StepStone Group Inc. (NASDAQ:STEP) Q2 2023 Earnings Conference Call November 3, 2022 5:00 PM ET

Company Participants

Seth Weiss - MD of Corporate IR

Scott Hart - CEO

Michael McCabe - Head of Strategy & Director

Johnny Randel - CFO

Jason Ment - President & Co-COO

Conference Call Participants

Ben Budish - Barclays

Michael Cho - JPMorgan

Samantha Platt - Bank of America Merrill Lynch

Adam Beatty - UBS

Alex Blostein - Goldman Sachs

Michael Cyprys - Morgan Stanley

Operator

Welcome to the StepStone Fiscal Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session.

I'll now turn the call over to your host, Seth Weiss, Managing Director, Corporate Investor Relations. Mr. Weiss, you may begin.

Seth Weiss

Thank you, and good afternoon. Joining me on the call today are Scott Hart, Chief Executive Officer; Jason, President and Co-Chief Operating Officer; Mike McCabe, Head of Strategy; and Johnny Randel, Chief Financial Officer. During our prepared remarks, we will be referring to a presentation which is available on our Investor Relations website at shareholders.stepstonegroup.com.

Before we begin, I'd like to remind everyone that this conference call as well as the presentation contains certain forward-looking statements regarding the company's expected operating and financial performance for future periods and our plans for future dividends. Forward-looking statements reflect management's current plans, estimates and expectations and are inherently uncertain and are subject to various risks, uncertainties and assumptions.

Actual results for future periods and actual dividends declared may differ materially and those expressed or implied by these forward-looking statements due to changes in circumstances or a number of risks or other factors that are described in the Risk Factors section of StepStone's most recent 10-K. These forward-looking statements are made only as of today, and except as required, we undertake no obligation to update or revise any of them.

In addition, today's presentation contains references to non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, our presentation and our filings with the SEC.

Turning to our financial results for the second quarter of fiscal 2023. We reported a GAAP net loss of $67.1 million for the quarter ended September 30, 2022. The GAAP net loss attributable to StepStone Group, Inc. was $29.2 million. We generated fee-related earnings of $39.0 million, adjusted net income of $37.3 million and adjusted net income error of $0.33. The quarter had no impact from retroactive fees. This compares to retroactive fees in the second quarter of fiscal 2022 that contributed $2.3 million to revenue and $2.1 million to fee-related earnings and pretax adjusted net income.