Aaron Graft: Yes, great question. And so, obviously, starting last quarter, we gave you one, that’s LoadPay, which is not a fuel card, right? Just I don’t know why I feel the need to say that now, but I do want to say it. It’s a virtual wallet that allows our customers and the fuel cards they use to inter — exchange value with each other, regardless of the time of day, regardless of whether it’s a holiday. You referenced data, look, data in the transportation space is in and of itself, at least a $1 billion market, and probably greater, depends on the things you count when you talk about from load boards to rain late data products, all these things, and there are many players in that space, and there are many smart companies in that space.
We think we have our own value proposition to bring to data. Why? Because we’ve paid more truckers than anyone in the world. And when you pay truckers, you know certain things about truckers that other people can’t see, don’t see, won’t see, and so as we go forward, I think you’ll hear us talk about in 2025 some of the things we want to do to add value to the industry to protect — to help protect our customers from fraud, to help them create more efficient processes, to help them find carriers. We have some ideas, but that is a 2025 initiative and beyond because we got enough to say grace over right now. Beyond that, you referenced the shipper market. We make payments for roughly 50 shippers, and we have some very large shippers, some Fortune 1000 shippers who are part of that.
I refer you back to the value chain we laid out. The data that is needed by the factor to buy the invoice from the carrier is the same data that the factor will need to submit to the broker in order to get paid, and that same data needs to be submitted by the broker to the shipper to get paid. We are the ones who hold that data. We have it in a structured format. So part of this journey that is in that revenue that’s more opaque at this time is to take that structured data to the shipper market, where every one of these loads, every single load starts there. No broker makes anything, all of the loads start in the shipper market. And we’re talking about $300 billion plus of procured transportation is what US companies need to go get. So between shipper and data and some of the other things we’re thinking about, you’ll start to hear us talk about that in 2025.
We’ll start to give you more specificity as we go and I think it will make it more clear what that roadmap is and why I can say to you with a great deal of conviction that I believe our opportunity to turn TriumphPay into something that generates $1 billion plus in revenue at very high margins is indeed a very real thing.
Operator: Our next question comes from Hal Goetsch of B. Riley.
Hal Goetsch: Thank you. I’ve got two questions. One on the Factoring business. The business is down quite substantially, over probably 40% double-digit negative comps now for two years, and a big part of that is just invoice price that’s probably dominated as invoice prices are down from $2,500 to $1,800, and that would suggest, say, the volume is down, the overall volume is down low-double-digit, but you said this is the worst you’ve ever seen, is it the worst and the longest you’ve seen now? Because this appears to be near a low, wanted to get your thoughts on that trajectory. Thanks.
Tim Valdez: Yeah, Hal, I’ve never seen anything like this. I have been in this business now for over 25 years and when you look at the length of this slowdown, it is historic. I mean, Aaron mentions it in the letter. I’ve never seen anything like this. Now, we have seen a normalization of that — of those rates, so we track very closely a couple of things. One thing that’s really important to us is we track how fuel impacts our carriers and what that means on their average invoice amount. So if you look at fuel prices increasing week-over-week on the DOE average and invoices not reacting, usually there’s about a week lag, but if the invoice doesn’t react within a fairly short period of time, we know there’s no pricing power for that particular carrier in that constituent.
What we’ve noticed in the first quarter is that our small carrier segment has stabilized and the average invoice amount for the small carrier can’t go any lower to Aaron’s point in the letter, it can’t go any lower because we’re already at breakeven or below in some cases. Where we saw the weakness more in the first quarter is the contract rate and the margin between contract and spot rates contracting a little bit. And so ultimately those have to normalize as well before we start to see something change.
Hal Goetsch: Okay. And one follow-up question on the deposit franchise. Do you think we’ve seen the peak in deposit cost increases that we’ve seen the bulk of the surge and can you also just comment on how you use the broker deposits from time to time? It seems to fluctuate a little bit. Thanks.
Todd Ritterbusch: Sure. I’ll answer the deposit question. So I don’t think that we’ve seen the peak in deposit costs. As long as you see rates available in the marketplace, on promotions above 5% and we’re carrying a cost of deposits that is much, much lower than that, there will be upward pressure on our deposit costs. We do anticipate that when rates do begin to come down, we’ll be able to capitalize on that and bring our rates down in line to a large extent. But for the time being, we do expect rates to continue to creep higher in our core deposit franchise. Brad, do you want to address the other question?
