US mid-market earnings soar compared to pre-pandemic

Tech sector earnings surge 52% in the second quarter compared to 2019, according to Golub Capital Altman Index.

The US mid-market is thriving, and is even stronger than before the pandemic.

Earnings for mid-market private companies jumped by 31 percent in the second quarter of this year, compared with the same period in 2019, according to a new report published by the Golub Capital Altman Index. Technology companies saw the largest increase in earnings by sector, surging 52.6 percent.

The earnings last quarter are not the only sign of a healthy market.

Revenue of mid-market private companies also experienced significant growth of 21 percent compared to two years ago. Tech revenue, like earnings, posted the biggest sector increase at 27 percent. The index also covers consumer, healthcare and the industrials sectors.

“The US economic boom continues in Q2,” said Lawrence Golub, chief executive officer of Golub Capital, in the report.

The firm believes the high percentage increases from pre- to post-covid directly reflect the US economy bouncing back, even if there was uncertainty in shutdowns as a part of the pandemic.

“The 21 percent revenue growth compared to the pre-covid period is striking because we had been seeing soft year-over-year revenue growth rates for the last several quarters,” Golub said. “This indicates that growth in the second quarter is not just a recovery from covid; it’s a reflection of a booming economy.”

The earnings are not much of a surprise, though. The firm saw it coming.

In June, the Golub Capital Altman Index reported that earnings of mid-market private companies in the first two months of the year, compared with the same period in 2020, spiked to a record 16.3 percent.

The index also reported that first-quarter earnings growth surpassed the 14.9 percent year-over-year increase that was reported in the fourth quarter of 2020.

Both earnings and revenue in the US mid-market grew consecutively this year, as reported by Golub’s index, which shows the signs of healthy private companies in a thriving economy.