The Golub Capital Middle Market Report is the first and only report based on the actual performance of private middle market companies. Issued in advance of public company earnings season, the report is a unique source of timely information for investors and market analysts.

Lawrence E. Golub, CEO of Golub Capital, and Dr. Edward I. Altman, Professor of Finance at New York University’s Stern School of Business, are pleased to present the Golub Capital Altman Index.

Earnings in the U.S. Middle Market Are Booming, Even Compared to Strong, Pre-Covid Q2 2019 Results

According to the Golub Capital Middle Market Report
Featuring the Golub Capital Altman Index

Q2 2021 Earnings Grew 31% vs. Q2 2019

The Golub Capital Altman Index can provide early insight into financial performance of public companies and GDP in advance of earnings season.

SPECIAL EDITION

GOLUB CAPITAL ALTMAN INDEX COMPARISON PRE- AND POST-COVID April-May 2021 vs. April-May 2019

  REVENUE EARNINGS
Aggregate 20.6% 31.5%
Consumer 21.4% 25.0%
Healthcare 4.4% 18.1%
Industrials 2.4% 20.0%
Technology 27.0% 52.6%

Source: Golub Capital Internal Data.
This table reflects a two-year growth period.

This quarter’s Golub Capital Middle Market Report compares April and May 2021 revenue and earnings of middle market private companies in the Golub Capital Altman Index to revenue and earnings in April and May 2019. This analysis is intended to provide greater insight into economic conditions than the report’s typical year-over-year comparisons, which reflect the impact of Covid-related lockdowns in April and May 2020. The year-over-year data is provided in the appendix for continuity purposes.

Middle market private companies in the Golub Capital Altman Index experienced EBITDA growth of 31% and revenue growth of 21% in April and May 2021 compared to their April and May 2019 earnings and revenue. The data in this special edition report reflects the median performance of approximately 130 companies that were in the Golub Capital Altman Index in both periods.

Lawrence E. Golub, CEO of Golub Capital, said, “The U.S. economic boom continues in Q2. Revenue and earnings growth in April and May 2021 were remarkably strong relative to April and May 2019, which was also a strong period. The 21% 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. This indicates that growth in the second quarter is not just a recovery from Covid; it’s a reflection of a booming economy.”

Dr. Edward I. Altman said, “Our analysis looks at growth rates on a company-by-company basis, giving us a clean comparison of the ongoing boom to the strong pre-Covid economy of 2019. We think it is challenging to extract insight from year-over-year growth rates given the significant shutdown in April and May 2020. That said, it is notable that the Technology sector experienced year-over-year revenue and earnings growth in excess of 20%, as shown in the appendix. These companies generally were not impacted by Covid-related lockdowns, so we believe their strong year-over-year growth reflects fundamental strength as opposed to an ‘easy comp’ to the Covid period. The Technology companies in the Golub Capital Altman Index primarily serve the B2B market, so we expect strong growth to continue as companies invest in productivity-enhancing solutions in anticipation of potentially higher labor costs.”

The Golub Capital Altman Index (“GCAI”), which is produced by Golub Capital in collaboration with renowned credit expert Dr. Edward I. Altman, is the first and longest-running index based on actual revenue and earnings (defined as earnings before interest, taxes, depreciation and amortization, or “EBITDA”) for middle market companies. It measures the median revenue and earnings growth of more than 150 private U.S. companies in the loan portfolio of Golub Capital, a leading middle market lender. Reported shortly before public company quarterly earnings season, the GCAI has served as a reliable indicator of the overall growth rates in revenue and earnings of public companies in market indexes such as the S&P 500 and S&P SmallCap 600 (“S&P 600”), as well as quarterly Gross Domestic Product (“GDP”), according to statistical back-testing dating back to 2012, when data began to be tracked.

The size and diversity of the Golub Capital loan portfolio ensure that the confidentiality of all company-specific information used in the index is maintained in both the aggregate and industry segment data.

We believe the results (1) are representative of the general performance of middle market companies, which are a major contributor to U.S. private sector employment; (2) can be easily compared to the performance of the public companies that make up major stock indexes; (3) are relevant to the aggregate economic performance of the U.S. economy and (4) provide timely information for the investment community.

The companies in the GCAI operate in a wide range of industries. Results are provided for the total universe of GCAI constituents and by industry segment. Given the index’s limited exposure to Financials, Utilities, Energy and Materials, comparisons are made to the S&P 500 and S&P 600 as well as to “adjusted” versions of those indexes that exclude the aforementioned sectors.

 

About Golub Capital

Golub Capital is a market-leading, award-winning direct lender and credit asset manager, with over $40 billion of capital under management. Golub Capital specializes in delivering reliable, creative and compelling financing solutions to companies backed by private equity sponsors. The firm’s sponsor finance expertise also forms the foundation of its Late Stage Lending, Broadly Syndicated Loan and Opportunistic Credit investment programs. Across its activities, Golub Capital nurtures long-term, win-win partnerships that inspire repeat business from private equity sponsors and investors. Founded over 25 years ago, Golub Capital today has over 550 employees and lending offices in Chicago, New York, San Francisco and London. 

 

About Dr. Edward I. Altman

A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor of Finance, Emeritus at the NYU Stern School of Business, and Director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. He is currently an advisor to several foreign central banks. Professor Altman has published or edited two-dozen books and over 150 articles in scholarly finance, accounting and economic journals. He has been inducted into the Fixed Income Analysts Society Hall of Fame, served as President of the Financial Management Association, was an FMA Fellow, and was amongst the inaugural inductees into the Turnaround Management Association Hall of Fame. He received his MBA and Ph.D. in Finance from the University of California, Los Angeles.

Appendix: GCAI Revenue and Earnings Growth

Year-Over-Year (“YoY”) Growth

REVENUE EARNINGS
Q2 2021 38.1% 80.8%
Q1 2021 3.2% 16.3%

Key Sectors Q2 2021 (YoY)

REVENUE EARNINGS
Consumer 90.1% 238.4%
Healthcare 98.4% 227.7%
Industrials 19.0% 16.9%
Technology 20.3% 28.1%

Revenue Growth (Quarterly YoY)

Earnings Growth (Quarterly YoY)

Revenue Growth (Quarterly YoY) GCAI vs. Adj. Indexes

Earnings Growth (Quarterly YoY) GCAI vs. Adj. Indexes

Appendix: GCAI Results by Sector
Additional information can be found below regarding sector trends in the Golub Capital Altman Index.

Consumer

Healthcare

Industrials

Technology

1The Golub Capital Altman Index (GCAI) data for Q1 2020, Q2 2020 and Q2 2021 are presented solely for the purpose of continuity. Readers are encouraged to interpret the data from those periods with caution. The GCAI is designed to offer early insight into the performance of the U.S. economy, based on data from the first two months of each calendar quarter. GCAI results for Q1 2020 were based on data from January and February 2020 and did not reflect the economic impact of the COVID-19 pandemic in March 2020. GCAI results for Q2 2020 were based on data from April and May 2020 and did not reflect the meaningful reopening of the U.S. economy in June 2020. GCAI results for Q2 2021 were based on data from April and May 2021 compared to April and May 2020, when many businesses were affected by lockdowns and other restrictions.

Important Disclosure

The Golub Capital Altman Index is provided as an indicator only, and does not constitute investment advice or the offer to sell or a solicitation to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future performance, or future financial conditions. Some of these statements reflect opinions based upon the data presented in the Index, and these opinions may be incorrect. Actual results could vary materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but the information has not been verified independently by Golub Capital. Golub Capital makes no warranty or representation as to the accuracy or completeness of such third-party information.

The Golub Capital Altman Index measures the actual revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) growth of US middle market private companies for the first two months of each calendar quarter and provides insight into anticipated quarterly performance of US public companies. The index is based on aggregated data from approximately 150 companies in the loan portfolio of Golub Capital, a leading middle market lender.

Reported shortly before public company earnings season, the performance of the Golub Capital Altman Index has been highly correlated with the median growth rates in revenue and EBITDA of the companies in the S&P 500, S&P SmallCap 600, and Russell 2000 indexes, as well as quarterly Gross Domestic Product (GDP), since data began to be tracked in 2012.

For a white paper detailing the methodology behind the Golub Capital Altman Index, please click the download button.

Economy is booming, but that doesn’t mean price stability, says Lawrence Golub
CNBC – April 13, 2021
Watch Video
CFOs at U.S. Midmarket Companies Predict Revenues Will Rebound
The Wall Street Journal – January 12, 2021
Read Article
Industrials Particularly Strong Coming into Q4: Golub Capital
CNBC – January 15, 2020
Watch Video
Midmarket Private Companies See Earnings Rise Despite Softening Global Growth
The Wall Street Journal – October 16, 2019
Read Article
US Companies Are Having Trouble Filling Demand: Golub Capital CEO
CNBC – October 10, 2019
Watch Video
Golub Capital CEO Discusses the Second Half of Earnings Season
CNBC – July 30, 2019
Watch Video
Here are the Three Stories to Keep in Mind Heading into Earnings Season
CNBC – April 11, 2019
Watch Video
Small Private Firms See Surge in Fourth-Quarter Earnings
The Wall Street Journal – January 11, 2019
Read Article
US economy is booming, says Golub Capital CEO
CNBC – January 10, 2019
Watch Video
Middle Market Private Companies Extend Record-Setting Revenue Growth Streak
The Wall Street Journal – October 12, 2018
Read Article
Earnings of Middle-Market Private Companies Jump 12.6% in Q2
The Wall Street Journal – July 13, 2018
Read Article
Power Lunch
CNBC – July 12, 2018
Watch Video
U.S. Middle Market Sees Double Digit Revenue Growth in Q1/18 Report
ABL Advisor – April 18, 2018
Read Article
Middle-Market Private Companies Post Slower Earnings Growth
The Wall Street Journal – April 17, 2018
Read Article
Will earnings extend to the bull market?
CNBC – April 16, 2018
Watch Video
Middle-Market Private Companies Earnings Growth Surged in Q4
The Wall Street Journal – January 12, 2018
Read Article
Golub: Middle market companies see 4Q revenue, earnings growth
LCD News – January 12, 2018
Read Article
Great earnings expectations: What to expect from earnings season
CNBC – January 11, 2018
Watch Video
US mid-market earnings grow 12.8% in Q4 2017, up from 4.9% in Q3
Creditflux – January 1, 2018
Read Article
Q1 2021 Golub Capital Middle Market Report
April 13, 2021
Read Article
Q4 2020 Golub Capital Middle Market Report
January 12, 2021
Read Article
Q3 2020 Golub Capital Middle Market Report
October 15, 2020
Read Article
Q2 2020 Golub Capital Middle Market Report
July 17, 2020
Read Article
Q1 2020 Golub Capital Middle Market Report
April 17, 2020
Read Article
Earnings in the U.S. Middle Market Grew by 10% in Q4 2019, According to the Golub Capital Middle Market Report
January 15, 2020
Read Article
Earnings in the U.S. Middle Market Grew by more than 13% in Q3 2019, According to the Golub Capital Middle Market Report
October 11, 2019
Read Article
Earnings in the U.S. Middle Market Grew by more than 12% in Q2 2019, According to the Golub Capital Middle Market Report
July 12, 2019
Read Article
Earnings in the U.S. Middle Market Grew by nearly 10% in Q1 2019, According to the Golub Capital Middle Market Report
April 16, 2019
Read Report
Earnings in the U.S. Middle Market Grew by 13% in Q4 2018, According to the Golub Capital Middle Market Report
January 11, 2019
Read Report
Revenue in the U.S. Middle Market Grew by 12% in Q3 2018, According to the Golub Capital Middle Market Report
October 11, 2018
Read Report
Revenue in the U.S. Middle Market Grew by 11% in Q1 2018, According to the Golub Capital Middle Market Report
April 17, 2018
Read Report
Earnings in the U.S. Middle Market Grew by 12.8% in Q4 2017, According to the Golub Capital Middle Market Report
January 12, 2018
Read Report
Revenue in the U.S. Middle Market Grew by 6.79% in Q3 2017, According to the Golub Capital Middle Market Report
October 11, 2017
Read Report
Revenue in the U.S. Middle Market Grew by 8.94% in Q2 2017, According to the Golub Capital Middle Market Report
July 12, 2017
Read Report
Revenue in the U.S. Middle Market Grows at 8.45% in Q1 2017, According to the Golub Capital Middle Market Report
April 10, 2017
Read Report
Revenue in the U.S. Middle Market Grows at 5.33% in Q4 2016, According to the Golub Capital Middle Market Report
January 11, 2017
Read Report
Revenue in the U.S. Middle Market Continues to Grow at 4.62%, With Information Technology Expanding at 9.85%, According to Golub Capital Middle Market Report
October 7, 2016
Read Report
Revenue in the U.S. Middle Market Continues to Expand at a Healthy Pace of 7.4%, and Industrial Sector (Ex-Energy) Profit Margins Increase Substantially, Although Overall Middle Market Profit Growth Slows, According to Golub Capital Middle Market Report
July 7, 2016
Read Report
Profit Growth Accelerated to 5% in the U.S. Middle Market in Q1 2016, According to Golub Capital Middle Market Report
April 7, 2016
Read Report

Join our mailing list to receive the next
Golub Capital Middle Market Report in your inbox:

  • This field is for validation purposes and should be left unchanged.