Now that the books are closed in 2025, one theme stands out clearly across the middle market: disciplined production beats speculative potential.
2025 was not a breakout year. It was not a contraction either. It was a year of stabilization and incremental gains. Revenue growth dipped mid-year but rebounded in Q4, demonstrating resilience despite softer hiring trends. Most companies ultimately closed the year with positive year-over-year revenue growth, and forward-looking expectations entering 2026 remain cautiously optimistic. Larger middle market companies, particularly those in the $100M to <$1B range, continued to outperform smaller peers, reinforcing the advantages of scale in volatile conditions.
Employment growth, however, told a different story. Hiring slowed throughout 2025. Companies did not pursue broad workforce reductions, but expansion plans were tempered. In many cases, leaders chose productivity over payroll growth. Interestingly, reported difficulty in finding qualified workers declined compared to prior years, suggesting better labor-market alignment.
For finance leaders, this translated into improved cost predictability and margin discipline.
Macroeconomic sentiment flattened as the year progressed. Global confidence ticked up slightly in the second half of 2025, national sentiment softened marginally, and local confidence remained steady. What remained consistently strong was industry-level confidence. An overwhelming majority of companies entered 2026 highly confident in their industry’s growth prospects for the next 12 months. Leaders believe in their markets, even if they remain cautious about broader economic signals.
Inflationary pressures and input costs persisted through 2025, though volatility eased compared to the immediate post-pandemic years. Profitability pressures, cost of capital, competitive intensity, and regulatory compliance continued to shape decision-making. Tariffs and trade policy uncertainty required ongoing supplier diversification and pricing strategy adjustments.
These challenges were manageable, but they required constant attention. Technology emerged as a defining strategic theme of the year.
Rather than retreating into defensive cost-cutting, middle market organizations recalibrated investment. AI-enabled tools, business intelligence systems, digitized workflows, and automation of routine financial and operational tasks moved from pilot phases into structured implementation. Integration complexity and cybersecurity concerns remain barriers, but 2025 marked a transition from curiosity to operational deployment.
Revenue growth and profitability improvement remain central entering 2026. Customer retention, sales expansion, and new product development continue to anchor strategic plans.
Market expansion remains attractive, though approached with discipline rather than exuberance.
Resilience has also taken on renewed importance. Supply-chain optimization, risk management frameworks, and climate preparedness are increasingly integrated into long-term capital allocation discussions. These are no longer peripheral initiatives. They are embedded into strategic planning cycles.
For finance leaders, the lesson from 2025 is straightforward.
Performance came not from chasing upside, but from tightening execution. It came from measured investment, sharper operational discipline, and selective technology adoption aligned with ROI. The companies that performed best did not swing for dramatic transformation. They focused on consistent output.
As we move through 2026, that same mindset will matter even more. Production over potential. Execution over expansion. Discipline over distraction.