It was hard not to read the quarterly letter to shareholders by Aaron Graft, the CEO of Triumph Financial, and not get a sense that he was taking the first few steps into a victory lap.
Triumph’s message to investors for years has been consistent, and it has been amplified every three months in Graft’s multi-page letter to shareholders, unique among CEOs.
That message has been that Triumph Financial (NYSE: TFIN), while still being a bank at its most basic definition, was building an infrastructure to become the supplier of a vast array of financial support services to the trucking community, all the way down to independent owner operators.
Factoring? Got it, since it’s essentially the original Triumph Financial business. Payments? Ever since Triumph Financial bought HubTran in 2021, it has been building its Payments system to process invoices. Intelligence? It bought Green Sheets last year. How about what amounts to a digital wallet for drivers and small fleets? It launched LoadPay in 2024 for that purpose.
While this was going on, it hasn’t been an easy ride for investors. Triumph Financial stock is down about 43.5% over the last five years.
But the data released in the company’s third quarter earnings report featured numbers that were almost universally positive and suggested those years of investment–which pinched profitability–are starting to pay off.
More importantly are the company’s North Star Metrics, which Triumph Financial set two quarters ago.
Those North Star metrics in the third quarter broke down as follows:
- Transportation Revenue Growth: Long-term target is above 15% growth, third quarter was 37.8%. About a third of it is organic, so it is not just being pushed higher on the back of a stronger freight market and higher diesel prices.
- Factoring operating margin: Long-term target is above 40%, third quarter was 43%.
- Payments EBITDA, exclusive of the LoadPay wallet offering: More than 50%, 39% in the third quarter after being 34% in the second quarter.
- Intelligence Gross Margin: Above 85%, but Graft said in his letter that metric will be dropped from its North Star goals. Intelligence revenue was a mere $2.4 million, down slightly sequentially.
“We told investors we would invest through the freight cycle, and we did exactly that,” Graft wrote in his letter. “Not everyone agreed with the strategy, but we were true to our word.”
Triumph will now look to “translate that potential into earnings performance consistent with our historical results and beyond,” Graft wrote. “Doing so will demonstrate the returns on the investments we have made.”
Triumph Financial’s revenues have been impacted since the start of the Iran war by higher diesel prices. Even if the linehaul portion of a freight invoice stays flat, if the price of diesel rises, that number goes into the invoice it factors or processes (or both), which as Graft conceded in his letter has always led to the question: “How sensitive (is) our average invoice prices…to the cost of diesel?”
Graft’s answer was complicated and simple at the same time: it depends. Factors that would go into answering that question can vary widely among customers, including such things as the carrier’s fuel surcharge formula.
But Graft did seek to answer the question. Year-on-year, he said, dry van revenue is up 40% but diesel costs, as measured at the pump (as opposed to trucker fuel discounts) have risen by 67% during that time. Driver costs have risen, with Graft putting a figure of 70 cents/mile on current levels.
Throw in insurance, interest costs and equipment, and Graft laid out an inflationary landscape.
We don't know what % of invoices processed at $TFIN are #diesel costs, so it's not easy to draw a conclusion from 3Q earnings that avg size of invoices rose 2.3% while diesel costs rose 3.9%. Also: an avg figure for diesel covers up crazy volatility. Low to high was almost $2. pic.twitter.com/8pMFJab4NP
— John Kingston (@JohnHKingston) October 21, 2026
“As a result, the revenue per mile a trucker must generate and thus the average invoice size is almost certainly going to be double-digit percentages above historical norms until market forces change,” he wrote.
But Graft ultimately did provide a benchmark on what the market means for the company. For every $100 upward move in the average invoice price, he wrote, “Triumph should generate roughly $12 million in incremental annual revenue, $8.5 million in pretax earnings and 27 cents in earnings per share,” he said.
But he added: “The inverse is also true when invoice sizes decline.”
While Factoring in recent years might have been considered the less sexy part of the Triumph business, with so much focus on the Payment sector, Graft used the third quarter letter to promote that sector.
He disclosed several pieces of data. Graft said according to Triumph’s data, there are more than 90,000 “factored carriers” in the U.S. Triumph services about 8,000 of them, growing at the rate of 78 net new clients per month.
He also said costs to service an invoice have dropped by about 20% in the last year.
But Graft said Factoring’s importance at Triumph has grown for other reasons besides the bottom line.
Like the quarterly earnings at $CHRW, that of $TFIN has data that shows increased productivity. Triumph's Factoring business is processing more invoices with fewer people, though the declines are not as stark as seen at C.H. Robinson. (Admittedly different businesses). pic.twitter.com/ZYhHd0u4F6
— John Kingston (@JohnHKingston) October 21, 2026
“Factoring remains both an attractive financial business and the principal carrier-acquisition gateway into the Triumph value chain,” Graft wrote. “When we win a factoring relationship, we have an opportunity to serve that carrier through LoadPay, equipment finance, insurance, fuel, and Intelligence. The economic value of Factoring therefore extends beyond the margin earned on an individual receivable. That broader relationship is one reason renewed growth in this business remains a strategic priority.”
Among other data points and observations in Graft’s letter:
- Graft did not mention the decision in Montgomery vs. Caribe Transport II. But it was hard not to think of it when he wrote: “The scarce resource in freight today is not trucks. It is trusted, deployable capacity, because a truck that cannot be verified and deployed with confidence is not defensible, and thus, is not truly usable capacity. Freight is moving from a market defined by abundant capacity to one defined by defensible capacity.”
- EBITDA in the Payments sector had been negative for many quarters. Progress was often measured in just how much negative EBITDA had been reduced, though Payments has been a positive EBITDA margin for more than a year. “The Payments business has graduated from logo acquisition to revenue growth to EBITDA margin expansion and, finally, is becoming a driver of earnings,” Graft said. “As a result, we will provide more commentary on operating income in future letters alongside insights on revenue growth and EBITDA margin. Over the next several quarters, we expect operating income to continue to grow through a balanced combination of organic revenue growth and cost savings with less contribution from repricing.” The Payments EBITDA whether it was 30.8% for the full Payments group or the group’s margin excluding LoadPay of 39%, was the highest in the company’s history.
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