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Triumph Financial, Inc. (TFIN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 produced a net loss to common of $(0.8)M or $(0.03) diluted EPS, driven by non-core expenses (~$3.0M) partially offset by $0.8M gains; non-core items reduced EPS by $0.07 .
  • Payments KPIs improved materially: network invoices +26.8%, network payment volume +26.5%, network engagement 50.4% (+1.7 pts q/q), and average float +8% q/q; EBITDA margin was (0.1)% due to 7.2% non-core expenses .
  • Factoring remained seasonally soft: operating margin 19.24% (down 443 bps q/q), purchased volume down 1.4% q/q; management expects Factoring revenues to at least double over time and sees back-half 2025 revenue growth led by Factoring and Payments .
  • Management reiterated near-term cost discipline (Q2 core opex ~ $99M) and expects Greenscreens to close in Q2, with Intelligence monetization ramping later; NII sensitivity: each 25 bps Fed cut reduces consolidated quarterly NII by $0.5–$1.0M .
  • Versus S&P Global consensus: EPS missed ($-0.03 vs $0.04*), and revenue missed ($100.24M* vs $104.54M*). Narrative catalyst: accelerating monetization (NextGen Audit, repricing legacy clients, LoadPay ramp) and anticipated Q2 closing of Greenscreens . Values retrieved from S&P Global*.

What Went Well and What Went Wrong

What Went Well

  • Payments network density and monetization momentum: network invoices +26.8%, network engagement 50.4%, fee revenue +18.9% y/y; CEO emphasized "almost every metric we report improved… especially in our Payments segment" .
  • Credit metrics improved: NPLs/loans improved 42 bps, classified assets down $61M, credit loss expenses decreased by $3.1M; management expects continued improvement absent a deeper downturn .
  • Strategic progress: LoadPay ramp (accounts 778 at quarter-end, 1,013 by the letter date; funding $5.0M in Q1), and CH Robinson integration underpin back-half monetization; NextGen Audit upgrades and cross-sell added ~$2.4M annualized revenue run-rate . "We must grow revenue throughout the rest of the year… lots of levers to pull" .

What Went Wrong

  • Headline profitability: net loss to common $(0.8)M, EPS $(0.03); Payments EBITDA margin (0.1)% as segment absorbed 7.2% of non-core expense impact .
  • Factoring margin compression and seasonal softness: operating margin fell to 19.24% (−443 bps q/q); yield on average receivables declined to 12.75% due to mix shift toward larger fleets and A/R turns lengthening by ~2 days .
  • Macro/trade uncertainty persists: management cited freight recession and tariffs creating revenue headwinds; Intelligence revenue contribution will be limited until later (post-Greenscreens close) .

Financial Results

Consolidated Income Metrics (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Net Interest Income ($USD Millions)$86.035 $87.807 $84.383
Noninterest Income ($USD Millions)$14.999 $15.751 $17.190
Net Income Available to Common ($USD Millions)$3.357 $3.036 $(0.784)
Diluted EPS ($USD)$0.14 $0.13 $(0.03)
Net Interest Margin (%)7.29% 6.65% 6.49%

Versus S&P Global Consensus (Q1 2025)

MetricConsensus EstimateActual
Revenue ($USD Millions)$104.54*$100.24*
EPS ($USD)$0.04*$(0.03)
# of Estimates (EPS / Revenue)5* / 5*—

Values retrieved from S&P Global*.

Segment Breakdown

Segment Metric ($USD ‘000)Q4 2024Q1 2025
Factoring Total Revenue$38,212 $35,961
Factoring Operating Income$9,046 $6,919
Payments Total Revenue$15,031 $15,184
Payments Pre-tax Operating Income (Loss)$(1,686) $(2,991)
Banking Operating Income$27,007 $27,579
Intelligence Operating Loss$(1,696) $(2,613)

KPIs

Payments KPIsQ1 2024Q4 2024Q1 2025
Invoice Volume (#)5,717,016 6,788,408 7,182,044
Payment Volume ($USD)$6,379,680,000 $7,625,735,000 $8,777,825,000
Network Invoice Volume (#)621,209 567,258 719,531
Network Payment Volume ($USD)$1,035,099,000 $922,927,000 $1,167,464,000
Network Engagement (%)42.7% 48.7% 50.4%
Average Float ($USD)$330,448,000 $410,044,000 $442,901,000
Fee Revenue ($USD)$5,808,000 $6,704,000 $6,903,000
EBITDA Margin (%)(13.2%) 8.6% (0.1%)
Factoring KPIsQ1 2024Q4 2024Q1 2025
Purchased Volume ($USD)$2,469,797,000 $2,747,351,000 $2,707,805,000
Discount Rate (%)1.41% 1.34% 1.31%
Operating Margin (%)19.48% 23.67% 19.24%
Avg Transportation Invoice Size ($)$1,771 $1,767 $1,769

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core Operating ExpensesQ2 2025—~$99M (excl. Greenscreens impact) New
Greenscreens Acquisition ClosingQ2 2025—Expect closing in Q2, integration to enable Intelligence pricing product New
NII Sensitivity to Fed CutsForward—Each 25 bps cut reduces consolidated quarterly NII by $0.5–$1.0M New
LoadPay Accounts YE TargetFY 2025—5,000–10,000 accounts by year-end New
Transportation Revenue TrajectoryFY 2025—Annualized ~$206M now; must rise materially in 2H to support investment Emphasis on 2H growth

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Payments Monetization & Network DensityMonetization through fee growth despite freight recession; pilot FaaS & LoadPay with CHRW Goal to reach 60–65% market share; fee revenue growth, EBITDA improvement KPIs strengthening; repricing legacy clients; network engagement >50% Improving monetization; density rising
AI/ML & AutomationInstant decision model enabling touch-free processing; weekend funding vision Touch-free processing strategy on both broker and carrier sides Continued emphasis on instant decision; small-carrier segment ROI; reduced disputes/chargebacks Expanding deployment
Factoring-as-a-Service (FaaS)Pilot with CHRW; onboarding pipeline discussion CHRW as first FaaS; additional clients expected in 2025/2026 CHRW early phase; second FaaS client targeted 2H25; majority of revenue growth from Factoring Ramp later in 2025
Greenscreens / IntelligenceN/AIntelligence segment plan; high gross margins; neutrality/data quality Expect Q2 close; Intelligence to leverage densest settled payments dataset; >90% gross margin Strategic build; revenue later
Macro/Tariffs & Freight RecessionLongest cycle trough; small trucker ecosystem durability Caution on freight; empathic pricing approach Contract rates −7% y/y; spot −5%; tariff-related volatility noted Persistent headwinds
Credit QualityN/AExpense growth plan and efficiency goals; gearing ratio improvements NPLs down; classified assets down $61M; provision down; cautious on tariff/geography risks Improving but monitored

Management Commentary

  • “We must grow revenue throughout the rest of the year… the cleanest sight line to revenue will come in the back half of the year” .
  • “Network transactions increased 26.8%… Network engagement at just over 50% of truckload brokered freight” .
  • “For the first quarter, we recorded a net loss… non-core expenses just under $3.0M, partially offset by $0.8M gains; EPS negatively impacted by $0.07” .
  • “Upon the closing and full integration of Greenscreens, we expect to have the most valuable rating product in the market” .
  • “For the second quarter we project core operating expenses to be roughly $99 million… absent meaningful revenue growth we do not anticipate adding materially to that run rate” .

Q&A Highlights

  • Revenue drivers: Back-half ramp expected from Factoring, Payments, LoadPay, and Intelligence post-Greenscreens; Q2 likely noisy due to M&A .
  • Payments monetization: Repricing legacy clients, expanding NextGen Audit; ~<$2.4M annualized uplift to date from upgrades/cross-sell; opportunity well <50% captured .
  • FaaS outlook: One client live (CHRW), second in 2H25; broader onboarding expected in 2026; revenue to live in Factoring segment .
  • Credit tone: Improved NPAs/classified assets; provision set for identified issues; cautious on tariffs and macro; equipment finance amortization helps .
  • LoadPay adoption and unit economics: YE target 5k–10k accounts; average interchange trending ~1.76%–1.9% in early data; multiple spend avenues (fuel, repairs) .

Estimates Context

  • EPS missed: Actual $(0.03) vs $0.04* consensus (5 estimates). Non-core items reduced EPS by $0.07, masking underlying KPI strength in Payments . Values retrieved from S&P Global*.
  • Revenue missed: Actual $100.24M* vs $104.54M* consensus (5 estimates). Payments fee revenue grew and float expanded, but Factoring seasonal softness and freight recession weighed on totals . Values retrieved from S&P Global*.
  • Estimate direction: Management’s back-half growth emphasis (Factoring and Payments) and Q2 Greenscreens closing suggest upward revisions to 2H 2025 Payments/Factoring revenues and modest expense stability; near-term EPS may see caution until Intelligence contributes .

Key Takeaways for Investors

  • Back-half weighted revenue story: Expect clearer revenue acceleration in 2H 2025, led by Factoring and Payments, with LoadPay and Intelligence contributing sequentially post-Q2 Greenscreens close .
  • Payments monetization is working: Fee revenue +18.9% y/y, network engagement 50.4%, average float +34% y/y; repricing legacy audit/payment contracts is a tangible lever for margin expansion .
  • Factoring poised for scale: Despite seasonal softness and margin compression, management targets at least doubling segment revenue over time, aided by FaaS and small-carrier instant decision capabilities .
  • Credit trend improving: Reduced NPAs and classified assets; provisions moderating; watch tariff/geopolitical exposure; balance sheet mix (mortgage warehouse deposits) supports funding and cost of funds .
  • Cost discipline: Q2 core opex ~ $99M; absent meaningful revenue growth, opex additions will be limited—supportive for operating leverage once monetization accelerates .
  • Tactical trading: Near-term headline EPS headwinds may persist through Q2 (M&A noise), but KPI strength and Greenscreens closing could catalyze sentiment on Payments/Intelligence monetization into 2H .
  • Medium-term thesis: Unique data moats (settled payment data), neutrality, and AI/ML-driven automation underpin high-margin Intelligence potential (>90% GM) and durable monetization across the core transaction stack .