Triumph Financial (NYSE:TFIN) executives said the company’s second-quarter results reflected a turning point in the freight market, with higher transportation invoice prices and growth across core transportation-related businesses supporting improved performance.
Vice Chairman and CEO Aaron Graft said the company is operating in “a different market” than it was earlier this year, following comments on the prior earnings call that the freight market “may be changing.”
Graft said that, after adjusting for non-core expenses and other “noise” in the quarter, Triumph’s business model is performing materially ahead of its recent history. He also said the company is seeing validation that its value chain is working as intended.
Higher invoice prices drive outlook sensitivity
In response to a question from Raymond James analyst Joe Yanchunis, Graft said the analyst’s interpretation of the impact of higher transportation invoice prices was “solid.” Yanchunis noted that Triumph’s prior fourth-quarter 2026 EPS target assumed average transportation invoice prices of about $1,800, while the current environment is closer to $2,200.
Graft said Triumph has about a $7 million annualized pre-tax income change for every $100 change in invoice prices over the course of a year.
“That math is pretty straightforward,” Graft said. “Yes, I believe that you’ve characterized that correctly.”
Graft said invoice prices would remain the biggest driver of changes to the company’s outlook, while core trends are “pretty well in place.” He also said Triumph expects continued momentum from customer penetration and sales through the rest of the year.
Chief Financial Officer Brad Voss said expenses are expected to trend modestly higher in 2027, while incentive accruals in the back half of 2026 would reset at the start of next year. Graft added that the company is focused on operational leverage, not just absolute expense levels.
“If expenses increase next year, that can only happen if we grow revenue more than expenses,” Graft said.
Transportation revenue growth expected to exceed target
Asked by KBW analyst Timothy Switzer about Triumph’s prior target for 20% year-over-year transportation revenue growth in the fourth quarter, Graft said the company’s organic growth is running in the mid-teens when separating out the impact of higher invoice sizes.
Graft said Triumph is growing organically by deepening relationships with existing customers and winning new business, including in its factoring segment, despite a shrinking marketplace.
“It’s very difficult for me to see how we won’t eclipse the growth target for transportation revenue growth by a material amount at the end of this year,” Graft said.
He attributed some of the growth to company execution and some to changes in the market, including supply reductions tied to litigation, legislation and regulation, as well as broader market normalization.
Graft said the prior $1,800 invoice environment was unlikely to persist indefinitely because carriers’ input costs had risen to levels that made it difficult for them to earn their cost of capital.
LoadPay growth supported by new product features
David Vielehr, president of LoadPay, said Triumph completed several product additions in the first half of the year, including the ability to offer factoring, banking, fuel integration and intelligence tools within one platform for carriers.
Vielehr said LoadPay has benefited from account growth and higher revenue per account, with revenue growing faster than the number of accounts.
“We think we are uniquely positioned in three ways to keep winning share,” Vielehr said, citing Triumph’s carrier distribution, integrations with more than 400 brokers and the economics of being a bank.
Asked by D.A. Davidson analyst Gary Tenner when LoadPay could reach EBITDA breakeven, Vielehr said Triumph expects LoadPay to begin to be breakeven as it moves through 2027. Graft said he would “love to see it by the end of next year breakeven and continue to grow from there,” while cautioning that his history of predicting the timing of profitability has not been precise.
Factoring margins benefit from pricing and automation
Graft said Triumph is in the “early innings” of using technology and automation to improve the factoring cost structure, adding that the company intends the process to be ongoing.
He said the company had historically prioritized technology for customer-facing products but is now putting greater emphasis on internal efficiency. Graft said automation should increase the number of invoices handled per employee while also improving customer experience.
“All things being equal in what is a cyclical business, I would expect margin to continue to increase because we will get more efficient,” Graft said.
He said he wants the factoring business to move above a 40% operating margin and remain there, which he described as a 5% to 7% return on average assets.
Graft also said factoring has value beyond its own revenue, serving as an entry point into Triumph’s broader transportation technology platform. He said factoring customers can become LoadPay, equipment finance and intelligence customers.
Kim Fisk, president of factoring, said fuel accounts for about 25% of a carrier’s costs, and Triumph estimates fuel represented about 25% of the increase in invoice prices. Graft cautioned that the company cannot isolate the exact impact of fuel with precision because invoice prices reflect multiple inputs, including market tightness and seasonality.
Fisk also said that about 70% of Triumph’s portfolio is broker-related and 30% is shipper-related. She said the company estimates about 65% to 70% of average invoice prices in the large carrier segment are tied to contract-rate assumptions, though she noted the calculation is not precise.
Banking and intelligence updates
Todd Ritterbusch, president of payments and banking, described the second quarter as “a quarter of progress” for the banking segment. He said Triumph earned new business, created additional efficiencies and saw stable core deposit costs.
“I think the outlook is pretty smooth from here,” Ritterbusch said.
On Triumph’s intelligence segment, Graft acknowledged that revenue has not scaled as quickly as expected in the first four quarters since the acquisition of the business.
“It’s disappointing to me Intelligence did not scale faster in the first four quarters,” Graft said. “I won’t explain it away. I’ll just own it.”
However, he said the long-term rationale remains intact because Triumph touches a large volume of brokered freight invoices through audit, payment and factoring activities, giving it data it can provide back to the market.
Ben Volkwyn, head of enterprise data and intelligence, said customer demand has been strong across broker tiers, and the company is working to evolve the offering from a pricing tool into a broader intelligence platform covering pricing, capacity and market insights.
“We clearly need to increase our retention,” Volkwyn said. “We need to make sure that our product has perfect market fit. We listen to our client needs. We need to grow ARR.”
Graft said Triumph expects to update its “North Star” metrics in 2027 to better reflect LoadPay and intelligence as they become more material to the company’s story.
About Triumph Financial (NYSE:TFIN)
Triumph Financial, Inc (NYSE: TFIN) is a financial holding company that operates through its banking subsidiary to provide commercial banking and related financial services. The company focuses on delivering deposit, lending and payment solutions customary to community-oriented banks and regional financial institutions.
Products and services typically offered include commercial and consumer lending, residential mortgage origination and servicing, deposit accounts, cash management and treasury services, and other fee-based banking products.
