Conference. My name is Tim Switzer, and I am an equity research analyst here at KBW. I am pleased to be up here with Aaron Graft, CEO and President of Triumph Financial. Aaron, thank you for being here today.
Thank you for having me.
One of the notable trends in fintech has been companies going to pursue their own bank charter, and I thought this would be a good place to start our discussion today, because Triumph essentially did this in reverse. You started the traditional community bank, and then you built a fintech based on a niche customer base. Can you tell us a little bit about that journey and the challenges you faced? I am sure some parts of that transformation process are easier when you already have a strong bank in place. I can see where it also might create some issues in even areas like finding talent.
Sure. I think probably the reason we did it is because I am the most accidental banker in the history of banking, right? I started Triumph with me and a laptop with no aspiration of being a bank, no aspiration of being involved in transportation or payments. We were buying distressed commercial real estate debt. September 2008 happens, which, when I share that story, I realize every year fewer and fewer people really appreciate what it was like the day Lehman failed. The world stopped spinning, and I was 30 years old, and I went to my mentors and said, "Let us do the riskiest thing possible," which at that time felt like buying a distressed bank. That is how we got into banking as a deal. I do not think I ever came into it with the expectation that this is how a bank should run.
I learned banking, but I never saw that dichotomy between, well, banks can't do this because banks don't do this. I think you can begin as a fintech and become a bank, and there's going to be cultural issues along the way. I think you can begin as a bank and move into fintech, there's going to be cultural issues. But if you begin as a banker, like a true grew up my whole career as a banker, moving into fintech's going to probably be exceedingly difficult.
Yeah, it's interesting. One of the difficulties for a fintech getting a charter is cultivating that banker mindset when I think typically the culture is more move fast and break things. Was that a challenge for you as you went the other way building out TriumphPay, and how do you find the right balance between the risk management required of a bank with the culture of innovation necessary? It seems like you kind of had that yourself inherently, but what was-
Yeah, I think I was Banks are generally where entrepreneurialism goes to die, right? We just didn't let it die. For 15 years now, or I guess 16 years, we've been a bank. I think that's my job. There's a lot of things I don't do for our company, but one of the things I do do for our company is have one foot in the world of being able to speak bank, talk to regulators, talk to the buy side, talk to financial investors, and use the language that they understand. Meanwhile, to be able to talk to our technology organization, talk to truckers, talk payments and financial technology.
I think I'm sure there's different ways to get there than what we did, but that, I think, is one of the most important roles I fulfill, is making sure that we don't let entrepreneurialism die, but also that we don't become so entrepreneurial that we forget that banks have certain things they have to do on quarterly and annual bases, because you are a steward of people's financial savings. I just think you just have to hold those things in equal tension, is as good a formula as I can give you to make it work.
Yeah. Since you've built out TriumphPay, your payments network has gone from basically nothing to now touching about 65% of the $145 billion brokered freight market. How did you scale it so quickly, and can you talk about why Triumph specifically was in such a unique place to do that?
Yeah. Let me answer the second question first. I think there are people who could have done this. If you were going to do it, if you were going to create a network in trucking, transportation payments, the most logical place to sit is whether you were either close to the payor or close to the payee. The payor would be the broker or the person hiring the truck, and the payee would be the truck. There were people who probably could have done it. I just don't think they had the vision for it, just because how they were running their business. The reason we were able to scale is because we intricately understood the friction that exists in paying a $2,000 invoice.
If you're not in trucking, you have no concept of why and how it could be possible that you could have that much friction around a $2,000 invoice. We knew that because we bought lots of those invoices on behalf of our customers. We've never been afraid to ask the question, "Well, what if we reinvented this? What if there was a way in which the data could move more efficiently so the money could move more efficiently so that we could make the whole system more efficient?" That was the question that we asked in 2017. We really started to figure out in 2020. Yeah, I mean, it has scaled pretty dramatically since then.
Yeah, interesting. Now that you've achieved strong density in the network, can you talk about your approach to converting that 65% of the market into revenue for Triumph, and what's been the customer response to some recent monetization efforts you guys have made this year?
Yeah. I mean, we've grown revenue in our payments segment on a compounded annual growth rate over the last three years of 25%, I think, 30%. I don't remember exactly. We, of course, like many fintechs, like many new businesses, we had to start off with a bit of a freemium model where you do things for people and you don't charge them as it's one thing to show people the technology. It's another thing to get them to go through the exercise of change management, which is what's required to revamp a payments system, so you got to give them time to do that. We haven't, I mean, you see our numbers. As we've grown revenue and grown margin, we haven't lost hardly any customers. That speaks to the value proposition. But the second thing you touched on, I think is really important.
You said 65% density, and density is certainly what we were talking about three years ago, but that does not mean, and it's very important people understand this, that 65% of the financial opportunity is already in our run rate or behind us. I mean, when Amazon figured out how to sell everybody books, they didn't just stop there, right? They started selling other products that customers wanted. Well, it's the same thing of what we're doing in our payments network. When I say 65%, that means we touch the invoice either through audit or payment, but we may not touch it for both. There are other things we can do, supply chain, finance, intelligence, et cetera, that tie to that transaction. So 65% is important from a density perspective.
It's how broad our reach is in the market, but it doesn't speak to how deep our reach is yet on the ability to create value for customer and therefore earnings for us.
Okay. On that, like, as you guys have transformed to this payments and fintech business, the metrics investors have tracked over time have changed quite a bit, and your business today even looks pretty different than it was like a year or two ago. You've started disclosing new metrics as a result. Can you maybe talk about what are the important KPIs we should be watching for Triumph going forward, and how should we be watching those to track that Triumph is on-
Sure.
On pace for its growth plans?
I mean, the reason we did it is we are a complicated story. It's not complicated to those of us who live in it every day, but to the investors who are watching this on the webcast or here, like, I get it. You cover 200 other companies, and it's hard to get the Triumph story in an elevator ride. I mean, you cover us, you know. I just want investors to understand these are the things I wake up every day and think about. If you agree with those things, great. If you don't agree with those things, don't buy our stock. I mean, the first and foremost is just transportation revenue growth. Our future is firmly affixed to our ability to grow transportation revenue growth.
You're not going to own our name and find out we're in some other industry or that we come back and, "Oh, we want to scale the community bank," right? Community bank is where it is. Its job is to be efficient. Our future is in transportation revenue growth. As you know, revenue growth doesn't always turn into earnings. The second way we try to look at that is, okay, in our businesses that we are scaling inside of transportation, how are we doing making sure we're achieving margins that mean we're going to translate earnings into bottom line? So factoring operating margin, we talk about a 40% net operating margin. There are hardly any commercial finance businesses in the world that can generate that sort of net operating margin at the scale we do.
In our payments business, we talk about EBITDA margin because that is more of a service business. I mean, I bet there's probably not another bank in your coverage universe that uses the term EBITDA, right? That's not how banks think, but it's how fintech investors think and what they understand. Then, we think about gross margin and intelligence, although frankly, I don't think that's a North Star for us anymore as much as revenue growth in that business. It's more of a SaaS business. Then you wrap that all together with total expense management. If you do all those things, then we get into talking about ROA, which fintech investors are like, "What in the world's ROA?" Well, that's basically earnings per share.
Yeah.
We have to speak both languages, but it is all earnings.
Yeah. As we think about that 15% transportation revenue growth, how do you see that falling to the bottom line, do you have any specific ROA targets you can talk about?
Yeah. I am wearing a tie at a fintech conference, as I have pointed out to you.
Only one you have seen today.
I made a deal. I do not know if I made a deal. I told my team, I have not worn a tie in a very long time. In fact, when I started practicing law, people had just put away the ties. But I told them, "I am going to wear a tie until we are at a core 1.2% ROA." Should be like $3.80 a share or $100 million in net income. And the reason is because if I am wearing this, you cannot have that, right? Like, I need the team to tangibly understand we are moving away from look at all this stuff we built to look at how we can monetize the stuff we built, to look at how we can monetize it in a way to make it profitable. I get up every day and now think about it.
Yeah, the incremental margin for us in payments and in factoring and intelligence is extremely high. Extremely high. Both by virtue of organic growth and by virtue of what happens in the transportation market, the $350 million we generate of transportation revenue, if we can grow that 10%-15% a year, the earnings per share lift is dramatic. I mean, if you look at where the street is for us in Q4, that is 130% earnings growth from last Q4 to this Q4. There are not a whole lot of banks of $8 billion in assets that can grow earnings that much on a core basis in a year. I think we are doing the right things. The transportation market is healing itself from years of mismanagement, and those two things are coming together, which is good for us all.
If we assume that 15% transportation revenue growth going forward, what is the timeline we can expect to see you without a tie on? And does the mix of revenue-
Oh, you are getting precise. Well-
Does the mix of revenue between either factoring or intelligence or TriumphPay, does that make a difference too?
Sure it does. I mean, nothing scales faster than factoring. Factoring, we are going to generate $240 million of revenue at a 43% net operating margin, and the incremental margin is even higher than that because we built the technology and the team. We buy 33,000 invoices a day from 8,000 customers representing 70,000 trucks. It is a really hard thing for someone to chase us down in. It is a big market in front of us, but that business, going back to ROA, on a pre-tax ROA basis, that segment, which we report separately, is a 5% pre-tax ROA segment. There are no banks in the world that, or any financial institutions that can run the entire business on that sort of ROA basis. So it is an incredibly profitable thing we have built, and that is going to lead the way. EBITDA margin growth in payments is great. We want to approach 50%.
We are over 40% ex-LoadPay. I mean, a 50% EBITDA margin business is, I think, a really good thing. It just needs to scale. Then intelligence, if we get to this 1.2% ROA, which is the median for 300 publicly traded banks, we will be doing that at a time in which intelligence and LoadPay are still a drag on earnings. It is not like we are a stabilized, this is where we are going to run the bank forever. No, we are saying we can get to the median even as we are reinvesting $20 million a year into these businesses that are part of our value chain, which I think is a very compelling place to be.
Yeah. Now, I want to come back to intelligence, but
Sure
There has been pretty considerable disruption in the trucking industry this year, everything ranging from just general market conditions to some regulatory changes. How have these disruptions impacted the broader industry and then Triumph's business? Do you have any views you can share on how you see the market trending in 2027?
You all have seen cycles in other industries. This is the first supply constraint-driven cycle I have ever seen in my career. Generally, when you see a cycle in a business, it is demand that drives things. We genuinely have a supply-led cycle here. We are pulling trucks off the road, and I could talk hours about that, all the things I see, what I know. Between a combination of legislation, regulation, and litigation, I do not think we are ever going back. Even if a new regime comes in and decides to, the amount of illegal capacity that was on the road from 2021 to 2024 would blow your mind. You had people driving trucks and the license said no name given. They had bought their CDL with one, and they could not read our signs. People wanted to know why accidents were happening.
More than that, these people were even being taken advantage of. They were living in trucks like indentured servants, driving twice as much as allowed by law because you could reset the electronic logging device remotely. We had a supply-driven huge problem in our industry. Huge. If you think about everybody here just wants cheap goods. You want cheap goods. People want to drive down their cost to move things, and you do not care until one day you do care. All of a sudden, we started caring as a society, and I think we should. We should care about the drivers who were put in those positions, immigrants who literally were brought over here and stuffed in a truck. We should care about the safety of our roadways. We should just care about doing things the right way.
The amount of capacity that has come out of the system because of what the Secretary of Transportation has done, and then also the litigation risk. We have seen some enormous verdicts that now can reach to brokers, which will also reach to shippers eventually, based on negligent entrustment, who you hire to haul your freight. That is a dramatic change that, frankly, I do not see going away soon, and we really had a lousy year for demand. We did not move that much freight tonnage. It was not that bad. There were uneven pockets. AI certainly, build-out certainly helped things. If in 2027 we see any demand, every routing guide out there will break. There is not enough depth. You cannot find drivers. I was just in Chicago, met with 11 of our customers.
Used to be, "Aaron, I need freight." Now it is, "Aaron, I cannot find drivers. I am paying them $0.80 a mile, which is a $120,000 a year job." Who knew trucking could pay that well? That is how hard it is to find qualified drivers right now. Yeah, it is a sea change, and it has been very painful for us for the last three and a half years to live through it.
We are glad that hopefully we are on the backside of it.
Yeah, I was going to ask, do you think supply is bottomed now, or are there still more drivers to-
Oh, there is more. There is still plenty of illegal capacity. We still have 800 electronic approved ELD providers in this country, and 400 of them are made in China, and they can be reset. They have a backdoor built into them. There is absolutely cheating going on.
Right.
So there's more supply to come out.
Okay, interesting. What can Triumph offer to help the industry manage through these challenges? I know you've talked about how you guys are really well-positioned for this environment.
I mean, we paid 132,000 distinct trucking companies last year. Last quarter, excuse me. Last year, we probably paid close to 200,000. Payments don't lie. They don't tell you everything, but they tell you a lot of who showed up on time in full, a driving pattern. Using the payments data to help our customers make defensible hiring decisions is a new frontier in part of our intelligence business, right? We don't just have to make the payment for you. We can help you, we can source capacity to you that has shown a history of financial, doing the right things from a financial perspective. Like I said, that doesn't tell you everything, but it does tell you something about that driver. So there are multiple things we can do.
You've mentioned previously that these market tailwinds helping other parts of the business have kind of been a headwind for intelligence because of the impact on the smaller brokers that you serve. You've reiterated that the long-term thesis for intelligence is still intact, but the timings may be shifted. I want to get your view on the near-term revenue outlook for intelligence, but can you also explain Triumph's long-term value proposition and why you have a moat in this business in the age of AI?
Sure. Let me start with, like, our rollout of intelligence from the acquisition we made to get into it to the go-to-market strategy we built was not done well. I think too many CEOs sit up and go, "We did this well, we did this well. Oh, that's the market's fault." No, let me just own that. Could have been done better. We make mistakes. The industrial logic of Triumph using the data we have, the largest data source of paid and settled transactions available in the world is unquestionable. That makes all the sense in the world. We have a proprietary data set that you cannot get any other way other than making and touching 65% of brokered freight. The question then is, what's the best way to give that back to the market?
Should we be in the business of building customized models for our end users? Well, that's what we used to do, the business we bought used to do for small brokers, and small brokers are struggling right now because of all these consolidating forces. Perhaps, and we announced this in the last earnings call, shareholder letter, which I'm more interested in the go-to-market strategy of my customers, but I owe it to shareholders to tell them where our head is. The better way is just to offer that data as a service to people who want to build their own models, because in this AI world, anybody can build a model. Building customized models is kind of a It's not a fun business, right? I mean, you build customized models.
If you're right, you were supposed to be right, and if you're wrong, no one remembers when you were right. I'd rather just give people the data and go, "You build the model and tell me where the freight market's going." Because if I knew exactly where it was going, then we wouldn't be publicly traded. I'd be on a beach somewhere.
Yeah.
Predicting some of that stuff is hard. I think intelligence will grow this year. It won't grow in a parabolic manner. Over the long term, that is an incredibly high-margin business, because you can sell the same data infinite number of times, right? Our job is to, once again, how we built payments, we go to the market, we show them the value of what we're doing, our reputation in the market, what we do, and then over time, as people begin to adapt our system, adopt our data into what they do, then you begin to monetize it, because the gross margins in that business are going to be exceptionally high. It's just we need more revenue growth.
Yeah. What do you think helps you have the moat over the long term in that business?
We make the payments. People use different metrics to tell you where the transportation market's going. Quotes. Quotes are opinions. That's my opinion of what it should be to move this from here to there. Tenders. That's the tender of freight from a broker to a carrier. Well, a tender is an expectation. I tender it to you thinking you'll take it, but in our industry, you don't always take it. Quotes are opinions, tenders are expectations, payments are facts. There's no question that having an audited invoice that has been paid is the absolute truth as to what it costs on a certain lane at a certain time on a per-mile basis, and nobody has that anywhere close to the scale we do.
It's quality of data.
Yeah. For sure. It's real time, and payments don't lie.
You touched on this a second ago about some of the acquisitions you've made, and you guys have built most of your technical architecture, I think, in-house, but you've also had a few acquisitions, like HubTran and Greenscreens. How do you typically analyze the build-versus-buy decision, and what do you look for in an acquisition target?
Yeah, I mean, the thing we used to look for, HubTran was a very good acquisition. The factoring business we bought was an exceptional acquisition a long time ago. The first thing we look is, how does this help us from a density and distribution perspective? I think that's some of our secret sauce. Whatever view you have on Triumph, I promise you this, you could go ask anyone in the industry, we have the world's best distribution mechanism to provide products to carriers. Why? Because we pay them all. We know every carrier, whether they are a customer of ours or we just are paying them. Distribution really helps. Like, HubTran, buying that to help us get distribution in the broker channel was really good. In Greenscreens, there was distribution, but we already knew all those customers.
It was really a product, and that one we could have built ourselves too. It speeds you up to sometimes do acquisitions, but in every acquisition, the integration is never quite as smooth as you always assume it should be. I think for us, given that our value chain is set, audit, payments, liquidity solutions, digital banking, and intelligence, there's not likely to be an expansion of that value chain. I think there's $1 billion of revenue to go get in that value chain. Currently, we get $350 million of it. I'm not saying we won't do an acquisition, but that's not top of mind right now. Yeah.
Okay. We can open this up to questions to the audience as well. Just raise your hand if you have a question. They can bring a mic over to you. Across your different transportation offerings, you have balance sheet businesses, fee businesses, subscription businesses. Can you walk us through how you monetize all these? Like, how are you charging for the revenue? Talk about maybe how these different products can complement one another.
Sure.
You're offering a whole package, whole suite of offerings.
It's all about, I'm a giant believer in value chains. Everything you do should have an effect on the other things you do. This would go through our value chain. Audit. We audit invoices. That just means, is what's being submitted to you for payment what you contracted to do with that carrier? I mean, it's just audit. Auditing a $2,000 invoice, and we do millions of them. That's, we charge on a per invoice basis. That's a fee, right? Goes to our payments segment. Number two, payments. Payments is more than just the movement of funds or providing remittance instructions. Payments in our business is actually intelligent payments because we manage the notifications of assignment. Since 75% of all truckers are factored by somebody, we have to know who to pay.
It's not just, when I say payments, it's not just ACHs and wires, but it's actually making intelligent payment decisions on the data we have. So if you audit the invoice and then you pay the invoice, okay, that's pretty cool. The next thing is liquidity solutions. We can inject liquidity. What we're known for is injecting liquidity between the carrier and the broker, right? That's factoring. We buy the invoice, we pay the carrier, the trucker today, and then we collect from the broker 33 days later. You can also do supply chain finance where we inject liquidity between the shipper and the broker. To do that, it helps to have a balance sheet. Right now, that's $2.4 billion on our balance sheet of an $8 billion balance sheet.
I'd be content if it were all $8 billion of it, because it's 30-day trade payables to the largest I mean, you think about who our largest counterparties are, it's like C.H. Robinson, USPS, Coca-Cola, Anheuser-Busch, Nestlé. It's people who move things. We're talking about, you're getting 30-day trade payables from them that sit on the very top of the stack. We are a secured lender at a very high yield to them. So we're happy to inject liquidity from our balance sheet into the solution. Well, if you do those things, if you're injecting liquidity and making payments and you're a bank, then you ought to build a bank account so the money never leaves your system. I mean, our CFO, we talked about that. Why do we ACH so much money out?
Let's build a digital banking product so that the carrier actually uses our product and we can move the money from our factoring business to them or from our broker to them. That's a giant opportunity because if you do that, you get float revenue, right, which you well understand. Then the second thing you get is the interchange as that money is spent inside the truck stop. We're both the issuing bank and the program sponsor, so we don't need a banking as a service provider because we are the bank. We make about a 1.6% interchange fee, and that's pure fee, no balance sheet, no credit risk. So that's how you make money in digital banking.
Then lastly, intelligence. If you do all those things, if you audit invoices, pay invoices, buy invoices, i.e. inject liquidity, and you move money to your bank account, then you ought to take all that data you have and sell it back to the market as an intelligence solution, a data solution. That we just charge on a subscription basis. So we touch it. There's different ways the money comes in, but it all goes back to the value chain.
Yeah. If we're trying to track all this, you guys give a lot of different metrics, but it's kind of like the main ones we should be watching in terms of monetization be like PAR and the broker per revenue, which has been going up pretty nicely year to date.
Yeah, but PAR, product attachment ratio, 1.3, we'd like it to be higher. Don't miss this, because this is the long-term endgame of, like, where does Triumph top out from a profitability standpoint? Imagine a world in which we draft the money from a broker, pick a very large. We make payments for C.H. Robinson, make payments for seven of the top 10, right? We do business with 70 of the top 100 freight brokers. So you draft money from their account to make a payment. But that payment, the carrier who hauled that load is one of our factoring customers. Then the money we drafted from the account never left our bank, right? It just moved from one account to another, and then we earned a fee for providing that factoring service, the instant liquidity to carrier.
Then if that carrier will pay their driver with a LoadPay account, then now that money has changed hands three times, but it never left the bank. Product attachment ratio is cool, and sure, we should talk about that, but I am way more interested in the value of the transaction all the way until it is monetized and spent on a Coca-Cola in a truck stop, never leaving our custody, and us making it easy for people to access their funds. That is what I would look for.
Okay. You guys also announced a new North Star target during Q3. You are aiming for expenses in 2027 to be below $400 million. You are targeting $20 million of cost savings to get there. Can you talk about the areas of the business these savings are coming from and maybe the timeline for those to be achieved?
I mean, the timeline is now. I mean, there are things to do in the future, but if we have been a public company for 12 years. If we tell you we are going to do something, then you should assume we are going to do it, right? Because your reputation is worth more than anything. So assume, and assume if we tell you $20 million, we may have our eyes on more. Right? I mean, that is super important. This goes back to hitting the ROA target, right? Like, for the last three and a half years, we have said, "Look at what we are building, and oh, by the way, we are in the middle of a freight recession." You only get permission to do that for so long. Well, the freight recession is over, so I stopped complaining about that.
Then it is less about, "Look at what we are building," it is, "Look at how we are monetizing what we built." I think I fell victim to, and we as a team fell victim to, in 2021, I would sit across from investors and they are like, "Can you invest fast enough? Can you spend money fast enough as a publicly traded bank to compete up with these fintechs?" I think we made the mistake of doing too many things, trying to tackle too many problems. I think a lot of them were really good ideas. So now, in our technology organization, we are sequencing things in a way that we do not have to do everything right now. We are going to do these things really, really well because we know they will win and we will push the product roadmap does not need to do 10 things at once. Let us do two things.
You are going to see us achieve efficiencies as a result of that. I mean, that is a controllable thing, and we absolutely intend to control it.
Okay. You did mention autonomous trucking in your shareholder letter, and stated that obviously you believe it is coming, but the timing is a little bit more uncertain. What is like the range of maybe the timing investors should expect for the industry to adopt this more broadly, and how do you see Triumph's positioning in an autonomous world?
Yeah, I mean, autonomous trucking, the movement of goods from point A to point B with no driver in the cab, is here, but its use cases are very unique. You need to understand, trucking is also a value chain. A trucking company does not just move from point A to point B. They got terminals. There are all sorts of things that they need to do on a load that you cannot do autonomously yet. So autonomous is part of the solution. It is a labor-saving solution for a trucking company. I think that where we are going, between the regulatory things that we discussed earlier, the independent owner-operator is going to struggle. I do not want them to struggle. I do business with a lot of those guys, but I think they are going to struggle.
I think the mid-sized fleets are going to do well, and a mid-sized fleet that has 200 power units, 300 power units, they are very well-equipped to pull autonomous into the way they do business, right? You are not going to replace every driver. There are certain lanes that set up well for autonomous, where you can run overnight in rural lanes, where it is a very repeatable operating procedure. So I think autonomous is coming. I just do not think we are going to wake up tomorrow and we no longer need truck drivers. I think we are a long way from that.
Yeah. Okay. Can you talk about your factoring as a service business a little bit and how that's been going since you launched it about a year ago, and line of sight to having more partners sign up?
Yeah. I mean, building a great product is cool. Having distribution for a great product's even cooler. If C.H. Robinson, the largest freight broker in the world, is reselling your factoring business, that's pretty powerful. If RXO, the second-largest freight broker in the world, who's being bought by the largest freight broker in the world, by the way, is selling your product, that's pretty powerful. We have another announcement coming this quarter of another partner. Think of that a little bit like an American Airlines Citibank card. We are the bank. It's our balance sheet, it's our credit decisioning, it's our revenue.
It's a marketing referral agreement with our FAS partner, and they have carriers who want to do more loads with them, so they want to buy financial products branded under that relationship, just like you do things so that your preferred airline, you get more points and a higher status. That's great. That's the go-to-market piece of that strategy, but underneath it is us buying invoices every day, the same way we buy it in our first-party business.
Okay. You just brought this up, but C.H. Robinson, RXO's combination, those are obviously two large brokers combining. I think you could probably make an argument you might see the smaller brokers kind of being forced to consolidate as well, given the Montgomery decision and the impact of that. What do you think this period of consolidation could mean for Triumph's business?
Look, if there is not protection for the shipper, and the shipper is not the broker. The shipper is the person who makes the things. If the shipper thinks they have liability if that trucker has an accident, which they never used to think prior to Montgomery, then if I am a shipper, am I going to work with a very small broker, or would I be willing to pay 3% more to work with the largest broker who I know has a commercial auto policy that sits between me and liability? That is a consolidating factor. That does not mean every small broker will go away. I am not suggesting that.
I am just saying the Fortune 1000 companies are going to be more likely to tender freight to large brokers now than they would have been, because that is an extra layer of liability shield between them and the I mean, every million miles, something bad happens. Somebody dies. It is just what happens. May not be the trucker's fault. In fact, most of the time it is not the trucker's fault. It is just truckers are not very sympathetic plaintiffs, and juries do not always make rational decisions. They make emotional decisions. And there is some horrible facts out there, but a $700 million verdict for C.H. Robinson on a load they got paid $200 to move. Think about that risk-reward scenario. No business in the history of time can make that trade-off. So we have got to figure some things out.
But until we do, I think it is a consolidating factor in brokerage.
Yeah. How do you think that impacts Triumph's business?
70 of the top 100 are our customers. Like, we didn't aggregate of the 560 broker customers we have. Almost all of them are in the top 1,000, and there's 15,000 brokers. For us, consolidation at the top is not a bad thing.
Yeah.
It's probably a good thing for us.
Okay. Last question for you. I want to talk about LoadPay a little bit. It's an interesting product because it's more of a direct-to-consumer banking app almost, and a lot of the features are designed specifically for truck drivers. What's the customer feedback been so far? I know you guys have made some changes to the product and brought in new features over the last year or so.
Yeah. I mean, we've gone from 0 to 14,000 customers. That's pretty cool, but that's not. The revenue grew 270% year-over-year. It's a very small denominator, as you know. I think the main thing is the ability to get funded 24 hours a day. LoadPay is connected to Triumph's payments network and Triumph's factoring. We can move money 24/7. We do not have to wait for the ACH rails. We don't have to do push to debit. We don't have to do all the workarounds that other people have to do. We can just literally move the money in a sub-ledgered account inside the walls of our institution. So instant access to funding 24/7 is a step change when your customers are liquidity starved. The second thing is just imagine if your entire banking experience was built with a trucker in mind.
Like, if you were to log on to a LoadPay website, you would see a lot of things that unless you were a trucker, you wouldn't care about. I think the features are great. We paid 2,500 financial institutions last quarter, so we're competing for those customers who bank at banks that don't get up every day and think about trucking. I like that. I like that we're competing against people who aren't passionate about trucking like we are, but it's still hard to get people to move bank accounts.
I mean, what's the distribution and marketing strategy to try and sell this to truck drivers?
If anyone was going to do it should be us. We pay every trucker largely every week. So it's a very simple, "Would you like to get paid faster and cheaper?" That's the simple marketing. The actual onboarding and all that comes with it will require work. But the distribution, that's why I wanted to build it, because I knew we already had the distribution.
And what are your longer-term growth plans here? I believe you guys have talked about a $750 target on-
Yeah, revenue per account.
-Revenue per account.
That's basically built on that's 90% driven by interchange fees and 10% driven by float.
Yeah. Great. Well, thank you, Aaron.
Thank you.
Great.
Appreciate it.
Thanks, Aaron.