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Triumph Financial reported a fourth quarter with numbers that backed up signs of a strengthening freight market as it added two significant new customers for its Triumph Network payment process.
Between its Factoring segment and its Payments arm, which includes the Triumph Network that audits and pays its brokerage clients and is seen as the long-term core of the company, there were data points in the quarterly report that demonstrated freight market strength.
Triumph Financial (NYSE: TFIN) said the average invoice size processed in its Network rose to $1,215 in the fourth quarter, up from $1,208 in the third quarter and a recent low of $1,186 in the second quarter. The fourth quarter number also topped the fourth quarter 2024 figure of $1,123. Invoice sizes are affected by diesel prices, but they declined over the course of the quarter.
In its Factoring segment, the average invoice size rose to $1,751. While that is still less than a year ago when it was $1,767, it was the second consecutive quarter of a sequential gain. That number was $1,690 in the third quarter and $1,663 in the second quarter.
Graft’s letter also said that year to date in 2026, that invoice size has risen to $1,880, “which is unusual, but not yet based on enough data to call a trend.”
Rising invoice prices do not necessarily translate into greater profitability, but they did at Triumph Financial in the quarter. In the Factoring segment, the operating margin was 32.61%, up from 20.71% in the preceding quarter. It was well below the 48.46% from the second quarter, but more than the 23.67% margin of a year earlier.
Triumph Financial’s earnings, which also are driven by its banking arm, were 77 cents per share on a GAAP basis. According to SeekingAlpha, that beat consensus estimates by 47 cts/share. Revenue of $120 million topped estimates by roughly $9.3 million.
J.B. Hunt on board
The two big name customers that have been added to the Network are BlueGrace and J.B. Hunt (NASDAQ: JBHT). The Blue Grace announcement was in November, with J.B. Hunt signing on late last week.
In the Payments segment, fourth quarter invoice volume topped 9 million. A year ago, it was 6.8 million.
The Payments group at Triumph, which includes the Network but has other activities such as its quick pay offering, posted a positive EBITDA margin of 16.9%, up just 10 basis points from the third quarter. That margin was negative in three of the prior eight quarters, and the 16.9% was the highest ever for the segment.
“While we already serve 67 of the top 100 brokers and hundreds of smaller brokers, we have an opportunity to serve many more,” Graft said in his letter to investors. “To that end, we are investing in a variety of innovative marketing and sales efforts to encourage brokers to join us.”
Cheaper deals sliding off the books
Graft also said as time goes on, the number of customers for the Payments segment who are operating on reduced fees that were deployed to bring them on board is diminishing.
“Our product suite is now far more advanced, and the efficiency of the Network for customers is much greater than in the early days,” Graft said. “We have reached agreements with almost all the customers still operating on introductory pricing from years ago. The fees associated with these agreements will phase in over the next four quarters, which will lead to revenue growth and margin expansion.”
Graft said those customers coming off the lower priced deals will account for about 20% of expected growth in Payments revenue during 2026.
In Graft’s discussion of the freight market, he noted that the rising invoice levels evident in the earnings report are not helping brokers, according to the data provided by Triumph.
Brokers continue to get squeezed
With brokers having contractual business set at levels prior to the end-2025 runup in spot rates, it is creating a squeeze in margins; Graft’s letter is the latest to make that point.
“A notable trend throughout 2025 was the continued erosion of broker gross margins across the network,” the Graft letter said. “After peaking in early 2022, median broker margins gradually compressed over the next several years, with a pronounced step-down in late 2024 and accelerating pressure through 2025. By December 2025, median gross margins had fallen to some of the lowest levels observed in the past five years.”
With C.H. Robinson (NASDAQ: CHRW) having become the poster child for how Artificial Intelligence can be used to boost the bottom line in logistics, Graft’s letter turned to a similar playbook by providing hard data on how it sees AI having improved financial performance at Triumph.
In its Factoring segment, Graft’s letter said about 60% of the invoices submitted to it are “instantly verified and approved by our AI tools, and 20% of them proceed through purchase and funding without a human touching them,” Graft said. That number was flat to the prior quarter.
The average time to approve an invoice using the company’s AI tools is about 12 seconds. The decision to purchase an invoice takes about 23 seconds, Graft said.
That has resulted in reduced headcount, Graft’s letter said. The “instant decision” tool launched in June 2024 has seen invoices purchased rise by 29% but headcount drop by 25%.
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