Triumph Financial, Inc. Q2 FY2025 earnings call

• Successful resolution of 5-year issue with USPS, recouping owed funds. - Core transportation business had strong revenue growth and improved credit quality. - Greenscreens acquisition integration progressing well, with increased ACV in pipeline and data from Triumph network being ingested. - EBITDA margin expected to continue improving with goal to get above 40% long-term. - Emphasis on value chain in shareholder letter to frame strategy. - Discussion on competition in various segments like audit, payments, intelligence, and factoring, stating that competition is part of capitalism and benefits customers.

The core transportation business had revenue growth. The factoring segment saw average invoice size affected by mix of customers and market pressures. The intelligence segment (including Greenscreens acquisition) has a revenue run rate of about $10 million. Historically, Greenscreens had an ACV of ~$34,000, but pipeline ACV is now ~$80,000. The data from the Triumph network, which has sightline to nearly 70% of all freight transactions, is being ingested to improve lane density coverage and accuracy. Revenue contribution: intelligence as a percentage of transportation businesses is expected to grow the fastest in the next 2-3 years.

• Intelligence segment expected to grow faster than other transportation businesses. - EBITDA margin to continue improving regularly. - Credit losses projected to be at the low end of historical range. - Supply chain financing has potential for significant growth. - Expectation that intelligence will grow more quickly than transportation-related businesses in the next 2-3 years.

• Competition in segments like intelligence, factoring, and payments, which may impact market share. - Market pressures affecting invoice sizes in factoring due to mix of customers. - Operational risks related to fraud and security in handling payments and data, given the volume of transactions and presence of organized crime in the transportation market.

Q: How are initial observations on Greenscreens acquisition?

A: Integration progressing, ACV in pipeline increased to $80,000, data from Triumph network ingestion underway.

Q: Expectations for EBITDA margin moving forward?

A: Expected to continue improving, long-term goal above 40%.

Q: Impact of DAT's acquisition of ALCO payment platform?

A: DAT aiming to grow in factoring space, competition part of capitalism.

Q: Split of USPS fee collection between interest income and fees?

A: All in interest income, factoring fees typically end up in interest income.

Q: Growth in noninterest expense under corporate and other?

A: Predominantly for information security and infrastructure supporting businesses.