566,566 Class B2 units and 23,417 Class B units issuable pursuant to anti-dilution rights in connection with the vesting of Class B2 units that are convertible into Class A common stock under the if-converted method, as the inclusion of such shares would be anti-dilutive. 13. Related Party Transactions The Company considers its directors, greater than 5% beneficial owner of any class of the Company’s stock, senior executives, employees and equity method investments to be related parties. A substantial portion of the Company’s management and advisory fees and carried interest allocations is earned from various StepStone Funds. The Company earned net management and advisory fees from the StepStone Funds of $ 570.9 million, $ 390.5 million and $ 335.6 million for the years ended March 31, 2025, 2024 and 2023, respectively. The Company earned incentive fees from the StepStone Funds of $ 22.6 million, $ 9.1 million and $ 3.0 million for the years ended March 31, 2025, 2024 and 2023, respectively. Carried intere st allocation revenues earned from the StepStone Funds totaled $ 301.2 million, $ 176.3 million and $( 122.3 ) million for the years ended March 31, 2025, 2024 and 2023, respectively. Legacy Greenspring carried intere st allocation revenues earned from certain legacy Greenspring funds for which the Company has no direct economic interests totaled $ 74.3 million, $( 75.2 ) million, and $( 452.2 ) million for the years ended March 31, 2025, 2024 and 2023, respectively. Due from affiliates in the consolidated balance sheets consists primarily of fees and accounts receivable from the StepStone Funds, advances made on behalf of the StepStone Funds for the payment of certain organization and operating costs and expenses for which the Company is subsequently reimbursed, amounts due from employees and loans due from affiliated entities, as set forth below. As of March 31, 2025 2024 Amounts receivable from StepStone Funds $ 65,765 $ 40,588 Amounts receivable from employees 12,919 13,450 Amounts receivable from loans 14,039 13,493 Total due from affiliates $ 92,723 $ 67,531 Due to affiliates in the consolidated balance sheets consists primarily of amounts payable to certain non-controlling interest holders in connection with the Tax Receivable Agreements, amounts payable to the StepStone Funds and distributions payable to certain employee equity holders of consolidated subsidiaries, as set forth below. As of March 31, 2025 2024 Amounts payable to non-controlling interest holders in connection with Tax Receivable Agreements $ 313,749 $ 206,841 Amounts payable to StepStone Funds 18,072 5,844 Distributions payable to certain employee equity holders of consolidated subsidiaries — 233 Total due to affiliates $ 331,821 $ 212,918 179 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The Company made payments of $ 9.8 million, $ 10.3 million, and $ 6.0 million during the years ended March 31, 2025, 2024 and 2023, respectively, under the Tax Receivable Agreements. 14. Stockholders’ Equity and Redeemable Interests Stockholders’ Equity The Company has two classes of common stock outstanding, Class A common stock and Class B common stock. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval. Holders of Class A common stock are entitled to receive dividends when and if declared by the board of directors. Holders of the Class B common stock are not entitled to dividends in respect of their shares of Class B common stock. The Class C and Class D (further described below) limited partnership interests of the Partnership have substantially the same rights and obligations as are applicable to the existing holders of Class B units of the Partnership. The Company has no ownership interest in the Class C and Class D units, which are held by certain employees of the Company. The Company has entered into agreements with the Class C limited partners of the Partnership (the “Class C Exchange Agreement”) and Class D limited partners of the Partnership (the “Class D Exchange Agreement”) to allow for the exchange of Class C units and Class D units, respectively, to shares of Class A common stock of the Company on a one -for-one basis, subject to certain restrictions, as further described below in respect of the Class D Exchange Agreement. The following table shows a rollforward of the Company’s shares of common stock outstanding since March 31, 2024: Class A Common Stock Class B Common Stock March 31, 2024 65,614,902 45,030,959 Class A common stock issued in exchange for Class B Partnership units 7,963,988 ( 7,963,988 ) Class A common stock issued in exchange for Class C Partnership units 886,451 — Class A common stock issued in exchange for Class D Partnership units 901,354 — Class A common stock issued for vesting of RSUs, net of shares withheld for employee taxes 811,503 — Class A common stock issued for purchase of asset class non-controlling interests 513,394 — Class A common stock issued under ESPP 69,807 — Class B common stock purchased at par value in connection with vesting of Class B2 units (1) — 2,589,983 March 31, 2025 76,761,399 39,656,954 _______________________________ (1) Includes 23,417 Class B units issued pursuant to anti-dilution rights in connection with the vesting of Class B2 units. The Company has 25,000,000 authorized shares of preferred stock, par value of $ 0.001 per share, and as of March 31, 2025, no shares of preferred stock were issued or outstanding. The Company records a reallocation adjustment between SSG stockholders’ equity, non-controlling interests in the Partnership and non-controlling interests in subsidiaries to reflect the impact of changes in economic ownership percentages during the period and adjust previously recorded equity transactions to the economic ownership percentage as of the end of each reporting period. 180 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) In March 2025, the Company issued 470,300 shares of Class A common stock to certain limited partners of the Partnership in exchange for 470,300 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to an agreement with the Class B limited partners (the “Class B Exchange Agreement”) to allow for exchange of Class B units of the Partnership to shares of Class A common stock of the Company on a one -for-one basis, subject to certain restrictions. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 171,905 shares of Class A common stock to certain limited partners of the Partnership in exchange for 171,905 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company. In December 2024, the Company issued 2,354,788 shares of Class A common stock to certain limited partners of the Partnership in exchange for 2,354,788 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class B Exchange Agreement. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 75,642 shares of Class A common stock to certain limited partners of the Partnership in exchange for 75,642 Class C units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class C Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 729,449 shares of Class A common stock to certain limited partners of the Partnership in exchange for 729,449 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company. In September 2024, the Company issued 312,112 shares of Class A common stock to certain limited partners of the Partnership in exchange for 312,112 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class B Exchange Agreement. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 34,027 shares of Class A common stock to certain limited partners of the Partnership in exchange for 34,027 Class C units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class C Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company. Also in September 2024, the Company conducted an underwritten public offering of 4,099,997 shares of Class A common stock at a public offering price of $ 50.00 per share. The Company used all of the net proceeds from the offering, after underwriting discounts and commissions and expenses, to purchase (i) 300,000 shares of Class A common stock of the Company from certain selling stockholders, (ii) 3,094,981 Class B units of the Partnership from certain holders thereof, including certain directors and executive officers of the Company, and (iii) 705,016 Class C units of the Partnership from certain holders thereof. 3,094,981 shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and 3,799,997 Class A units of the Partnership were issued to the Company. In June 2024, the Company issued 1,731,807 shares of Class A common stock to certain limited partners of the Partnership in exchange for 1,731,807 Class B units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class B Exchange Agreement. A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to the Company. The Company also issued 71,766 shares of Class A common stock to certain limited partners of the Partnership in exchange for 71,766 Class C units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class C Exchange Agreement, and a corresponding number of Class A units of the Partnership were issued to the Company. 181 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Purchase of Asset Class Non-Controlling Interests On February 7, 2024, SSG and the Partnership entered into agreements (the “Transaction Agreements”) with each of SRA, SRE and SPD (the “Asset Class Entities”), their respective asset class heads as seller representatives, the seller parties signatory thereto, and certain other parties. The Transaction Agreements provide a path to the Partnership owning all of the outstanding equity interests of the Asset Class Entities over a defined period of time. The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) newly-created Class D equity interests (“Class D units”) in the Partnership with terms substantially similar to the Partnership’s existing Class C units, in the case of SRA and SRE, or shares of the Company’s Class A common stock, in the case of SPD and (ii) cash (at the discretion of the Company for all exchanges except the initial exchange), in up to ten annual exchanges (increased to up to fifteen annual exchanges in certain circumstances in case of the sellers of SRA equity interests). The Transaction Agreements allow for issuance of up to 75 million shares as consideration for settlement of the transaction. The portion of the equity interests to be acquired in each annual exchange is set forth in an exchange schedule attached to each Transaction Agreement and is approximately 5 % of each Asset Class Entity on each contemplated annual exchange date. The amount of consideration to be delivered will be calculated using exchange ratios determined each year based on a formula establishing an assumed value of each Asset Class Entity based on its estimated adjusted net income, relative to an adjusted trading multiple for the Company’s Class A common stock relative to the Company’s estimated adjusted net income. The Transaction Agreement specifies a minimum adjusted trading multiple for the exchange to take place, in which case if not met the exchange would be skipped and combined in a subsequent year if and when the minimum adjusted trading multiple was met. Therefore, the non-controlling interests subject to the Transaction Agreements are not mandatorily redeemable as of March 31, 2025. On the effective date of the Transaction Agreements, the Company reclassified the carrying value of the non-controlling interests in the Asset Class Entities from permanent equity to redeemable equity and remeasured the non-controlling interests at their redemption value as potential cash settlement could not be attributable to any individual non-controlling interest unit and the Company determined that redemption of the equity instruments was probable. After the notification period 10-days prior to the Initial Reference Date, the individual units subject to the first exchange became irrevocable and the Company separated the carrying value for all of the equity instruments related to the subsequent exchanges to occur after the initial exchange and reclassified these interests into permanent equity at their then carrying value given that settlement of subsequent exchanges is within the Company’s control. On April 1, 2024, certain of the Company’s subsidiaries underwent transactions to effect unitization of the outstanding classes of limited partnership interests. The economic rights and obligations of limited partnership interest holders were the same immediately prior to the unitization as immediately after the unitization. The outstanding classes of limited partnership interests, including the class of interests relating to awards of carried interest allocations granted to employees, were essentially combined into a single class of limited partnership interest and redesignated into units. The class of interests relating to awards of carried interest allocations granted to employees were previously accounted for as compensation arrangements under ASC 710, Compensation , and presented as carried interest-related compensation expense. The transaction was considered to be a transaction amongst equity holders, and the Company did not recognize any incremental compensation cost related to settlement of the accrued carried interest-related compensation. Also on April 1, 2024, the Company exchanged certain ordinary shares in the SPD subsidiary and paid $ 5.4 million to purchase certain preferred shares in SPD with liquidation preference rights in connection with the Transaction Agreements. There was no change in the Company’s economic interest in SPD as a result of the transaction. 182 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) On May 31, 2024, the Company completed the first annual exchange (the “2024 Exchange”) to acquire approximately 5 % of the equity interests of each of SRA, SRE and SPD pursuant to the Transaction Agreements. As a result of the 2024 Exchange, the Partnership now owns approximately 54 % of the outstanding equity interests of SRA, 56 % of the outstanding equity interests of SRE and 54 % of the outstanding equity interests of SPD. The aggregate consideration paid by the Company in the 2024 Exchange was approximately (i) $ 13 million in cash, (ii) 513,394 shares of the Company’s Class A common stock and (iii) 2,239,185 Class D units of the Partnership. In connection with the transactions contemplated by the SRA Transaction Agreement and SRE Transaction Agreement, SSG and the Partnership entered into a Class D Exchange Agreement at the closing of the 2024 Exchange on May 31, 2024. The Class D Exchange Agreement provides, among other things, sellers under the SRA Transaction Agreement and SRE Transaction Agreement with the ability, in certain circumstances and subject to certain conditions, to exchange the Class D units issued to them on a one -for-one basis with shares of the Company’s Class A common stock, par value $ 0.001 . In addition, the Class D Exchange Agreement restricts the exchange of the Class D units issued to such sellers, which restriction applies for a maximum of one year (or two years if a Transaction Agreement Exchange (as defined in the Class D Exchange Agreement) constitutes an Acceleration Exchange (as defined in the Class D Exchange Agreement)), subject to certain exceptions. The Company accounts for adjustments to the redemption value of a redeemable equity instrument that is currently redeemable by adjusting the carrying value of the equity instrument to the maximum redemption value at each reporting period based on conditions that exist as of the reporting date. If the redeemable equity instrument is probable of becoming redeemable in the near future, the carrying value of a redeemable equity instrument is adjusted to the redemption value immediately as changes occur based on conditions that exist at that date or at each reporting date. For redeemable equity instruments either not redeemable or probable of becoming redeemable in the near future, no adjustment to the carrying value is made until it is probable that the equity instrument will become redeemable. The Company recognizes adjustments to the carrying value of redeemable equity instruments with charges against retained earnings, or to additional paid-in-capital in the absence of retained earnings. As of March 31, 2025, the Company determined that redemption of the redeemable non-controlling interests in subsidiaries was probable and presented the carrying value at the redemption amount based on the conditions that existed as of that date of $ 6.3 million in the consolidated balance sheets within redeemable non-controlling interests in subsidiaries. Dividends and Distributions Dividends and distributions are reflected in the consolidated statements of stockholders’ equity when declared by the board of directors. Dividends are made to Class A common stockholders and distributions are made to limited partners of the Partnership and holders of non-controlling interests in subsidiaries. 183 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The following table presents information regarding quarterly dividends on Class A common shares for the periods indicated: Quarterly Fiscal Period 1 Dividend Payment Date Dividend Per Share of Class A Common Stock First quarter June 30, 2022 $ 0.20 Second quarter September 15, 2022 0.20 Third quarter December 15, 2022 0.20 Fourth quarter March 15, 2023 0.20 Total dividends paid in FY2023 $ 0.80 First quarter June 30, 2023 $ 0.20 Supplemental 2 June 30, 2023 0.25 Second quarter September 15, 2023 0.21 Third quarter December 15, 2023 0.21 Fourth quarter March 15, 2024 0.21 Total dividends paid in FY2024 $ 1.08 First quarter June 28, 2024 $ 0.21 Supplemental 2 June 28, 2024 0.15 Second quarter September 13, 2024 0.24 Third quarter December 13, 2024 0.24 Fourth quarter March 14, 2025 0.24 Total dividends paid in FY2025 $ 1.08 _______________________________ (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 years 2023 and 2024, respectively. Redeemable Non-Controlling Interests The following table summarizes the activities associated with the redeemable non-controlling interests in Consolidated Funds: Year Ended March 31, 2025 2024 Beginning balance $ 102,623 $ 24,530 Contributions 240,256 62,255 Redemption of redeemable non-controlling interests ( 18,713 ) — Net income 53,731 15,838 Ending balance $ 377,897 $ 102,623 184 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) The following table summarizes the activities associated with the redeemable non-controlling interests in subsidiaries: Year Ended March 31, 2025 2024 Beginning balance $ 115,920 $ — Reclassification from permanent equity at redemption value — 1,086,492 Net income 758 5,782 Reclassification to permanent equity — ( 976,354 ) Redemption of redeemable non-controlling interests ( 110,351 ) — Ending balance $ 6,327 $ 115,920 15. Commitments and Contingencies Litigation In the ordinary course of business, and from time to time, the Company may be subject to various legal, regulatory and/or administrative proceedings. The Company accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such proceedings, based on information known by management, the Company does not expect a potential liability related to any current legal proceedings or claims that would individually or in the aggregate materially affect its consolidated financial statements as of March 31, 2025. Lease Commitments The Company leases offices in 28 cities in North America, South America, Europe, Asia and Australia, and certain equipment subject to operating lease agreements expiring through 2039, some of which may include options to extend or terminate the lease. As of March 31, 2025, there were no finance leases outstanding. The components of lease expense included in general, administrative and other expenses in the consolidated statements of income (loss) were as follows: Year Ended March 31, 2025 2024 2023 Operating lease cost (1)(2) $ 16,190 $ 15,578 $ 10,983 Variable lease cost 1,269 459 1,375 Sublease income ( 1,842 ) ( 1,851 ) ( 1,778 ) Total lease cost $ 15,617 $ 14,186 $ 10,580 _______________________________ (1) Operating lease cost includes an immaterial amount of short-term leases. (2) Includes a gain of $ 0.1 million and $ 2.7 million for the years ended March 31, 2024 and 2023, respectively, related to lease remeasurement adjustments due to a reduction in lease terms. 185 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Supplemental cash flow information related to leases was as follows: Year Ended March 31, 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 15,577 $ 12,650 $ 10,613 Weighted-average remaining lease term for operating leases (in years) 10.7 11.4 12.1 Weighted-average discount rate for operating leases 4.7 % 4.7 % 4.6 % As of March 31, 2025, maturities of operating lease liabilities were as follows: FY2026 $ 17,028 FY2027 15,736 FY2028 13,596 FY2029 15,603 FY2030 15,899 Thereafter 72,308 Total lease liabilities 150,170 Less: Imputed interest ( 36,651 ) Total operating lease liabilities $ 113,519 Unfunded Capital Commitments As of March 31, 2025 and 2024, the Company, generally in its capacity as general partner or managing member of the StepStone Funds, had unfunded commitments totaling $ 125.0 million and $ 115.7 million, respectively. The $ 125.0 million and $ 115.7 million of unfunded commitments as of March 31, 2025 and 2024, respectively, exclude $ 47.8 million and $ 67.8 million, respectively, related to commitments held by general partner entities for certain funds in which the Company does not hold any direct economic interests, including the legacy Greenspring funds. Carried Interest Allocations Carried interest allocations are subject to reversal in the event of future losses, to the extent of the cumulative revenues recognized by the Company in income to date. Additionally, if the Company has received net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company may be obligated to repay previously distributed carried interest that exceeds the amounts to which the Company is ultimately entitled. In these situations, a liability is accrued for the potential clawback obligation if amounts previously distributed to the Company would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life. As of March 31, 2025 and 2024, no material amounts for potential clawback obligations had been accrued. This contingent obligation is normally reduced by income taxes that the Company has paid related to the carried interest allocations. As of March 31, 2025, the maximum amount of carried interest allocations (excluding legacy Greenspring carried interest allocations) attributable to the Company subject to contingent repayment was an estimated $ 355.0 million, net of tax, assuming the fair value of all investments was zero, a possibility that the Company views as remote. 186 Table of Contents StepStone Group Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share amounts and where noted) Indemnification Arrangements In the normal course of business and consistent with standard business practices, the Company has provided general indemnifications to its limited partners, officers and directors when they act in good faith in the performance of their duties for the Company. The terms of these indemnities vary from contract to contract. The Company’s maximum exposure under these arrangements cannot be determined as these indemnities relate to future claims that may be made against the Company or related parties, but which have not yet occurred. No liability related to these indemnities has been recorded in the consolidated balance sheets as of March 31, 2025 and 2024. Based on past experience, management believes that the risk of loss related to these indemnities is remote. 16. Employee Benefits The Company provides defined contribution plans covering employees subject to minimum age and service guidelines. Eligible employees may contribute a percentage of their annual compensation subject to statutory guidelines. The Company makes non-discretionary contributions to the plans, which amounted to $ 6.6 million, $ 6.0 million and $ 4.6 million for the years ended March 31, 2025, 2024 and 2023, respectively, and are included in cash-based compensation in the consolidated statements of income (loss). One of the Company’s subsidiaries with non-U.S. operations maintains a defined benefit pension plan (the “Plan”). The Plan covers certain non-U.S. employees and provides benefits to such employees upon retirement, disability and/or death. As of March 31, 2025 and 2024, the Plan’s assets totaled $ 40.1 million and $ 32.4 million, respectively. As of March 31, 2025 and 2024, the underfunded pension obligation, based on the latest actuarial determination, was $ 1.0 million and $ 2.6 million, respectively, and is included in accrued compensation and benefits in the consolidated balance sheets. Net period benefit cost recognized was $ 1.3 million, $ 1.0 million and $ 0.5 million for the years ended March 31, 2025, 2024 and 2023, respectively, which is included in cash-based compensation in the consolidated statements of income (loss). 17. Segment Reporting The Company operates as one business, a fully-integrated private markets solution provider. The Company’s chief operating decision maker (“CODM”), who is the Company’s chief executive officer, utilizes a consolidated approach to assess the performance of and allocate resources to the business. Accordingly, management has concluded that the Company consists of a single operating segment and single reportable segment for accounting and financial reporting purposes. The Company’s single reportable segment earns substantially all its revenue from management, advisory, and performance fees. The CODM manages the Company on a consolidated basis and utilizes GAAP net income (loss) as presented in the consolidated statements of income (loss) as the primary financial measure used to assess the performance of and allocate resources to the business. The CODM regularly reviews the GAAP consolidated statements of income (loss) including the revenue, expense and other captions as presented in the Company’s periodic filings. There are no other significant expenses or specified revenue and expense categories reviewed by the CODM other than as reflected in the consolidated statements of income (loss). The CODM reviews segment assets at the consolidated level within the consolidated balance sheets, as there is no difference between segment assets and total consolidated assets. As the Company operates as a single segment, the accounting policies utilized by the segment are consistent with those included in the consolidated financial statements here within. 18. Subsequent Events On May 22, 2025, the Company announced a quarterly cash dividend of $ 0.24 per share of Class A common stock and a supplemental cash dividend of $ 0.40 per share of Class A common stock, both payable on June 30, 2025 to holders of record as of the close of business on June 13, 2025. 187 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.