Core Insights - The company reported progress towards its long-term goals, emphasizing revenue growth and operational efficiency despite challenging market conditions in the trucking industry [3][4][5] - The management team aims to enhance transaction confidence in the industry by strengthening their network for secure data and payment transmission [4][6] - Load Pay is expected to significantly contribute to revenue growth, with a target of tripling its annualized revenue from $1.5 million in 2025 to $4.5 million in 2026 [10][11] Financial Performance - The company achieved a 30% EBITDA margin in its core payments business, with expectations to maintain or exceed this level in 2026 [5][27] - The factoring segment's pretax margin improved to approximately 33% in Q4 2025, driven by technology and automation enhancements [20][22] - The company anticipates continued revenue growth in the payments segment, with a projected 25% increase in payments revenue for 2026 [25][30] Strategic Initiatives - The company plans to open between 7,000 to 12,000 new accounts in Load Pay, aiming for higher utilization rates to increase revenue per account [10][11] - There is a focus on cross-selling opportunities, with only 22% of customers currently using both payments and audit services, indicating significant room for growth [16][17] - The management is optimistic about leveraging artificial intelligence and machine learning to enhance operational efficiency and drive margins higher in the factoring business [22][23] Market Positioning - The company has successfully integrated JB Hunt into its network, which is expected to bolster revenue contributions [5][25] - The management acknowledges the evolving nature of the payments network and its potential to create efficiencies for factoring companies, although adoption rates may vary [36][40] - The company is committed to maintaining a strong balance sheet to navigate unforeseen market cycles while pursuing growth opportunities [6][7]

On profitability, Graft said management expects to “grow revenue and hold expenses in check” in 2026. As one example, he said the company’s core payments business is currently producing an EBITDA margin above 30% and should trend higher in 2026, with a longer-term goal of 50% or greater. He also positioned LoadPay as a future contributor to more capital-efficient margins inside the payments segment, calling the industrial logic of directly connecting payors and payees across the bank’s payment rails “increa ...

Financial Data and Key Metrics Changes - The company reported a focus on revenue growth and lean operations, with non-recurring items positively impacting results, indicating a strong operational focus [1][2] - The core payments business is expected to maintain an EBITDA margin above 30% in 2026, with a long-term goal of achieving 50% or greater [4][5] Business Line Data and Key Metrics Changes - LoadPay exited the quarter with annualized revenue of $1.5 million, with expectations to triple this amount in 2026 through a combination of account growth and increased revenue per account [11][12] - The pre-tax margin for factoring improved to around 33% in the fourth quarter, driven by technology and automation, with expectations for continued margin expansion [26][27] Market Data and Key Metrics Changes - The company anticipates a flat freight market for the upcoming year, which will influence growth projections for the factoring business [18][19] - The percentage of payments charged a fee increased from 31% to 35% in the fourth quarter, indicating improved monetization of the payments network [22][23] Company Strategy and Development Direction - The management aims to strengthen the network for secure data and payment transmission, which has led to revenue growth despite challenging market conditions [3] - The strategy includes building a strong balance sheet to withstand economic cycles while improving margins and profitability [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory towards profitability, emphasizing the importance of linking and funding accounts to drive revenue growth [12][14] - The company acknowledged the need for efficiency improvements in the face of expected expense increases in the first quarter [10] Other Important Information - The company is focused on cross-selling opportunities, with only 14% of current audit and payment customers using the intelligence solution, indicating significant growth potential [47] - Management noted that the network's growth has not followed initial expectations, but long-term prospects remain positive [57] Q&A Session Summary Question: Expense outlook for Q4 2026 - Management confirmed that the $6 million savings from the sale of a building and airplane is included in the first quarter estimate and will be part of the run rate going forward [10] Question: LoadPay revenue growth assumptions - LoadPay expects to open between 7,000 and 12,000 accounts in 2026, with a revenue target of $750 per account [12] Question: Contribution of Factoring as a Service to growth - Factoring as a Service is growing faster than other segments but remains immaterial in terms of overall growth contribution [18] Question: Cross-selling opportunities with audit and payment customers - There is significant room for improvement in cross-selling, with many customers not yet utilizing both services [21] Question: Expected revenue contribution from Trusted Freight Exchange - The Trusted Freight Exchange is still new, and while it is expected to drive revenue growth, the largest opportunity lies in cross-selling with existing customers [47] Question: Risks associated with credit loss expense - The company focuses on understanding the risks associated with underlying borrowers, with a short duration on average in the factoring business [69][70] Question: Strategic benefits of the ABL business - The ABL business was expected to complement transportation-related offerings but has not performed as anticipated [72]

Financial Data and Key Metrics Changes - The company reported a focus on revenue growth and lean operations, with non-recurring items positively impacting results, indicating a strong operational focus [1][2] - The core payments business is expected to trend above a 30% EBITDA margin in 2026, aiming for 50% or greater in the long term [4][5] Business Line Data and Key Metrics Changes - LoadPay exited the quarter with annualized revenue of $1.5 million, with guidance to triple this amount in 2026 through a combination of account growth and increased revenue per account [11][12] - The pre-tax margin for the factoring segment improved to around 33% in the fourth quarter, driven by technology and automation [26][29] Market Data and Key Metrics Changes - The company anticipates a flat freight market for the upcoming year, which will influence growth projections [19] - The percentage of invoices monetized in the payments segment increased from 31% to 35% in the fourth quarter, with further increases expected in the first quarter [22][38] Company Strategy and Development Direction - The management aims to strengthen the network for secure data and payment transactions, which has led to revenue growth despite a challenging trucking industry [3][5] - The company is focused on maintaining a strong balance sheet to withstand unforeseen cycles while improving margins and profitability [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory, emphasizing the importance of efficiency and balance sheet strength [2][3] - The company acknowledged the need for continued efficiency improvements in the face of seasonal expense increases [10] Other Important Information - The company has successfully integrated most legacy contract customers into its NextGen Audit, which is expected to enhance cross-selling opportunities [20][21] - The Trusted Freight Exchange (TFX) is still new, with the largest growth opportunities seen in cross-selling to existing audit and payment customers [46] Q&A Session Summary Question: Expense outlook and impact of asset sales - Management confirmed that the $6 million savings from the sale of a building and airplane is included in the first quarter expense estimates [10] Question: LoadPay revenue growth assumptions - LoadPay's revenue growth is expected from opening 7,000 to 12,000 accounts and increasing utilization, with top accounts generating over $5,000 annually [12][14] Question: Contribution of Factoring as a Service to growth - Factoring as a Service is growing rapidly but remains immaterial to overall growth; projections assume a flat freight market [18] Question: Cross-selling opportunities with audit and payment customers - Only 14% of current audit and payment customers use the intelligence solution, indicating significant cross-selling potential [46] Question: Credit loss expense and risk management - The company focuses on understanding the risks associated with underlying borrowers, emphasizing tight credit policies [68][69]

Financial Data and Key Metrics Changes - The company reported a focus on revenue growth and lean operations, with non-recurring items positively impacting results, indicating a strong performance trajectory towards long-term goals [1][4] - The core payments business is expected to maintain an EBITDA margin above 30% in 2026, aiming for 50% or greater in the long term [5][40] Business Line Data and Key Metrics Changes - LoadPay exited the quarter with annualized revenue of $1.5 million, with guidance to triple this amount in 2026 through a combination of account growth and increased revenue per account [11][12] - The pre-tax margin for factoring improved to around 33% in Q4, driven by technology and automation, with expectations for continued margin expansion [24][27] Market Data and Key Metrics Changes - The company anticipates a flat freight market for the upcoming year, which will influence growth projections for the factoring business [18] - The percentage of payments charged a fee increased from 31% to 35% in Q4, with December reaching 38% [21] Company Strategy and Development Direction - The management's strategy focuses on strengthening the network for secure data and payment transmission, aiming to translate this vision into profits [4][5] - The company is committed to maintaining a strong balance sheet to withstand unforeseen cycles while working through legacy assets [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the trucking industry but expressed confidence in the company's value proposition and growth trajectory [4] - The company is focused on improving cross-selling opportunities, particularly between audit and payment customers, to drive revenue growth [44] Other Important Information - The company has welcomed J.B. Hunt to its network, which is expected to contribute positively to revenue [4][32] - Management emphasized the importance of maintaining capital for resilience during downturns [6] Q&A Session Summary Question: Expense outlook and impact of asset sales - Management confirmed that the $6 million savings from the sale of a building and airplane are included in the first quarter expense estimates [10] Question: LoadPay revenue growth assumptions - LoadPay's revenue growth will come from opening 7,000 to 12,000 accounts and increasing utilization, with a target of $750 revenue per account [11] Question: Factoring as a Service contribution to growth - Factoring as a Service is growing rapidly but remains a small percentage of overall growth; projections assume a flat freight market [17] Question: Cross-selling opportunities with audit and payment customers - Only 14% of current audit and payment customers use the intelligence solution, indicating significant cross-selling potential [44] Question: Expected revenue contribution from J.B. Hunt - Specific revenue contributions from J.B. Hunt cannot be disclosed, but it aligns with previous guidance on pricing relationships [34] Question: Credit loss expense and risk management - The company reported a negative credit loss expense, indicating recoveries exceeded new provisions; focus remains on understanding borrower risks [66][68] Question: ABL business strategy - The ABL business was expected to complement transportation offerings but has not performed as anticipated, leading to non-transportation-related exposure [70]

Core Insights - The company is focused on achieving 20% annual growth in transportation revenue while also driving margin expansion through operational efficiency [2][10][21] - A restructuring initiative has been implemented to reduce the expense run rate by 5%, with most savings expected in the fourth quarter [3][4][30] - The company has successfully integrated its products and services, enhancing its value proposition in the transportation market [7][19] Revenue Growth Strategy - The company aims to grow its factoring segment by 20%, leveraging a robust go-to-market strategy and bundled products [10][15][42] - The payments business is expected to grow significantly, with a focus on enhancing customer relationships and expanding the payments network [17][20][63] - The intelligence segment is projected to grow, with a pilot program aimed at obtaining critical shipper data to enhance service offerings [44][45] Operational Efficiency - The company has made significant investments in technology, spending $110 million to enhance its operational capabilities [32][33] - A focus on efficiency is emphasized, with plans to maintain flat expenses while driving revenue growth [30][31] - The integration of various business segments is aimed at reducing duplication and improving overall operational effectiveness [35][63] Market Position and Competitive Landscape - The company holds a strong market position, touching a significant portion of invoices in the transportation sector, which provides a competitive edge [60][61] - The company emphasizes a customer-centric approach, aiming to deliver a comprehensive value chain that includes liquidity solutions, digital banking, and intelligence [40][42][63] - The competitive landscape is characterized by a need for integrated solutions, with the company leveraging its extensive data and technology to maintain its leadership [62][63]