And as we think about in a world where money is no longer free, there is time value of money of people who would like for us to provide liquidity and we tried to lay out for you in the letter all the different ways, all the different options that we can use our balance sheet to help add liquidity into this transactional flow. I can’t tell you exactly how much it will grow. I can’t tell you whether it’ll be doing extended standard pays for shippers or more factoring or supply chain finance for freight brokers, I mean, each of those are independent — individualized discussions, but I would say, that we get a lot of inbound requests for us to step in to that value chain that we illustrated to you in this letter and for us to inject liquidity into it.
So I think it’s an opportunity, absolutely.
Thomas Wendler: Thank you. And then, as you said in your comments about all the provisioning this quarter was bad, we saw some pretty strong growth in C&D. Can you give me some color around new production? And then how are you thinking about growth in construction moving forward?
Todd Ritterbusch: The growth that you saw in C&D was related to one relationship that we have. It’s a long-term relationship. It’s a great relationship. They came to us with an opportunity that offered terrific risk-adjusted returns and so we jumped at that opportunity. More broadly, when we think about construction and development, we’re going to be selective. It’s going to be those sorts of opportunities that are with existing clients and will probably be much smaller than what you saw in the first quarter.
Thomas Wendler: All right. Thank you for answering my question.
Operator: Our next question will be from Tim Switzer of KBW.
Tim Switzer: Hey, good morning. Thank you for taking my question.
Aaron Graft: Good morning, Tim.
Tim Switzer: The press release, hey, thank you. The press release is great, Aaron, where you’re outlining the path to over potentially $1 billion in revenue for Triumph over the long-term, and we try to think about the long-term earnings implication of that. Historically, you guys have kind of talked about like a 50% EBITDA margin for TPay. What’s the overall margin we could maybe assume on that $1 billion over the long-term? And what’s like the ROE, ROA profile there?
Aaron Graft: Yeah, that’s a tremendous question. I’m sure there’s people at the table like, wanting to tackle me right now. Let’s just, look, we know that and we can demonstrate to you in the industry that networks generally achieve EBITDA margins that are higher than most other business lines. That’s true in transportation, although there frankly aren’t a lot of — there is no financial network that exists in transportation other than the one we’re building. I would say, I would go back to what I’ve said historically is, we think that this ultimately settles in somewhere between 50% and 70% EBITDA margin. Now here’s the big question embedded in that, and it ties to the revenue discussion. We laid out for you the ways in which we can touch a single load of freight at the shipper level, at the broker level, at the factor level, at the carrier level, and at the vendor level, which is when the carrier goes in and spends that margin that they were paid to recover their — to cover their next load.
A day will come when we touch that value chain in so many different places that we’re going to say not all of that belongs on our balance sheet. It doesn’t all belong on it. We’re not going to grow our balance sheet to the sky. We are using our balance sheet right now as a strategic advantage. Because no other fintech trying to compete with us can go do what we can do to open the doors we can open. But a day will come when the syndication of that risk into the broader capital markets, which I think would want exposure to that paper, that day will come. And when you do that, and you look at how capital efficient the remainder of the business is and the fees that are generated for it, and the float that we generate, then you’re going to skew to the higher end of that EBITDA margin fairway that we’ve laid out for you.
But this journey won’t be done next quarter, next year, even in two years. I mean, this is — we’re doing something that’s not been done before. The great news is, there’s not a lot of incumbents that we have to displace from here to where we are going. But it is a tremendous amount of work to get there. And we believe that a $1 billion revenue opportunity is realistic, I get it, that’s 20 times where we are right now, but we can see where we are embedded in the transaction. We see the inbound interest in what we do, and we understand, for analysts and investors, that we must do that in order to grow the valuation, we must do that where our EBITDA margin looks more like a SaaS business and a more capital efficient, less balance sheet intensive business, and so that’s in the out years.
So I hope that answers the question, at least gives you a fair way of what we think it looks like as we start to approach maturity, how we think we get there, and what we think we look like, those are my best thoughts at current.
Tim Switzer: Okay, great. Yeah, I appreciate that. I understand the difficulty of talking about some of these longer-term projects and what it looks like ultimately. But you also mentioned about half of that $1 billion of future revenues from revenue streams you haven’t necessarily capped yet. I know some of these are expanding to the shipper market, some data-related products, could you talk about maybe the potential timelines of when we could get more color on these? When you can maybe start to roll some of these newer ones out? And which new products would you be most excited about?
