“Triumph Financial CEO predicts loss for TriumphPay in unique shareholder missive”

In his latest communication to shareholders, Triumph Financial CEO Aaron Graft forecasted that the earnings headline for the quarter might read “TriumphPay experienced a loss this quarter,” just months after the growth segment at the bank had turned EBITDA-positive. As anticipated, TriumphPay reported a negative EBITDA for the quarter. Despite this, Graft emphasized in his shareholder report that Triumph Financial is focused on the long-term success of TriumphPay, citing several positive data points that indicate the strategy is making steady progress.

Triumph Financial, listed on NASDAQ under TFIN, also operates a traditional factoring business alongside TriumphPay. Data from this sector continues to reveal weaknesses in the trucking market, with the average transportation invoice size remaining relatively stagnant over the past few quarters. Graft highlighted that market conditions have softened, as evidenced by decreasing invoice sizes.

Furthermore, Graft acknowledged the challenges facing the freight market, citing weak earnings from industry players like J.B. Hunt, Knight-Swift, and Marten. He emphasized the importance of playing the “long game” with TriumphPay, a segment that focuses on payments and auditing services for brokers, factoring companies, and some shippers. While TriumphPay reported a slight EBITDA loss in the first quarter, improvements were evident compared to the previous year.

Graft also highlighted the addition of new clients to the TriumphPay network, including top freight brokers, suggesting a positive long-term outlook. The company is actively working towards capturing a significant share of the market, with a target revenue stream of $500 million and a serviceable addressable market of $250 million.

Positive EBITDA remains a goal for TriumphPay, with Graft setting a target of reaching 50% of the brokered freight market by the end of the year. The company’s spokesperson mentioned that TriumphPay’s involvement in transactions is steadily increasing, with plans to expand its market share further in the coming months. Despite challenges in the traditional factoring business, Triumph Financial is optimistic about the growth potential of TriumphPay and is focused on achieving long-term success in the industry.