An eventful quarter at Triumph Financial produced an earnings report that made some financial numbers seem less important than usual.
But as has been the case with Triumph Financial (NASDAQ: TFIN) for most of its recent history, the company’s communications in its earnings release focuses on financial performance only to a limited degree. There’s far more about strategy and underlying numbers supporting that strategy.
On that front, Triumph Financial’s earnings per share on a GAAP basis of 15 cents per share were 10 cents per share better than forecasts, according to SeekingAlpha. Revenue was slightly higher than forecasts.
However, one of the big developments at Triumph Financial for the quarter boosted that bottom line: the settlement of a long-standing dispute with the United States Postal Service. The settlement had a positive impact on pretax income both for the company’s three-month and six-month net income of $12.4 million and $11.5 million, respectively.
The quarterly benefit of the $12.4 million exceeded net income of $4.42 million.
As a result of the dispute with the USPS, Triumph has been carrying a $19.4 million receivable on its books since the issue first arose. With the settlement, Graft said in his letter that Triumph Financial now has recovered all of that and more.
Dispute goes back to Covenant deal
The just-settled dispute over a wayward payment goes back to the Triumph acquisition of the factoring business of Covenant Logistics (NYSE: CVLG) in 2020.
Triumph’s stock has slid since the earnings release. Triumph Financial’s stock price closed Thursday at $61.99, down from the $63.58 close that occurred just before the earnings release.
On Friday, a day that stocks fell broadly, Triumph closed at $58.62, down 5.44% for the day.
For the freight sector, the Triumph Financial quarterly report has voluminous data that says much about the state of the freight market as well as broader long-range plans for the company. Much of it can be found in CEO Aaron Graft’s accompanying letter to shareholders where he shares not just hard information on his company’s business but a philosophical outlook.
That letter from Graft released Wednesday was longer than usual. Graft even joked about it on the earnings call with analysts–unique among the genre in that it is a video call–when he wondered “not sure how many of you made it through all 34 pages of the letter that was published last evening.”
Positive developments at Triumph Financial, even in the midst of a weak freight market, included the fact that annualized combined revenue in transportation–factoring, payments and intelligence–reached $237 million, up from $206 million in the prior quarter. The USPS settlement is not in that figure.
In his letter, Graft said he believes the opportunity is $1 billion, “and nothing has changed my view.”
The financial impact from the USPS settlement came in Triumph Financial’s factoring segment. Of the group’s 13.3% quarter-on-quarter sequential improvement in revenue, 3.4% of that growth came from the USPS settlement. The group’s operating margin of 48.5% saw 24.7% of that come from the USPS.
Previous Graft letters and earnings call commentary have focused overwhelmingly on the company’s payments network, which provides fast pay and audit services.
EBITDA in the payments sector was positive for the third time in the last four quarters. The payments sector includes the audit functions that Triumph Financial acquired more than four years ago in its purchase of HubTran. It includes the quick pay activities that previously existed under the TriumphPay banner
The positive EBITDA margin in payments was 13.9%. It was slightly negative in the first quarter, and was 0.5% and 8.6% in the last two quarters of 2024, respectively.
Big push on intelligence
But it was Triumph Financial’s relatively new intelligence sector and the second quarter acquisition of Green Screens that got a large amount of attention. The intelligence group also includes the late 2024 purchase of Isometric Technologies Inc. (ISO).
As a group, it is tiny so far: just $1.7 million in revenue for the quarter. But Graft in his letter said the third quarter will be used to establish a “true base line of revenue and margin so investors can measure our performance in future periods.”
The more significant role that Triumph Financial sees for its Intelligence unit is that it grows the entire package of offerings in its “value chain” that Graft laid out in his letter.
It starts with the audit services of the payments sector, which Graft said will create trust among its broker customers. With that trust established, Graft wrote, the broker customers and their truckers will look to Triumph for financing.
The next step will be that some of those customers will request a digital wallet to receive those payments, an offering that is at the core of Triumph’s LoadPay product.
Separately, brokers will want to use the sea of data Triumph Financial holds to aid in their internal pricing models, Graft wrote.
And that gets down to the intelligence unit. “When you offer a data product, broker customers will also realize that you have a broad database of objective metrics on how carriers perform on certain loads, which they will want to help influence their routing guides, so they will ask for that to be added to the data product,” Graft wrote.
One key metric in Triumph Financial’s earnings has been the average invoice size it either processed in its payments segments or factored by its factoring unit. That latter number in particular has long been a focus of investors and others.
That’s a pretty big drop in the average size of the factored #trucking invoice at $TFIN in the second quarter. Lower diesel prices may have had something to do with it but wouldn’t have caused a more than $100 drop. It’s still a freight market that isn’t getting any stronger. pic.twitter.com/PfoK6zmPhS
— John Kingston (@JohnHKingston) July 16, 2025
During the call, Graft said Triumph might have been in error in pushing that number. “We started training investors to look at average invoice size back when all we did was factoring,” Graft said. He said given the wider footprint of the payments unit, the size of the average invoice in that sector was more indicative of market conditions.
But neither number showed any strength in freight markets.
The average invoice size in payments fell sequentially to $1,186, down from $1,222 in the first quarter. But that number was higher than in the prior three quarters, including a year-ago second quarter number of $1,103.
As for the factoring sector, the average invoice size there was $1,663. That is well below the second quarter figure of $1,769 and a year ago number of $1,738.
Kimberly Fisk, the president of Triumph’s factoring segment, said changes in the company’s customer base for its factoring offerings are responsible for some of the decline in the average invoice size in that group.
A change in the factoring customer mix
“As you go upmarket, you might get a diversified mix of carriers that might be doing different types of hauling,” she said on the earnings call. “And so some might do some shorter regional type loads, which will reduce your invoice price.”
If those shorter hauls are taken out of the equation, Fisk said, the average invoice price is closer to $1,200.
Factoring overall has been experiencing solid growth measured by volume. The second quarter figure of 1.7 million invoices purchased came out to a purchased volume of $2.87 billion. That volume is 13.3% more than in the first quarter, but with the lower average invoice size, the purchased volume was only up 6.1%, which is still a solid sequential growth.
Triumph Financial’s Factoring as a Service (FaaS) offering, which offers a platform for third parties to provide their own factoring services to their own customer base, pulled in a significant new partner during the quarter: RXO. Although the RXO (NYSE: RXO) deal was announced this month, after the second quarter’s close, it still could be seen as an extension of the activity at Triumph Financial that director of investor relations Luke Wyss said on the call provided a “noisy quarter.”
The partnership between RXO and Triumph involves both the FaaS offering and LoadPay.
As for LoadPay, Graft’s letter said the company had opened its 2,000th load pay account in June after a soft marketing rollout. By July 14, that number was up at 2,729. The 58 days from customer 1,000 to 2,000 is expected to be less than on the road to 3,000, Graft said.
LoadPay’s digital wallet allows the payments unit at Triumph Financial to make its payments directly to a driver or other customer’s digital wallet.
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