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Jun 30, 2023
Triumph Financial Q2 2023 Earnings Report
Net income decreased due to freight recession and rising funding costs, while TriumphPay showed momentum.
Key Takeaways
Triumph Financial reported a net income of $6.8 million, or $0.29 per diluted share, for the second quarter of 2023. The results were impacted by the ongoing freight recession and rising funding costs, but TriumphPay demonstrated significant momentum.
Earnings declined due to the ongoing freight recession and rising funding costs.
Funding costs increased as loan growth was funded with more expensive wholesale funding.
Credit metrics remained solid, and credit costs were in line with expectations.
TriumphPay experienced significant momentum with new logos and improved EBITDA margins.
Triumph Financial
Triumph Financial
Triumph Financial Revenue by Segment
Revenue by Segment
Banking Revenue
CapyFin.comFactoring Revenue
CapyFin.comPayments Revenue
CapyFin.com Forward Guidance
Triumph Financial expects expenses to remain roughly flat for the remainder of 2023, with potential increases of $1-2 million per quarter for resiliency-related projects. The company anticipates that any additional expense growth will be the result of supporting new clients and increased volumes.
Positive Outlook
- Expenses are expected to remain roughly flat for the remainder of 2023.
- Additional expense growth will primarily support new clients and increased volumes.
- The company is focused on helping clients navigate the difficult operating environment.
- TriumphPay is expected to reach EBITDA break-even by the end of 2024, possibly sooner.
- Triumph Financial's credit position is considered solid, and the freight market is expected to trend higher.
Challenges Ahead
- The freight market remains under pressure.
- Resiliency-related projects could add $1-2 million to the quarterly run rate beginning in Q3.
- Revenue volatility impacts the business, preventing earnings guidance.
- Pricing pressures remain and utilization trends are still below long-term averages in Factoring.
- The level of lending opportunities with attractive risk-adjusted returns is less than anticipated at the beginning of the year.