Triumph Financial (TFIN) 20 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Aaron Graft	Founder, Vice Chairman, and Chief Executive Officer
Melissa Forman	President, TriumphPay
Geoff Brenner	Chief Executive Officer, Triumph Business Capital
Brad Voss	Executive Vice President and Chief Financial Officer
Matt Olney	Stephens, Inc.
Gary Tenner	D.A. Davidson & Co.
Brad Milsaps	Piper Sandler & Co.
Joseph Yanchunis	Raymond James & Associates

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Unidentified Company Representative

Good morning. I'd like to welcome you to Triumph Bancorp's third quarter 2022 earnings conference call. We're so glad you could join us this morning. I'd like to start by thanking all of you for your input following last quarter's call.

As you may remember, last quarter, we moved to this new video format. some for provided medium. around you of fantastic us feedback this Many

this bring I'm Forman, Last our it and Aaron opportunity And on is form Bank. today, of to you this it with CEO; bright step with Todd TBK us this trying is thank this the us. that all us we result, us different took around see, you, Brad lights you something of journey, of Today our we quarterly our of Voss, heart. little go joined As letter tweak forward. world, is joining adventure. of for shareholder we us to this will basis Ritterbusch, as and like today. We call on our pretty your our to this a the around the our gives to all edges shareholders. morning. you can just of so this We're explore by method And something appreciate new partnership. Hopefully our alongside different Graft, Today as President a letter. Capital; CEO our results Geoff and Triumph as communicating quarterly continue continue That morning. another goes Business we're are that Brenner, the live well. benefits to to note, we The it doing On the we'll and Melissa one published evening, CFO; again TriumphPay; President

statements. forward-looking no anticipated that cause statements. uncertainties you results to to that and forward-looking differ. include undertakes could revise obligation get Those may The to risks However, started, subject before publicly any we like conversation and remind to I'd statements actual company are this

to I'd refer Harbor comments our to evening. With a Q&A. Aaron? the and that, off for call shareholder details, to over published during in For the our made statement. subject call that turn statement Aaron Safe All Safe like letter welcome Harbor to kick today's please last to are

Aaron Graft

us. Good Thank you for joining morning.

As quarter contributing factors earnings this you below were saw that. on our expectations. letter, a There our few to were

to began a freight. we see slowdown First, in

Second, revenue last quarter's done be will transaction we couple importantly, and banking and even committed you finance or the general or we volatility headwinds, a that we have long-term freight freight quarters sold being XXXX. volume equipment But in we're profitability that portfolios importantly, of for with invoice in associated turn quarter. X.X%. to factoring revenue have our increased with last and And introduction, despite With about. excited that results to network, from of market on in payments progress that a increased volume our years, to made this it factoring we've lot and reflect over EBITDA if whether it Regardless more network headwinds And specifically, our perspective, our our more goals positive TriumphPay we XX.X%. our segments, and questions. material

Operator

Instructions]. [Operator

from question Matt comes Stephens. Our first Olney from

Matt Olney

flat this pretty But And next curious how I'm the the TPay ramp this prices then going be about out volumes, the The is over quarter. of are to were quarters. control. TPay invoice few you're your part you Aaron, that payment of appreciate those thinking mentioned of volume lower

queue the of adoption. also where appreciate some to the customers TPay of but TPay trying integration, larger Just are in

Aaron Graft

guys or on hear Difficulty] We're you you but Matt, out. question, figure [Technical a really you guys. on it mute. to if me? can not sure Can were it. not mute if great we I had we like hear hear looked I'm could trying you

Matt Olney

about Aaron, on your payment is, volumes. point, question My TPay

some Obviously, that's degree. they invoices I'm up, volume the control to was were of but volume few the TPay you're was of flat the over quarters. number payment how The ramp next mentioned pretty curious thinking flat. about You your quarter. of this out

some larger appreciate in Just of queue the the where customers trying and of are to TPay TPay adoption. integration

Melissa Forman

at lot that. the contributors average of and do spite like thing huge out invoice are we that excited out a about quarter-over-quarter, we're There But is volume have I price. increased of improvement TPay is you're we to control, our are right. that so When look headwinds, one X.X% the volume, point transaction a in want which of

Our increased volume XX%. transaction conforming also over by has

considering brokers for impressive about to right. an coming team in think we're you're When Another point live go the We the one larger QX. by one board, feat don't that have in that's on freight in seeing what has just you been our tier market. sights or our

lined So, to now, it's is peak up are our They to it the happen, in comes pipeline longer those that larger Right expect And get process. we for robust customers. they brokers. very to but these onboarded. take freight when all integration wouldn't season

and And brokers smaller them play holidays. we're the focused they're as the in adding So meantime, for getting on the getting well. network in through the

first we at So The are all XX in about to net But to board. tier on integrations bringing of we pipeline. point, We're them brokers. year. see going what is Matt, freight team your excited quarter last more added half ones our be new quite next of busy

Aaron Graft

a number called think it and just this which when Matt, and volume, I that's like not what saw early as added market know enough And a network any which transactions. is Schneider them Yeah, $XX for approximate timing a revenue a be $XX capability, we're out, with already would, $XX the the perspective, this client in specifically, not said, and Melissa have pay to revenue quote come that. right. going of to We some into making bulk go thoughts and you're that of that freight the on from number, I for billion expect quarter, a fourth brokers about we we out as number. But volume year billion most express season, a But them called quarter we're freezes that's first TriumphPay that. do an ready investor thinking that in next the you that an number process was result to to model but the just busy number, of moves, the does exactly we is The Ideally, specific, not it, as be because, half in in allowed around would move. to do. as projection we exceptionally we that we and payments. to as Schneider of count freight of billion. able audit to

We're in in than the entirely these we've in because for not frankly, market headwinds can expect the the freight pipeline. to discuss smaller did I when we proposition we conversations on bulk and it's have of tell said And to can of career. you timing but And that in seen whole there in volume my it go what for us excited the of how brokers just about different year. TriumphPay an the tightest of And created are loads I that can't that So exact are I these opening. I in back lot cover first freight come opening way before an a beyond very longer-term the happening. value half will I the to happen, say next about

been Now, right played which story. people do I how into are get the worried about more has TriumphPay efficient,

So that's hope helpful. I

Matt Olney

the conforming mentioned you in think I follow-up, quarter. the highlights transactions, was a of one As

billion will at think another $XX remind level ultimately you get was that and transactions it once achieve the think volume, percent path those there? to what's be you said that of think us I But can what way, XX%. of of where go do conforming the you conforming? Or payment

Melissa Forman

There's those are That's data can there. you the enabled, in access of volume factors receiving payments of with deeper payments are huge those look over network, is And we that of And to conforming a freight which that be goal as our into means all transactions of go freight our integrations network. to our to do lot brokers. get on have payment feat. play brokered we a our provide integrate, look XX% at the conforming, the we're payee today, the when end at

Our be at business. create efficient of able provide with factoring XX% to be allow that their working create the and conforming development, as where provide. least that's we can more carriers done. changes organizations the innovate we expect to of the do value transition be and that conforming Where to now to for delivering get to process that Capital, about team through and when ways talking hard see receive day point network happen meaningful they changes going payment within and companies can really from them we're that to biggest going we their it is processes TriumphPay about receive that that And they think We're and moves and make real day what can process network transactions, XX%, real those Triumph allows X% to volume to transactions. is we when the and that will needle again, Business that them and that's to to

Aaron Graft

happen probably would are you Exactly. got the network what thing payments just And going just payment the not. outside but that, candidate primary companies. transaction. of XX% think to for to the right, that And look That's you is and it's sit volume, but of I a exactly could model if were those at It it, likely of is say first factoring billion Melissa candidate. $XX as about I of a

we both you of And So, us the now, XX for a one the it's to wonderful factoring we that's network profitable Capital all community ever in And in XX% But Capital, exercise given their them. is what transactions. their you pay transaction, model six payments. to proxy other transactions Melissa and among once one different XX%, as the and payments, about made the through of about think Business payments, volume and the of the of more market the words, enterprise exactly payor in total gets payments of than right. X%, company like the we Business start and to think be just Triumph done. TriumphPay. carriers every information Melissa can payment modeling If we accept companies they to echo of XX% believe, shouldn't six then Right to of information, what's it said, from and about or coming cost has comes or the that exactly from just models Like, a you miss and of think a very conforming, way or their of more those audit the primary out was factoring said. this, if rate rest factoring Triumph conforming industry. would she out anyone where then way the bear it for that factoring active accept network X going any reorganize that has if payments, who's entirely can a internally, to an resources roughly of that staffing out perspective company remittance And adoption

about that's So think we it. how

the It's make some monetize You you of start We that network transactions it transactions. part work transactions, assumptions at away monetize to lose fact most And network about just that the made companies. the deliver from billion, payments then don't the down which include factored process. sight of $XX value the we payees, factoring every you of penetration. dimensions the and still to market

the are those for so, And to us. profitable be most going

Melissa Forman

throughout on take it that, times. transactions, the TriumphPay. to Aaron, recruiting can think that's itself. so about for network participants to when the monetize each the the you transaction, add it and multiple the And we participant effect continues And in just network build value and of that monetization same to invoice to that,

So it's exciting.

Operator

Gary from Davidson. comes question Tenner from next Our D.A.

Gary Tenner

I Obviously, your CEO I mile. for your kind a the of invoice wanted kind in think ask of to spot about breakeven rate, letter you prices. had where $X.XX expectations are

a average point, really more where little rate bit do a a pressure if already we've meaningful think and lower has? effect have spot dramatic compounding line at fallen invoice rates of prices, volumes size invoice are prices, top it's you there's Given where but revenue. and invoice of pressure this on little lower Obviously, a seen not to of level

Aaron Graft

you Geoff, that? why take don't

Geoff Brenner

We project It's to sizes. say to invoice going with what's impossible going a continue to happen be certainty to slow it's decline. very with average

daily that combat gradual has in we're very small what we've a basis. So we you think to can't have seen. to that, the grow balloon it, is of that, a very that's One a on sector invoices that absolutely buying a you just fleet hole leak. the and of because And we're thing our maximize in presence doing number large if control

If versus now, year end growth XX% invoices. we right were you where a we ago, it's number in our of look at year-over-year where numbers, QX the actually a are comparing year-to-date, of at

So invoices that winning, that's that of a whatever average we're size number good and indicator is. growing we're that the invoice

For up us, of can invoices control. have against is possible the That's goal the that. most line the number to we part bouncing

Aaron Graft

Gary, I struggle conditions rate spot the $X,XXX the a not money. to are or how in market reason the invoices. haul pile $X,XXX given we've gets, at at million said because we invoice what matter people called freight exactly. for this to you on Yeah, market And your to a No they're letter, which see every how going $XXX to in $XX revenue. will return losing But Geoff is is in $X,XXX, prices think question saw in the out. I and what move current move market soft to

an you're it $X,XXX number. be just around not But might prediction. this think I it. to be slightly I that under it, So is think anchor It economic over going could

aggregated do. being sort to of things they're are we hauls, and we clients going a work larger the team even, is And those that of fleet. so a without have an they signing everything another to they're – parking that there of around their were on XX,XXX. that struggle hauls, done and we some for invoices in they're see finding again, means are industry, to these truck, shorter what great and invoice, Geoff the out And or we've longer break can't this over clients One X,XXX and but year of onboarded $X,XXX job, on work

I could see trucker struggle to we hit think be we could can say how any breakeven. – EBITDA

the of truckers is, of So point market continue that's accept to our where where of kind best freight. estimate pressure spot will

Geoff Brenner

it's data could point. if add on, just an Gary, I interesting

we we in at in our in purchased would look if size quarter have purchased company average QX, it QX, best the had the history. invoice that number had If and invoices the QX average with you we between invoice interplay of size the been volume in

control, We with what the and see So have the things growing. on we're we can to happens forward pressing wait just and market.

Gary Tenner

a call the But it, call guess, had to last, follow-up months, I a bit is, windfall. that. of, the XX it, of benefit This a you've

I that's a think in it, as, TriumphPay. the your kind of basis, Business golden shielded, cost on letter. you And Triumph it Capital investing put call consolidated goose in of

some Given and in time over you further kind et think pretax profitability where you're how of invoice do continues the a about revenue prices, decline, invest to consolidated maybe the of decline kind to operate cetera, at company at TriumphPay of this continuing loss? period

Aaron Graft

have a this. of thoughts lot I about

try consolidate I Gary, them. will to, So

First over our to quarter, three book of of all, talk times. half we turned loan time the next you will have by

Business just you the every So constructed we're if different. way Triumph turns Because about days. think Capital, XX is it

then don't you're be volatility. are. movers that's take I a it's that than know, look true, you're airport And and I how about So with in we think XX of you it it's if quarter, especially those risk, we characterize on first it could risk, live characterize it us. we how the when treadmill how you're we last and you walking faster And months credit the pushing may revenue we actually like before to today don't against talked possible and forward, interest I one be makes is people the and is try XXXX, And not take rate it's running in but would neutral. you would

headwinds. true so Okay,

right? and mean mean? for The and Bank were us. profitable, over that the What is in assuming profitable, does because the would Community enterprise us Capital thing our have TriumphPay running be constructed against business So Well, TriumphPay the or first Triumph whether X.X%, ROA for what breakeven, we is itself? been have investment Business it for tailwinds be is treadmill and does headwinds, to the that's or whether

get more ago in and than year XX%. two between can Between was this this next The will TriumphPay it's second expense growth the we is unless year, wins thing less to years even year-over-year. we And it year, far XXX% this, imagine. XX%, and than be remember year last

expectations. years volume was run two spent it with associated to growth and building if in growth of has that million that from will expense a going sitting beyond foundation now, to about we've So investment. we're you XX%, be But because that telling $XXX then to required go our play. here we're we're life year is be very expense TriumphPay And the variable this date excited

so, to not what And we're going we're doing. shortchange

think We I the where to are different. at those we goals know, we time goals, will today hit valuation we be committed I that because and where to knows, and XXXX sit know, materially investor those every if XXXX from you is

the the done. is now we tailwinds As you foundation. were building we said, benefits had That of while

We on are excess sitting capital.

robust We pipeline. have a

senior talent have added the of We most leadership. the we need,

You've seen the announcements.

TriumphPay just So in if because XXXX, this already of need investments. the because short-term a we've manage less in feel we it's certain enterprise grow level expenses not the made to it's overall profitability, to we

So we firm at works it years, not story. go end. We're equity know be and we That's can, backed profitable. for a the three not have hope private our that disappear out do to then something and

and deliver have technology it we here between to hesitate in be here and there. But best be and invest we will will promise. the profitable We the to takes there. profitable talent to on And not be between to opportunistic and

that as we about expense And and which quality. profitable that's the for as noise the in growth some guide about will short enterprise. long gives moderate we maintain for TriumphPay will think view how we term entire credit rails happen. think we're we happens expense kind you growth whatever So how in it. That of as And obviously

we to because then you those, everyone We we goals wins. our if what told committed are hit are

Operator

Milsaps from question Brad And comes Piper our Sandler. from next

Brad Milsaps

Just the you up wanted point to made, TPay. Aaron, follow last regarding on

be I of that a ratio think at $XXX mentioned business. of expenses. million in that, might you're as at XX% But in annualized at one million you you today, efficiency about point, like, looks $XX revenue, at it running

said expect You just growth XX% there.

out. imply you Or $XX that going that million. too at that fall thinking there? of kind low sort would these of closer net to put have $XXX So of XX-ish maybe of Am income. I would I you million revenue, – am expenses about – million business of to Some maybe

when less initially clear trying really contribution I but, little a up can think maybe Just than you bit. level thought, hopefully, kind bit the about a to was that get me you for that to of little

Geoff Brenner

What we're with revenue, to key XXXX EBITDA as metrics. positive. you TriumphPay exiting do three one, two, is mentioned. $XXX million aiming Number Number of

some provides So that that when be for think then, volume to rather takes on at at guardrails. in be be scale. XX%. that It's have another add that get But number $XX we we number between a about we three, And want some payment expense to at to positive a contributor are But order earnings. billion we're to That's that there. drag that going to than level our it discipline going not load to and EBITDA day bigger now point. force margins in the the

Aaron Graft

talk long on will as this things A business. we That's add gross think payment TriumphPay this bank we we investors is operate margins. and efficiency a think over about a think payments and gross to about should investors talking our margin, is network couple at target. it term than about fintech And business about a to SaaS which XX% ratios, and different of investors Brad, targets, or is that, how

if that $XXX to million that's be, and unit to invoice. us in is and of going be back if one. $XX just what you the revenue $XXX Number take $X.XX billion assume that's per if you're in to true, it'll number and two, million none size $X,XXX do generate $XX of And invoices. that's step So know payments invoice you economics, to assume average you just but get million, revenue and you you assume

the revenue greater more with per revenue far if will look is the value cohort, be longer see conviction customer, is a at invoice, that. proposition proposition born. value per that you you And as the firm stay Our the can we than the continues, that that,

do one, think it take revenue plausible million same in the about and other so, subsequent Do some year? And to we deliver that volume, I generates are things in X.Xx? in back even and do. of year our Yes. could and billion see at value it's talked visibility we payors volume because that That revenue? generate $XXX payments $XX our propositions to I I mitigation haven't that payees. fraud we that carrier

can short as market, EBITDA the this at and positive not goal. XX% in answer it goes the the that's to at a That's we longer not will interim of a term, make to grid is, profit terminal required goal over I'm valuation we ratio. this achieve this do delivering said, do can every decision deserves, promise we margins we the the be efficiency the through exiting So scale And the and we brand being of, will think XXXX, an but get we that. and convinced absolutely

Melissa Forman

to their that carriers And something doing we that to bad transactions, daily do participants Aaron, ability we the if possibilities we're go much the about the mitigation, we are the information build view they're add that continue you knew we core clear network, going to share could activity look payments to is and truth they're and all is our I There opportunities industry have be that, and tougher And had on to just on we Very learning to create knew we to what able like started just transaction. fraudulent times with carriers when customers in get the going wrong. we we as limitless. see was with us or have our what deliver spoke to transparency behavior that in transaction source transportation, the and to fraud that so But direction, for have today. grow. what what of in about the it. can the activity, be

can Can us And information? and value else additional this and to help you asked mitigate figuring exciting. us these risks show here? how what day, Can we're fraud the So we them And help existing taking do? and can the the getting help Can transactions? bring there? you we're clients that you us associated so, you it's table with every out to our

Aaron Graft

Exactly.

Brad Milsaps

you letter Aaron, your underwriting equipment about suites. are how talking you spent some guys time in

problems that where You you're having small to truckers you from to your are deal add running spend their won't space with prices. at mentioned down. carriers you equipment that some curious we sort you that worried issues, I – of did Are color? trucks credit because choosing maybe could park time little Just about approaching a about but you guys Can more be maybe some say far Are invoice talking in maybe certain upside letter? how that? are into

Geoff Brenner

the at we to letter, the always risk we the risk mitigation It continued some prices talked haven't about up, or taking. gone that, a equipment extent mitigation is have efforts finance equipment In important lot talk XXX%. we to we're recognize about to as

So support down the which that we're decline. equipment requiring some event us payments in now, gives prices

relationships that equipment, We a of benefit deep serve. long the also of with and visibility lot having financials themselves, the the into we finance have borrowers

looking cycle. reality economics much we businesses a those And be to is whole. able the at the And that withstand as so, really will players the industry of better end than feel the of the those comfortable we day, the that see

do we we're stand feel where headed. So, where comfortable about we and

Brad Milsaps

your capital you appetite the where M&A the you above $XXX you letter, share be that share with of Can be possibility the highlighting aggressive for a stock you about your more guys talk with also you is me Maybe highlight might that is will have you internal those million out buybacks. for your with boldly it pointed kind the targets is, buyback? one very or of opinion, where and final maybe Aaron,

Aaron Graft

able have we a two we a are this we And about to over the because internally. acquisition, And Yeah. there talk uses the possible last in our our be highlighted been intentional But lot if that capital. years without train purpose I stewarding for capital investors. we steward it And you for order something it's hub to capital. think diluting do three about remember

So, mutually invest audit sit expand two is we we twice the the resiliency that exclusive. not includes would Perhaps are now There value will that freight of that about to and capital. pay today, into we brings by we one and network. side. be And and which really reach have where side do in they're will specifically payments them Number and amount carriers of the we in, the And network. more think investing space, opportunities thinking creating our redundancy shipper options.

continue for market is And what's in because now. the space about to money the good revenue in those is opportunities. at worth And so, we happened news a ago look companies multiples did look that year they actually don't something like

analysis for TriumphPay the shares is, that's pretty this at before, a us. ability second our of The to market we've simple and buyback said value own if the values zero, intrinsic the

that now, those we And us of possibly and advantage at of both timing those end alone about lot people a community And who There TriumphPay really XXXX can has have profitable X% to whole to that is target not a quality right now. deposit than greater have good our believe fronts this exact how value when where we've of between invested enterprise one mention, because talked of and that what. now very But bank we market you real cap is very entire at and will a scale. X% of generate can't do other are see headwinds, we of is ROAs I tell you the actionable. interesting that, company and the what's aren't for both firmly the So, taking or to and notwithstanding that year pretax we on and activity just going the in that. headwinds, very factoring

in you us a And get or you none would advantage do now? expectations. enjoy doing us of say and person, proposition talking in you in revenue Like, to But you is can when we volatility, if of To think value all the market believe right do the and long-term absolutely. fun. say, take were what to so, you all it's room we miss a coming not here

to front opportunity And take that as so, an way I shareholders. of value for And I right our create opportunities will given deploy think think you'll a are there's now, steps, us to in us see long-term us. in capital

Operator

Our back go to from next question, we'll Matt Stephens. Olney

Matt Olney

syndication TPay, evolving is you call kind On in fees. of disclosed And various you hope that's factor framework fees, that ramping now network fees that of one set those that any thinking to for a about And or I'm updated subscription mentioned years It's achieve give compared TPay, on year year something kind this that year an framework more this I you of of us I think curious volumes a that next fees longer ago, does views guess to fees, TPay term good about you today, at not ago, fees. laid from you've to if thoughts fees? the assume two is out Or But framework as a a still think stone. in could now TPay? are you topic. ago,

Melissa Forman

discounts we that are syndication fees, all to the the fees, there. framework The QuickPay subscription fees, plan. true and still laid for And out our is network holding

that that we're And pretty close to when clients how So, at you framework. had look we it bringing is we exactly on board, playing are the using out new it modeled.

that clients, they add As framework. existing that we when services work have different using we're to we offer, with our

be. So of that XXXX, it we planned to as where more revenue had is fruition out. up and exactly lining come it to anticipated see we you'll And

Aaron Graft

for there example, revenue Matt, Yeah, at was a this TriumphPay. like, that's take drop exactly quarter, right.

slowing on but long-term carrier some who quarter. the who for, And that pay business clients pay would necessarily In that our words, day injections are contributing saw extend want Now capital would didn't of talked but they their us – they're valuable that in done their the to carrier till have Brokers overall some we or softened. of service. addition into market because appreciated is, to brokers, factor pay we but sheet to is another about, pay. factor everything days to creditworthy XX, a use that freight service, not day and you need who But for them going balance behalf, other to largest, the XX. market to on collect their of the a contributing in because that of we this

to you a of That's sale, your there deliver along you the a needs the proposition or it's bank be you value monetize so, value ability the the access deliver same journey, and both have the to transaction it. plug into payor ways. to are chain. at will Whether supply solutions ability payee, the the play. invisibly financing a and point transaction to And yourself whomever insert and to goes same on when And

like said. So, we think works it very much we

the what audit, just it you a a an generate invoice just if be, think revenue just invoice of disparity about wide doing If might we're specific we specific might on on and might be the $X.XX, value of sits invoice TriumphPay to the facilitating same however, $XX. the $X.XX, sheet client, $X.XX, on that freight balance that we're a be to $X.XX. on closer QuickPay If our broker invoice,

do. to the of balance maintain to do sheet? is of And need us need people us numbers so, to at Or the you to your to on a do invoice audit? facilitate any have good scale, you know, we what both us median the real, at we to because fixed some sure you're the but wide us Do Do you pay? to do, upon with on need network We're underneath make integrations based there's do certain create need the us what transaction? to need aggregate number, we we balance you're sheet? that need network. sit understand cost to sides those QuickPay down looking to disparity you and And our want you that a Do it distilling

And us them do glad to incremental because substantially. goes so, up more to do, profitability you the we're the things ask

going of for the making a using the know core that have it, it business grow, you is I whom will always payee best like of data to but laid doing that. for we because constituents to probably be transactions what's just do continue need things. network to just core is absolute may visibility network differently, are the our of out know think of the The to payor use Visa we and to we've TriumphPay's you and getting out that. use to industry TriumphPay. it's Not going different for to be there going payor to There be every network because about educated due factoring different it, can, persist try for as need and flow that to we what not going don't hard guesses. on and The of constituents always structured it'll due through transaction So, different as between just continue, the the it's the is

can they there if transaction more depend go, how fact set the to people give them the can think become the supply the longer given the the the opportunities they you, we've the but miss of they're the for I for we tools how guidance how on, on is the payor transaction. themselves, as create they chain what accustomed you on that of don't payment, we value more So side accelerate can can recognize finance payment, same

comes currently what in go, seeing. per up to that individual give an of continues there's are to back continue ether go the we on deliver we revenue we invoice. we'll because this on is overall that what together more All monetize individual invoice, seeing of And But invoice. disclosure we're to can to the the value as ability market you

Matt Olney

And the given But appreciate to on expense model. and for in it going TPay, some costs for already there seems of guess or variable I all sales costs commissions. that fixed back puts TPay commentary expense kind through are when there's expense are some for could and the on as us the Appreciate discussion, year. I going the growth like an TPay like takes relief line? as next there sales there's but point, commissions that the assume more through still be some to inflection. feels you there out those the some inflection tier far as ramping it sales be Any you've could commissions ones, be color at bring

Melissa Forman

sales way are we the structured that. have we commissions front-loading is our Matt,

see months in first of life XX we of bring the XX hit you'll account, the expense as the on tier that that lines So, away. commission to Xs, and then goes it

accounts as reoccurring expenses will the but it see start so, Xs, you'll new every commissions as see fall off the keep broker tier on meaningful to Xs, to happen, and we any that existing clients, network, for won't And to effect. those is tier you bringing

Aaron Graft

Melissa is exactly Matt. right,

some won't two think But thereafter, at XX% in of be year about two who in of or think, it At we I point, point, freight. it dimensions. QX will some control XXXX. all the brokers have touched

Okay, can top know X,XXX, know control there's of dinner them. of them that XX%. tail the And X,XXX of name. but our a XX% for bought probably freight freight, We've brokers who long you all X,XXX of all control most

Right? in Where And the shipper network, is of in so, you the day not commission growth is years in our I majority future. four see XX beyond years coming that out that that future. the It's touched when you've three, the and hope market. in it's that

use We network, shipper We carriers. have to $XXX ancillary other Fortune XXX not the payments to us their companies side pay believe but that who it. billion market the is that just of

from – drives we then penetration. so, shipper market And just we community, that community, the brokerage network if see largely because commissions shift the win

I'm sticky we you they're have the a date, happy the it with see on you tied to we're explain of who in those go when of probably to I more have you have our But up. is little. Look, spend to So to coughed this the you've are now it commission to these you, it and we much we'll here, go half got to to because the end because, going dollars that a and to to brokers. have customer commissions and winning, first longer we to haven't invest lost get we're Had customer. and we're This incredibly invest you year, in seeing a celebrating an next you're would how to started known And were live I best proposition is going there. do that value create. I'm hey, value get to

Matt Olney

And you loss credit credit in Any far or are as guys quarter. that the potential the weakness? shareholder in like the hyper-focused And credit third the investors letter, are Lastly, us it it from would disclosed portfolio. loss aware, you industry. borrower, the banking the on as color was industry you liquid as credit quality interesting sounds can far as the be us give to as maybe

Brad Voss

That debt half related $X.X cutting million six their their before and borrower to a that guidance CEO. provision had weeks about was firing issued in single

particular that, else XX did The that years portfolio. of as did organization. we it's portfolio a view with portfolio going been to do that on brought at about obligors. were borrower. into in that some other us we nothing a lot off We, three a of pause the a deep it value nefarious It's that that situation. liquid us, for gives the this And credit really team us four-person a across that like of and for pretty institutional guard. of million one. manages a They there issues as $XXX with So, things may ton lenders We that exposure dive in about caught different team there's have us rest result has one-off that's and

that in loans of millions If to to (sic) dollars were accrued pretty that shareholders for just of in value period, been our that us. we've And hundreds able leverage of you sale XXXX spring at [XXXX], prices early we the fire team what very the happy of and to COVID team during recall, invest has with securities quickly. done

the to that like the business. nature can We flexibility in we that and continue opportunistic deploy

any a to question concerns no, like we So really succinctly, answer an it see don't isolated were We that. result credit of your event. do that was feel broader

Aaron Graft

that's got book. world a we event. their we this, go bad be Look, two to at this this that instance, risk. Brad to out we've if the is underwritten whose is able intentional your by you do. the banks sure to in very largest we're was in lend. because see what universe debt an not we coverage Look, that's portfolio whole going banks entire in be This in It's issue loan $X.X Matt, because on one-off There's exactly said. the In portfolio, last and I'm the systemic, to litigation have see over not of isolated at or convince some of underwriters is to we very one there what going look were opportunities you. days, against don't management how the be undue team shrunk I to portfolio Like, to our of this. loan not XX few and because there's we few event. a behalf. And for taking loan investors being billion years. institutions that things don't know large a the surprise has that lending not But

knew the facts. we can so, we And be where the This X% is can we intentional time. of the thought be and all XX% we right

move of other We did We We'll it. lot us. people smarter didn't. than on. a get So

Geoff Brenner

well. here. a I'd forward that's just way reserve company lot from a behind to that's took thinking there's yet to as we necessarily And here. the But add. like a we take come of loss Yes, long There's on deal that lot a of this we're a this. would strength information in

not a situation. And the is that of for a conservative through the This So is anomaly. is definitely think this purpose I reserve work an This now. we'll loss. right being

Operator

over line for on this to time. no this at the further move Q&A. There line phone We'll further are questions now

Operator

Instructions]. [Operator

from First question Yanchunis Raymond James. Joe with

Joseph Yanchunis

now of of to a fully you capabilities, with in contribution large of audit integrated them have how Schneider conforming boosting the expect level With number transactions?

Melissa Forman

divisions. multiple organization very is large with Schneider a

the has the And we what is their that begin portion one And to want logistics very where happen payments of added about throughout sure to in enterprise. we that see start implementation been in that for Schneider one we're clear so, network do, and I we that make grow section division. to that every

you'll to you divisions, we features add of that continue volume, conforming XXX% be their in of it start of gate. to rest grow. terms of functionality that and So the the to those as Schneider's see see But out won't total

Joseph Yanchunis

on hoping was it's that it to of quarter. billion volume sounds I last to earlier, clients. from to payment outlined to year take comments like on you get your capacity $XX better annualized going understanding bring onboard Based a TPay's in additional a

you in accelerate by me reach be a and beyond. target Can meaningful you'll order volume would onboarding better to so, in year-end pretty billion ramp to $XX able the imply And help XQ how your XXXX process? XXXX understand

Melissa Forman

ready have of waiting we all to a the would I brokers. say team What is that and onboard

each And the them our tier so, we every come that as into tier pipeline, actively have day. network, brokers two, and onboarding smaller three we're the we'll build

deployed and that is are over will of all of have be billion, the What continuous done. more with that half half, lumpy $X the you're those customers get first working team we those process on Our next see country It's all going It's year. ones we're $X in to all second just saying the come those the year. to tier larger at Xs, a happen matter to once onto tend not once. billion when to throughout onboard at add will onboarding There $X network. billion, they the

is actively team the so, deployed. And

we brokers understand also of to what capacity that to the capacity to mind. in is customers our has more the have to We But the network. be add have kept

fast do So, to only work available they're as so. as we can

our of we deployed all and go. up tier when that for fully our also implementations ensure account all stack Xs our the are busy to team ready to so, time, And large is but

team We have it. available the on jump right to

Geoff Brenner

lot the more a not like seems ability of the conversation it the around handle conversations, our is to in client's Melissa, integration, ours.

Melissa Forman

Yeah, you're absolutely right.

Aaron Graft

a a – see time. done Melissa a job you don't What multi-front this foundation laying such them the at war. of and in has again, great integrate of one the We ramp. expense It's

it's of one are teams has one, engineers then alongside So there multiple client. this systems working and like, this not this the to go, oh, one

multiple live the it's go the there it led same to much time, that Melissa which given why it divisions to live. of week, a of built think get So, Like, may and us linear. multiple work thread in streams multiple Don't go is a X tier so of a as investment had we here. be or happening at ones be, through team

we prepare wave think been All the of that us start to is work crest. So, I we it first when amount work has harvesting in fruit can't some we of tell in you tremendous for half. of the can that and, expect and to really, tell done you a exactly will XXXX

Joseph Yanchunis

the it quarter. to expenses, in declined Kind going expenses that? bit the back drove TPay like What a little of looks

Brad Voss

didn't The there borne about organization we that, this quarter the in by was that primary the drove bank. call but that would were have letter, second out thing the in TPay borne more and that the by million in been appropriately expenses $X.X

So, that we unwound in quarter. the third

that accounts QX. So saw you for that the drop in

Joseph Yanchunis

ability wondering I revenue know just able being decline help purchasing your the I that was discuss you well if rates. and purchase invoices generate to understand million to to might an process in guided spot in invoice potential update more in able in more support you trying to outlook to be on $XXX to to provide previously prices TBC as TBC. offset then I'm XXXX.

Geoff Brenner

material no There's forecast. in change our revenue

we're and track. on unchanged, So that's

our are I of it serve the And of relates number this invoices interesting terms grow. the think all to strategy in but to want where differences we in the segments. was growing letter. you our outlined between those We purchase, in of segments, there

fuel a we just make into finance advantage. when headway pay that. and just very all our is look they We've the I you being wins, going and invoices it's you what's that that explaining, head that number that's at than to their dip, had great per with have if value backing That's integrating they a larger fleet. upstream. and do sense are you're trucks, indicative client in been proposition had competitive total less digitally factors trucks, also saw the $X,XXX prices we average fleets, month we've as that at the And think, invoice that's a off That's bank just going So, backed sized one intuitive platform of but with their fleet of count and at took of a segment. you than a very of going we're how insure different our who larger the a only up. trucks, about look fewer purchased, successful And discussing winning even revenue. how on data, down, generate low. letter, talking can at they few of the X,XXX the clients invoices, factoring, larger And transportation fleets, their is medium have revenue how client They a

that is per that's strategy. XXx client the segment. in larger in And what the segment So the we have revenue small

we'll how game. So, that's That's win. the

Joseph Yanchunis

one all that I guys? jumping targets just discussion, for the sneak more think you guess are Kind here. you of question the M&A Sorry acquisition out many check how back potential for going had around all boxes in. to to there I

Aaron Graft

We're as about There specific the an what that which providers shipper year, of having very a and investor of reasons been doing. them, and laid I've we're market an the area of are five proud interest great Intelligent for is size. I in are Audit, of freight one they're pay out. audit

not that matter. somewhat It's there's So XXX consolidated.

don't we we this because if tech, preload, companies do about as might long in The on do you – and all what have formed invest post that – virtual load in other been our the it's and think and do clients technology places wallets load, to is don't do. for you payments as freight that's all

proof Our take the trailer is view the when delivery when signed, we and dropped is is, of that's over.

working there's carrier it's bank And Well, wallet, and includes audit, does players there out that payment, complement are how so, that on could and spinning virtual does the include? whether then that organically, things accounts, the there a what payment, there's that. we're

if can't think to I opportunity a compete people And end pay to to we we're universe ourselves carriers pick in people We to on as dynamics. being it names. consolidate of huge all deals. stuff ourselves. back that to about and XX at that lot services, think built Business Triumph who that intuitive, zero buy That's network deals. And talking with is something going said, good. provide we're that's build Geoff A want all spots, for incredibly But Capital who should we're not were to we people of it's you There's make you're we on or that But in looked so, have universe, of do market great. not haven't the customer the carrier doing for the set. our and opportunities. rather and than as legacy it, Well, a customer another if working kind might those would of XX not who we to things that experience be go the try change what And take it audit deliver do the the experience the built. you freight whole

our And our our we is less right? it's XXth XX M&A Everybody closet. names. know is than because the So, the are read XX-K. easy pretty in skeletons name stock, Which right? does, discussion a own where Go

And so, that's this in just a the be. shares step valuation a may short of, are who from to people is exercise start just term. buying appropriate back It meaningfully that's time to thinking

Operator

head [Operator no Instructions]. are the lines. questions studio further We the There to back now. on can phone

Aaron Graft

joining and speaking conclude thank a we you Just Have you day. great us, saying to to again all by want soon. forward for to look

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.