Aug 10, 2026, 7:02 AM ETIndustrials

Target Hospitality — Second Quarter 2026 Earnings Summary

THTARGET HOSPITALITY CORP

Financial Performance

Revenue increased 39% year-over-year to $85.5 million for the quarter ended June 30, 2026, compared to $61.6 million in the same period in 2025.
Net loss was $9.0 million, improving from a net loss of $14.9 million in the prior year period.
Basic and diluted loss per share was $0.09, compared to $0.15 in the prior year period.
Adjusted EBITDA increased more than 5x year-over-year to $18.2 million, up from $3.5 million in the prior year period.
Year-to-date Net Cash Provided by Operating Activities was $111.0 million, and Discretionary Cash Flow (DCF) was $108.2 million.
Capital expenditures for the quarter were approximately $131.9 million, primarily related to WHS segment growth.
As of June 30, 2026, the Company held approximately $6 million in cash and cash equivalents with $40 million in borrowings on its $175 million credit facility.
Total available liquidity was approximately $141 million with a total net leverage ratio of 0.6x.
Deferred revenue and customer deposits increased to $21.3 million as of June 30, 2026, from $9.3 million as of December 31, 2025.

Raised full-year 2026 revenue outlook to between $410 million and $420 million, an 11% increase from previous guidance.
Raised full-year 2026 Adjusted EBITDA outlook to between $85 million and $95 million, a 13% increase from previous guidance.
Full-year 2026 total capital expenditures are expected to be between $490 million and $510 million, excluding acquisitions.
The Company projects annualized revenue exceeding $700 million and annualized Adjusted EBITDA above $260 million exiting 2027.
The 2027 projection assumes annual variable revenue from WHS contract awards of approximately $30 million, above committed minimums, and assumes no contribution from the commercial pipeline.
Revenue and Adjusted EBITDA growth are expected to continue through 2026 and into 2027 as WHS contracts ramp and new communities complete build-outs.

Workforce Hospitality Solutions (WHS): Revenue was $36.3 million with Adjusted Gross Profit of $19.4 million. Average utilized WHS beds surpassed 4,000 during the quarter. This segment is expected to be the Company's largest operating segment for full year 2026.
Hospitality & Facilities Services - South: Revenue decreased to $32.6 million from $36.2 million in the prior year, driven by lower utilization (70% vs 76%), partially offset by an increase in Average Daily Rate (ADR) to $72.36 from $69.62. Adjusted Gross Profit was $7.4 million.
Government: Revenue increased to $13.5 million from $7.5 million, and Adjusted Gross Profit turned positive at $6.4 million compared to a loss of $1.1 million in the prior year, driven by the reactivation of the Dilley Community.
All Other: Revenue was $3.0 million compared to $2.9 million in the prior year.
Since January 2026, the Company secured over $1.4 billion in multi-year contract awards representing over 9,000 contracted beds in the WHS segment.
The Target Hyper/Scale platform supports an active growth pipeline exceeding 20,000 beds of potential opportunities.

Demand is accelerating across AI-driven data center and large-scale power generation infrastructure development.
The Company views itself as being in the early stages of a multi-decade investment cycle spanning data centers, power generation, and critical infrastructure.
The Company's vertically integrated model and ability to redeploy assets across customers and geographies provide a competitive advantage in maximizing asset utilization and capital efficiency.
Advanced discussions are ongoing across diverse geographic regions to support demand for data center, power generation, and other critical infrastructure.

The Company expects to incur transitional costs related to ongoing network optimization initiatives in the Government segment over the balance of 2026, which may temporarily impact segment operating margins.
Forward-looking statements involve risks including operational, economic, political, and regulatory uncertainties; construction execution and permitting risks; labor availability; and changes in customer capital spending or project schedules.
Risks also include potential contract terminations for convenience, reliance on third-party suppliers, and exposure to cybersecurity threats or liquidity constraints.

Brad Archer, President and CEO, stated that results demonstrate the ability to execute at scale while responding to accelerating customer demand.
Management highlighted that the new $660 million credit facility provides substantial financial flexibility to pursue the deepest commercial growth pipeline in the Company's history.
The tone is confident regarding the scalability of the Target Hyper/Scale platform and the strength of the vertically integrated model in capitalizing on a multi-decade secular demand cycle.

On July 24, 2026, the Company closed a new $660 million asset-based revolving credit facility, replacing the prior $175 million facility.
The new credit facility reduces borrowing costs by up to 250 basis points and matures in July 2031.
Significant growth in advance payments from customers associated with recent WHS contract awards drove year-to-date cash flow generation.
The Company has more than 9,000 WHS beds contracted since January 2026 and active discussions representing additional potential growth opportunities exceeding 20,000 beds.
A conference call to discuss results was scheduled for August 10, 2026, at 8:00 a.m. Central Time.