Sign in
TF

Triumph Financial, Inc. (TFIN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was a mixed print: Payments accelerated and turned positive on pretax operating income, but consolidated revenue missed S&P Global consensus while Primary EPS beat; non-core restructuring costs of $4.4M weighed on GAAP EPS ($0.04 diluted) . S&P Global: Revenue $105.0M vs $111.4M est (miss), Primary EPS $0.22 vs $0.10 est (beat)*.
  • Management guided to noninterest expense of ~$96.5M in Q4 (down ~4.5% vs adjusted Q2 run-rate) and reiterated a 20% annual transportation revenue growth target; a new $30M buyback was authorized .
  • Payments segment revenue grew 7.4% q/q with EBITDA margin expanding to 16.8% and first positive pretax operating income; fee penetration rose (30.8% of payments charged a fee) supporting mix and monetization momentum .
  • Risk update: Tricolor bankruptcy adds noise to credit metrics, but TFIN asserts a perfected first lien and believes it is adequately secured; earlier non-core lending will continue to be wound down as business pivots to transportation .
  • Near-term catalysts: repricing ramps into Q4/Q1, expense reductions flow through, LoadPay scaling, Intelligence product now integrated, and expanding third-party adoption (e.g., NFI) .
    Note: S&P Global estimates and “Primary EPS” below are from S&P Global; definitions may differ from company-reported diluted EPS.*

What Went Well and What Went Wrong

  • What Went Well

    • Payments execution: revenue +7.4% q/q to $18.5M with EBITDA margin up to 16.8% and first-ever positive pretax operating income in the segment .
    • Monetization progress: fee revenue drove ~54% of Payments growth; fee-charged share increased to 30.8% (from 28.5%), supporting sustainable mix uplift .
    • Strategic momentum: LoadPay nearly doubled accounts to 4,421 (added 2,054 in Q3); reaffirmed 5k–10k FY25 account target; Intelligence launched integrated Pricing & Performance product; NFI expanded to Triumph Payments, Audit and Intelligence .
    • Management tone: “We expect our transportation revenue to grow 20% annually” and project Q4 noninterest expense ~$96.5M as efficiency program benefits accrue .

  • What Went Wrong

    • Consolidated top-line vs Street: S&P “Revenue” actual $105.0M missed $111.4M consensus for Q3 (vs Q2 beat), and GAAP diluted EPS fell to $0.04; non-core restructuring ($4.4M) pressured profitability . S&P Global estimates table below.*
    • Operating leverage lag: reported noninterest expense rose to $103.7M (from $100.8M in Q2), though adjusted noninterest expense declined to $99.3M; net interest margin slipped to 6.29% (from 6.43% in Q2; 6.81% in Q3’24) .
    • Credit optics: Non-performing loans/total loans increased 16 bps q/q to 1.36% (Tricolor-related), while past due ratios improved; management expects adequate collateral but timeline uncertain .

Financial Results

Metric ($USD Millions, except per-share)Q3 2024Q2 2025Q3 2025
Net Interest Income$88.699 $88.678 $87.833
Noninterest Income (Total)$17.497 $19.384 $21.448
Noninterest Expense (Total)$95.646 $100.840 $103.714
Net Income$5.347 $4.420 $1.708
Net Income to Common$4.546 $3.618 $0.907
Diluted EPS$0.19 $0.15 $0.04

Segment performance

Segment metrics ($USD Thousands)Q2 2025Q3 2025
Banking – Total interest income$64,851 $64,931
Banking – Noninterest income$7,989 $8,364
Banking – Operating income$26,374 $27,075
Factoring – Total interest income$38,040 $37,157
Factoring – Noninterest income$1,811 $1,585
Factoring – Operating income$19,754 $8,212
Payments – Total interest income$6,230 $6,769
Payments – Noninterest income$7,724 $8,462
Payments – Operating income (loss)$(654) $450
Intelligence – Noninterest income (Revenue)$1,724 $2,338
Intelligence – Operating income (loss)$(5,986) $(3,598)

Payments KPIs

Payments KPIsQ3 2024Q2 2025Q3 2025
Invoices processed (#)6,278,246 8,500,565 8,826,848
Amount of payments processed$7,091,493,000 $10,081,206,000 $10,662,418,000
Fee revenue$6,611 $8,105 $8,791
Total revenue$14,873 $17,231 $18,503
EBITDA Margin0.5% 13.9% 16.8%
Network invoice volume (#)661,628 1,004,603 1,057,606
Network payment volume$1,063,228,000 $1,579,662,000 $1,696,817,000

Factoring KPIs

Factoring KPIsQ3 2024Q2 2025Q3 2025
Accounts receivable purchased$2,610,177,000 $2,873,659,000 $2,997,895,000
Invoices purchased (#)1,480,824 1,697,851 1,735,860
Discount rate1.40% 1.37% 1.29%
Operating margin20.99% 48.46% 20.71%

Estimates vs Actuals (S&P Global; bank “Revenue” reflects net revenue)

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($)104,536,000*105,097,000*111,371,750*
Revenue Actual ($)100,243,000*108,764,000*104,997,000*
Primary EPS Consensus Mean ($)0.042*0.048*0.10*
Primary EPS Actual ($)-0.03*0.15*0.22182*
Company Diluted EPS ($)-0.03 0.15 0.04
Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Noninterest expense (reported)Q4 2025n/a~$96.5MNew; implies lower vs adj. Q2 run-rate ($101.1M)
Transportation revenue growthMulti-year20% annually (prior call)Reiterated 20% annuallyMaintained
Payments revenue driversQ4 2025–Q1 2026n/aRepricing to drive more growth in Q4; accelerate in Q1 2026New qualitative guidance
Share repurchaseNext 12 monthsn/aUp to $30M authorizationNew
LoadPay accountsFY 20255k–10kReaffirmedMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
AI/automation & efficiencyEarly investments; integration of acquisitions; USPS/non-core items impacted optics in Q2 Automated cash posting (~20% treasury efficiency); automated bill reminders (10x touch); instant decision model 58% O/O pass rate; further 2026 efficiency planned Improving operating efficiency
Pricing/repricing & fee penetrationBuilding value before monetization; payments fee base growing Fees drove ~54% of Payments growth; fee-charged share 30.8%; repricing to standard rates with no attrition Monetization accelerating
LoadPay roadmapRapid early adoption4,421 accounts; “Venmo→Banking→Business companion” roadmap through 2026; per-account revenue potential rising with card and embedded intelligence Scaling use-cases and ARPU
Intelligence offeringIntegration in progress post-acquisitionsFully integrated Pricing & Performance launched; ACV ~$43k; ~89% gross margin; shipper pilot targeted 10–15 shippers/$500M freight under mgmt Product-market expansion
Macro/regulatory (FMCSA IFR)Freight overcapacity; USPS settlement effectsPotential enforcement on non-domiciled CDLs could lift rates; greatest impact expected in for-hire market Possible 2026 tailwind
Credit/Tricolorn/a$22.5M exposure in $60M facility; perfected first lien; liquidation process could start on portions within weeks; not core to strategy Elevated headline risk, contained collateral stance

Management Commentary

  • “Payments revenue grew 7.4% q/o/q; EBITDA margin improved to 16.8%, and we generated positive pretax operating income in the segment for the first time… I stand by my statement… we expect our transportation revenue to grow 20% annually.”
  • “We project 4Q expenses to be $96.5 million… 90% of [savings] are in our run rate as we begin 4Q.”
  • On market-agnostic plan: “Irrespective of what the freight market does, we expect revenue to go up and expenses to be flat at this time next year.”
  • On Payments monetization: “If you were to just look at payments… the EBITDA margin… would be almost 30% because LoadPay is a startup piece of our payments business.”
  • On capital: “Our board authorized a $30 million share repurchase program.”

Q&A Highlights

  • Intelligence timing and 2026: fully integrated product is live; expect 2026 ramp leveraging Payments network relationships .
  • Payments partnerships ramp: volume onboarded for key partners; revenue ramps as pricing phases in; management won’t discuss specific contract rates .
  • Growth bridge to 20%: factoring growth focus resumes; Payments infill pricing + pipeline; LoadPay ARPU can exceed $0.75 per invoice-equivalent as card/embedded intelligence usage scales; Intelligence to accelerate in 2026 .
  • Tricolor update: perfected first lien; portions of collateral may liquidate soon, with broader process governed by the court; expect material clarity within weeks .
  • Expense path: targeting ~$96.5M Q4 and flat y/y 2026; efficiency vs cost-cutting—continued tech investment to drive operating leverage .

Estimates Context

  • Q3 2025 vs S&P Global: Revenue $104.997M vs $111.372M est (miss); Primary EPS $0.22182 vs $0.10 est (beat). Company-reported diluted EPS was $0.04 due to non-core costs; differences reflect S&P’s “Primary EPS” methodology vs GAAP diluted EPS . Values retrieved from S&P Global.*
  • Intra-year pattern: Q1 missed on both revenue and EPS; Q2 beat on both; Q3 revenue miss but Primary EPS beat, suggesting cost control and mix offsetting top-line shortfall.*

Key Takeaways for Investors

  • Payments flywheel is turning: higher fee penetration, rising EBITDA margins, first positive pretax income; repricing should further lift revenue into Q4/Q1 .
  • Operating discipline: expense reductions are tangible (Q4 guide ~$96.5M) with more efficiency actions expected in 2026; NIM softness and opex remain watch items .
  • Adjacent growth vectors: LoadPay scaling and broadening functionality should raise ARPU; integrated Intelligence product offers 2026 monetization optionality .
  • Credit headline risk manageable: Tricolor adds noise but collateral stance is constructive; non-core lending retrenchment continues .
  • Capital deployment: $30M buyback provides downside support; execution on growth/efficiency is the catalyst for multiple expansion .
  • Trading setup: Mixed quarter (rev miss/Primary EPS beat) with clear near-term catalysts (repricing, opex delivery, LoadPay/Intelligence ramps); monitor Q4 opex realization and Payments fee mix trajectory .