Triumph Financial, Inc. 2026 Q3 Earnings Call

Good morning. It's 9:30 in Dallas, and we're ready to get started. Thanks for joining us this morning, and for your interest in our third quarter results. We're glad you're here. Aaron's shareholder letter, published last evening, outlines a quarter of strong operating progress. Transportation revenue grew materially, margins expanded in factoring and payments, and LoadPay continued to gain scale. The letter also discusses the freight environment, our evolving North Star metrics, and the work underway to translate the investments we have made into greater operating leverage and earnings. That letter and our quarterly results will form the basis of today's discussion. Before we begin, I would like to remind you that this conversation may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ. The company undertakes no obligation to publicly revise any forward-looking statement.

For details, please refer to the safe harbor statement in our shareholder letter published last evening. All comments made during today's call are subject to that safe harbor statement. With that, I'd like to turn the call over to Aaron for a welcome and to kick off our Q&A.

Aaron? Thank you, Luke. Good morning, everyone, and thank you for joining us.

Last evening, we released our shareholder letter. By way of introduction, let me reiterate its opening message, because I've learned that if you have something important to say, you should probably say it multiple times. What we wrote is, we told investors we would invest through the freight cycle, and we did exactly that. Not everyone agreed with the strategy, but we were true to our word. Investors should now expect that same level of commitment as we take the steps necessary to translate that potential we built into earnings performance consistent with our historical results, and beyond. Doing so will demonstrate the returns on the investments we have made. Our priorities have evolved, but our commitment to delivering on what we say we will do has not.

With that, I'll turn the call over for questions.

Sure. The first thing I would say is, you've known us a long time, Joe. If we tell you that there's $20 million of efficiencies to go get, you should assume that we have a pretty good idea of what we're going to do. I don't know that this is the appropriate venue to give you specifics on where those efficiencies are. What I would say is, you should expect those efficiencies much sooner than the back half of next year.

Two things, Joe, to your question. The reason that it is more sensitive to changes in invoice prices than it was before is because we've got more of it on our balance sheet. We're starting from a higher base. So from a percentage basis, it hasn't moved a lot, but when we reran those numbers, we've got a higher base of revenue to work with. The reason that that $12 million goes to $8.5 million comes down to funding costs. If you look at our factoring business, that revenue number, we haven't really talked about that in this perspective a whole lot, but about a quarter, roughly, of our factoring revenue is given back to incremental funding costs. So that's the difference between the $12 million and the $8.5 million.