Target Hospitality Announces Second Quarter 2026 Results Highlighting Strong Execution on Recent Contract Awards and Sustained Momentum on Strategic Growth Initiatives

Target Hospitality Corp. ("Target Hospitality", "Target" or the "Company") (NASDAQ: TH), one of North America's largest providers of vertically-integrated modular accommodations and value-added hospitality services, today reported results for the three months ended June 30, 2026.Financial and Operational Highlights for the quarter ended June 30, 2026Revenue increased 39% to $85.5 million compared to the same period in 2025. Net loss of $9.0 million. Basic and diluted loss per share of $0.09. Adjusted EBITDA(1) increased more than 5x year-over-year to $18.2 million, driven by significant growth in the Company's Workforce Hospitality Solutions ("WHS") segment. Generated year-to-date Net Cash Provided by Operating Activities of $111.0 million and Discretionary Cash Flow(1) ("DCF") of $108.2 million led by a significant increase in advance payments from customers associated with recent WHS segment contract awards. Approximately $141 million of total available liquidity, with a total net leverage ratio of 0.6x as of June 30, 2026. On July 24, 2026, closed a new $660 million asset-based revolving credit facility, significantly enhancing the Company's financial flexibility through expanded liquidity and reducing borrowing costs by up to 250 basis points. Since January 2026, secured over 9,000 contracted beds in the expanding WHS segment, supported by sustained demand across AI-driven data center and large-scale power generation infrastructure development. Advanced discussions on commercial opportunities across diverse geographic regions to support the accelerating demand for data center, power generation, and other critical infrastructure development. Target Hyper/Scale, focused on highly customizable solutions across high-value WHS segment markets, continues to resonate with prospective customers and supports an active growth pipeline exceeding 20,000 beds of potential opportunities.Executive Commentary"Our second-quarter results demonstrate our ability to execute at scale while simultaneously responding to accelerating customer demand. Since January, we have announced over $1.4 billion of multi-year contract awards representing over 9,000 beds in our rapidly expanding WHS segment. These accomplishments have strengthened our business fundamentals through durable, long-term contracts, reinforcing confidence in our strategic growth initiatives. Combined with closing a new $660 million credit facility, we have substantial financial flexibility to pursue the deepest commercial growth pipeline in our history," stated Brad Archer, President and Chief Executive Officer."Our industry-leading capabilities and proven operational execution continue to drive progress across concurrent community developments, while accelerating end-market demand validates the scalability of our Target Hyper/Scale platform and the strength of our vertically integrated model. These fundamentals underpin ongoing and advanced discussion across a robust pipeline of potential commercial opportunities. Supported by enhanced liquidity, strong revenue visibility, and consistent cash flows, we believe Target is uniquely positioned to capitalize on a multi-decade secular demand cycle across AI-driven infrastructure, power generation, and critical infrastructure development — delivering sustainable growth and long-term value creation for our shareholders," concluded Mr. Archer.Financial ResultsSecond Quarter Summary Highlights For the Three Months Ended ($ in '000s, except per share amounts) -(unaudited) June 30, 2026 June 30, 2025 Revenue $ 85,455 $ 61,606 Net loss $ (8,981) $ (14,918) Loss per share – basic and diluted $ (0.09) $ (0.15) Adjusted EBITDA(1) $ 18,215 $ 3,503 Average utilized beds 11,760 7,482 Utilization 67 % 45 % Revenue was $85.5 million for the three months ended June 30, 2026, compared to $61.6 million for the same period in 2025, a 39% increase.Adjusted EBITDA(1) was $18.2 million for the three months ended June 30, 2026, compared to $3.5 million for the same period in 2025, a 420% increase.These increases were primarily driven by significant growth in the Company's WHS segment and the completion of the ramp-up phases associated with the contract award at the Dilley, Texas community ("Dilley Community") in the Government segment.As previously announced multi-year WHS contracts continue to scale over the coming quarters, the combination of strong unit economics and increasing operational leverage is expected to support continued Adjusted EBITDA(1) growth.Capital ManagementThe Company had approximately $131.9 million of capital expenditures for the three months ended June 30, 2026, primarily related to growth in the Company's WHS segment.As of June 30, 2026, the Company had approximately $6 million of cash and cash equivalents and borrowings of approximately $40 million on the Company's $175 million credit facility, total available liquidity of approximately $141 million, and a total net leverage ratio of 0.6x.On July 24, 2026, the Company replaced its prior $175 million asset-based revolving credit facility (the "Previous Facility") with a new $660 million asset-based revolving credit facility (the "New ABL Facility"). The New ABL Facility, which matures in July 2031, significantly strengthens the Company's liquidity position, extends its debt maturity profile, and enhances financial flexibility. With this expanded financial capacity, the Company remains focused on disciplined capital deployment to support recently announced contract awards and potential incremental contract wins while maintaining strong liquidity and balance sheet flexibility.Business UpdateTarget's vertically integrated, customer-centric solutions continue gaining traction across rapidly expanding AI infrastructure and power generation markets. Since January 2026, the Company has announced over $1.4 billion in multi-year contract awards, accelerating growth in its WHS segment. These awards are backed by meaningful customer commitments, including advanced payments, helping fund growth investments and support efficient capital deployment. Combined with the New ABL Facility, this gives Target meaningful financial flexibility to simultaneously execute on its existing contract portfolio and expanding commercial pipeline opportunities.The expanding WHS segment reflects Target's successful pivot toward high-value end markets with long-term secular momentum and its ability to deliver mission-critical solutions for complex customer requirements. Its scalable operating model, vertically integrated capabilities, and Target Hyper/Scale platform enable the Company to efficiently develop and operate customized communities across diverse geographies—supporting customer project execution while providing essential infrastructure, services, and workforce accommodations for the local communities in which they operate.Target's multi-decade operational track record of responding to evolving customer needs with innovative, scalable, speed-to-market solutions, combined with building end-market demand, has established the most active and dynamic commercial pipeline in the Company's history. With more than 9,000 WHS beds contracted since January 2026 and active discussions representing additional potential growth opportunities exceeding 20,000 beds, Target is well positioned to expand existing relationships and win new developments as a trusted, preferred provider.The financial foundation to pursue this pipeline is equally strong. Target's New ABL Facility expands the Company's capital resources, liquidity, and financial flexibility. Combined with a growing portfolio of high-quality contracts providing strong revenue visibility, predictable cash flows, and attractive unit economics, Target has the financial capacity to fund its growth pipeline while maintaining a disciplined financial profile that supports accelerating demand and value-creating initiatives.The Company's modular asset platform further strengthens this financial profile. Target's ability to redeploy assets across customers and geographies provide a distinct competitive advantage. Its proven ability to maximize asset utilization over a multi-decade lifecycle enhances capital efficiency and, with strong unit economics and cash flow conversion, supports industry-leading returns on invested capital.As large-scale infrastructure developments grow more remote, complex, and time-sensitive, customers increasingly rely on Target's integrated turnkey solutions to accelerate execution and address operational challenges. Supported by strong, geographically diverse demand across North America, the Company believes it is in the early stages of a multi-decade investment cycle spanning data centers, power generation, and other critical infrastructure. As a trusted provider of mission-critical services to world-class companies, Target is uniquely positioned to capitalize on this accelerating end-market demand.Full Year 2026 Financial OutlookMeaningful growth in the WHS segment continues to validate Target's vertically integrated operating model as a distinct competitive advantage, enabling the Company to meet dynamic customer requirements. These scalable operations, supported by strong contract unit economics, are anticipated to drive consistent revenue and Adjusted EBITDA(1) growth through the balance of 2026 and form the basis for the Company's increased outlook, reflecting new community activity and the growing contributions of recently awarded WHS contracts.Total revenue between $410 and $420 million Adjusted EBITDA(1) between $85 and $95 million Total Capital Expenditures between $490 and $510 million, excluding acquisitions As previously announced WHS contract awards continue to ramp through 2026, along with the build-out and completion of more recently announced communities associated with these contract awards into 2027, the Company expects revenue and Adjusted EBITDA(1) growth. Target's expanding operational scale and strong unit economics are also anticipated to support margin improvement over this period. Together, these factors position the Company to achieve annualized revenue exceeding $700 million and annualized Adjusted EBITDA(1) above $260 million exiting 2027. This projection assumes annual variable revenue from WHS contract awards of approximately $30 million, above the committed minimum. This projection is supported entirely by Target's existing contract portfolio and assumes no contribution from the Company's commercial pipeline.Segment Results – Second Quarter 2026Workforce Hospitality SolutionsRefer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s) - (unaudited) June 30, 2026 June 30, 2025 Revenue $ 36,328 $ 15,042 Adjusted gross profit(1) $ 19,435 $ 3,687 Revenue for the three months ended June 30, 2026, was $36.3 million, with adjusted gross profit of $19.4 million.The increases were driven by growing contributions across the WHS portfolio, as several communities advanced through their ramp-up phases and more contracted beds transitioned from construction into the services phase. With average WHS utilized beds surpassing 4,000 during the quarter, Target continues to demonstrate the depth of its operational platform, the scalability of its business model, and its ability to support multiple large-scale customer developments concurrently.The Company expects to benefit from increased operational efficiencies as WHS communities continue to scale. Combined with strong unit economics, these efficiencies are expected to support continued Adjusted EBITDA(1) growth. Driven by the continued build-out and increased operational activity across recently announced large WHS contracts, Target expects this segment to be the Company's largest operating segment for full year 2026.Hospitality & Facilities Services - South Refer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s, except ADR) - (unaudited) June 30, 2026 June 30, 2025 Revenue $ 32,639 $ 36,166 Adjusted gross profit(1) $ 7,357 $ 10,547 Average daily rate (ADR) $ 72.36 $ 69.62 Average utilized beds 4,880 5,632 Utilization 70 % 76 % Revenue and adjusted gross profit for the three months ended June 30, 2026, were $32.6 million and $7.4 million, respectively. The year-over-year declines were driven by lower revenue from reduced utilization, partially offset by a decrease in community operating costs and increased ADR.Target continues to optimize its HFS – South network of communities with a focus on disciplined pricing, cost efficiency and asset utilization, while preserving flexibility to redeploy capacity toward high-return growth opportunities across its broader portfolio.GovernmentRefer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s) - (unaudited) June 30, 2026 June 30, 2025 Revenue $ 13,495 $ 7,487 Adjusted gross profit(1) $ 6,396 $ (1,080) Revenue for the three months ended June 30, 2026, was $13.5 million compared to $7.5 million for the same period in 2025. Adjusted gross profit for the period was $6.4 million compared to ($1.1) million for the same period in 2025.The increases were primarily driven by the reactivation of the Dilley Community in March 2025.The Company expects to incur certain transitional costs related to ongoing network optimization initiatives in the Government segment over the balance of 2026, which are expected to temporarily impact segment operating margins and is incorporated into the Company's full year 2026 outlook.All OtherRefer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures For the Three Months Ended ($ in '000s) - (unaudited) June 30, 2026 June 30, 2025 Revenue $ 2,993 $ 2,911 Adjusted gross profit(1) $ 27 $ 102 This category of operating segments consists of hospitality services revenue not included in other segments. Revenue for the three months ended June 30, 2026, was $3.0 million compared to $2.9 million for the same period in 2025.Conference CallThe Company has scheduled a conference call for August 10, 2026, at 8:00 a.m. Central Time (9:00 am Eastern Time) to discuss the second quarter 2026 results.The conference call will be available by live webcast through the Investors section of Target Hospitality's website at www.TargetHospitality.com or by connecting via phone through one of the following options:Please utilize the Direct Phone Dial option to be immediately entered into the conference call once you are ready to connect.Direct Phone Dial(RapidConnect URL): https://emportal.ink/4vmVSwsOr the traditional, operator assisted dial-in below.Domestic: 1-800-836-8184Please register for the webcast or dial into the conference call approximately 15 minutes prior to the scheduled start time.

Target Hospitality Announces Second Quarter 2026 Results Highlighting Strong Execution on Recent Contract Awards and Sustained Momentum on Strategic Growth Initiatives

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