Best-Run Middle Market Firms Turn Uncertainty Into Advantage

The health of the U.S. middle market is usually measured in familiar terms: revenue growth, hiring, capital spending and credit conditions. Those indicators matter. But they increasingly describe the outcome of resilience rather than its source.

In June, 26.7% of middle-market companies were operating at a high level of uncertainty, according to PYMNTS Intelligence. For these firms navigating higher operating costs, uneven demand and persistent uncertainty, the more revealing questions are becoming operational ones.

How quickly can a company turn sales into cash? How much liquidity is trapped in receivables, inventory or inefficient processes? Can management see trouble early enough to respond? And is artificial intelligence (AI) producing measurable business value, or merely adding another line to the technology budget?

The emerging fault line is not simply between companies that are growing and those that are struggling. It is between firms that have built the financial and technological capacity to adapt and those that remain exposed to every shift in demand, cost and payment timing.

See also: Good CFOs Automate but Great CFOs Anticipate

Resilience Is Becoming an Operating System for Middle Market Corporates

Middle market resilience is often mistaken for endurance: the ability to survive difficult conditions until the economy improves. That definition is too passive for the current environment. For many companies, uncertainty is no longer a temporary disruption. It is the normal setting in which executives must make decisions about inventory, hiring, pricing, investment and expansion.

PYMNTS Intelligence data in the 2026 Certainty Project found that 82% of middle market firms operating under high uncertainty missed their 2025 performance targets; high uncertainty also led to slimmer revenue and thinner margins. Looking ahead to this year, 35% of high-uncertainty firms expect shrinking revenue.

Resilience, therefore, is becoming less about maintaining a cash cushion and more about building an operating model capable of responding quickly when assumptions change.

The PYMNTS Intelligence report “Time to Cash™: A New Measure of Business Resilience” found that 77.9% of CFOs see improving the cash flow cycle as “very or extremely important” to their strategy in the year ahead.

That urgency is especially acute across the physical goods economy. According to PYMNTS Intelligence data from March, 27% of heads of payments said their firms faced high uncertainty about the business environment, and that figure rose to 47% among goods companies. Firms experiencing high uncertainty report costs of 6.2% of revenue, more than double the average. Goods firms remain more exposed than services firms, widening the gap in forecasting accuracy across sectors.

Separate PYMNTS Intelligence data found that 4 in 5 middle market firms using external working capital solutions freed an average of $19 million last year, money redirected toward supplier relationships and growth rather than held in reserve. That discipline extends inside the business too. Companies that accelerate receivables, improve inventory visibility and manage supplier payments strategically are not merely polishing their balance sheets. They are increasing the number of choices available to management.

Read more: The $100 Million CFO Doesn’t Keep Score. They Call the Plays.

AI Moves From Experiment to Infrastructure

The distinction between AI as a productivity feature and AI as operating infrastructure is starting to define the middle market’s path forward. AI does not remove uncertainty, but it can reduce the cost of responding to it.

Ben Ellis, senior vice president and global head of Large and Middle Markets at Visa Commercial Solutions, told PYMNTS in March that one finding from the most recent Working Capital Index should recalibrate how finance leaders think about their operations: Among low-performing firms that adopted artificial intelligence for working capital management, cash flow unpredictability dropped from 68% to 17%.

The middle market AI story is therefore becoming less about enthusiasm and more about execution. Some firms are beginning to generate measurable returns through automation, faster decision-making and improved forecasting. Others remain stuck in pilot programs, fragmented deployments or broad productivity initiatives with unclear financial outcomes.

The firms most likely to produce returns are those starting with a defined operating problem rather than a generalized desire to “use AI.” They are also more likely to have the data quality, process consistency and management support needed to turn a technology deployment into a business result.

See also: The 7 AI Terms Every CFO Needs to Understand

Taken together, the working capital and AI findings reveal a middle market that cannot be described as uniformly healthy or unhealthy. It is stratifying by capability.

At one end are firms with strong liquidity management, greater operational visibility and targeted technology investment. These companies are better positioned to continue investing even when economic signals are mixed. Their resilience comes not from certainty about the future, but from confidence in their ability to respond.

At the other end are firms with less efficient cash cycles, weaker data infrastructure and limited evidence that technology spending is generating returns. These businesses may still be profitable and growing, but their margin for error is narrower.

Between them sits a broad group of companies making incremental progress: modernizing finance functions, experimenting with AI and seeking better control over cash without yet achieving a fully integrated operating model.

Those differences should matter to banks, FinTechs, technology providers and investors. The middle market does not need one generic set of solutions. It needs financial and operational tools calibrated to the constraints of specific business models.