Target Hospitality Announces 2025 Results Highlighting Significant Advancement of Strategic Growth Initiatives as Expanding Customer Demand Accelerates Momentum

Press Release

Announces new $23 million, 400-bed, multi-year committed revenue contract supporting the development of essential natural gas power generation capacity near Pecos, Texas (“Pecos Power Community”)

Supporting over $740 million of multi-year contracts announced since February 2025, focused on diversified and high-value strategic WHS markets

THE WOODLANDS, Texas, March 11, 2026  — 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 fourth quarter and year ended December 31, 2025.

Financial Highlights for the year ended December 31, 2025

• Revenue of $320.6 million.
• Net loss of ($37.1) million.
• Basic and diluted loss per share of $0.37.
• Adjusted EBITDA⁽¹⁾ of $53.2 million.
• Net Cash Provided by Operating Activities of $74 million and Discretionary Cash Flow⁽¹⁾ (“DCF”) of $66 million.
• Approximately $183 million of total available liquidity, with zero net debt as of December 31, 2025.

Operational Achievements and Accelerating Momentum on Strategic Growth Initiatives

Including the West Texas Power Community and Pecos Power Community contracts, Target has secured over $740 million in multi-year contracts since February 2025, with over $495 million tied to reactivating over 2,850 available beds supporting the rapidly expanding Workforce Hospitality Solutions (WHS) segment.

• Today announced a multi-year lease and services agreement, awarded in March 2026, with a minimum contract value of $129 million to provide workforce accommodations for a multi-gigawatt power plant supporting Hyperscale AI data center development (“West Texas Power Community”).
• Today announced a multi-year lease and service agreement, awarded in March 2026, with a minimum contract value of $23 million to provide workforce accommodations supporting a natural gas power plant development near Pecos, Texas (“Pecos Power Community”).
• Expanded multi-year workforce hub contract, now expected to generate approximately $175 million of revenue through 2027, reflecting a 25% increase from the original contract value, supporting a North American critical mineral supply chain (“Workforce Hub Contract” or “Workforce Hub”).
• Secured 5-year $246 million contract award, reopening the 2,400-bed community located in Dilley, Texas (“Dilley Contract”).
• Awarded a multi-year $35 million power community contract supporting essential power generation capacity for data center and critical mineral development in Northern Nevada (the “Power Community Contract”).
• Expanded the multi-year data center contract supporting AI infrastructure development (“Data Center Community”), now expected to generate approximately $134 million of committed minimum revenue through May 2028 (“Data Center Community Contract”).
• Advancing discussions on multiple potential opportunities aligned with accelerating demand for AI-driven infrastructure and large-scale power generation development.
• Target Hyper/Scale, focused on highly customizable solutions for the rapidly expanding WHS segment, continues to resonate with prospective customers and supports an active growth pipeline exceeding 20,000 beds.

Executive Commentary

“During 2025 we executed on a clear mandate to advance our strategic agenda—broadening our contract portfolio and accelerating expansion into high-growth end markets. Through disciplined execution, we secured more than $740 million in new multiyear awards since February 2025, underscoring strong demand for our capabilities and validating our entry into high‑value strategic markets,” stated Brad Archer, President and Chief Executive Officer.

“Our momentum reflects a historic investment cycle across U.S. AI infrastructure, critical minerals, and power‑generation development. With our integrated platform and differentiated services — including Target Hyper/Scale — we have established a core strategic growth vertical and positioned Target as a well-capitalized, essential solutions provider in these rapidly expanding sectors.  As demand accelerates and our pipeline deepens, Target is operating from a position of increasing strength. We believe we are at an inflection point and remain focused on sustaining this trajectory and creating long‑term value,” concluded Mr. Archer.

Financial Results

Full Year Summary Highlights

Refer to exhibits to this earnings release for definitions and reconciliation of Non-GAAP financial measures to GAAP financial measures

For the Years Ended ($ in ‘000s, except per share amounts) – (unaudited)		December 31, 2025			December 31, 2024
Revenue		$	320,635		$	386,272
Net income (loss)		$	(37,077)		$	71,407
Income (loss) per share – basic		$	(0.37)		$	0.71
Income (loss) per share – diluted		$	(0.37)		$	0.70
Adjusted EBITDA		$	53,166		$	196,717
Average utilized beds			8,466			13,362
Utilization			51	%		83	%

Revenue was $320.6 million for the year ended December 31, 2025, compared to $386.3 million for the same period in 2024.

Net income (loss) was ($37.1) million for the year ended December 31, 2025, compared to $71.4 million for the same period in 2024.

Adjusted EBITDA⁽¹⁾ was $53.2 million for the year ended December 31, 2025, compared to $196.7 million for the same period in 2024.

The year-over-year decreases were primarily driven by the termination of the Pecos Children’s Center Contract (“PCC Contract”) effective February 21, 2025. The impact from this termination was partially offset by strong performance from the Company’s expanding WHS segment, supported by the Workforce Hub Contract award, as well as the Dilley Contract award in the government segment.  Target anticipates meaningful margin improvement through 2026 as recently awarded WHS contracts continue to scale and following the completion of the Dilley Contract ramp-up phases in 2025.

Fourth Quarter Summary Highlights

For the Three Months Ended ($ in ‘000s, except per share amounts) – (unaudited)		December 31, 2025			December 31, 2024
Revenue		$	89,777		$	83,688
Net income (loss)		$	(14,943)		$	12,544
Income (loss) per share – basic		$	(0.15)		$	0.13
Income (loss) per share – diluted		$	(0.15)		$	0.12
Adjusted EBITDA(1)		$	6,544		$	41,147
Average utilized beds			8,394			11,911
Utilization			50	%		73	%

Revenue was $89.8 million for the three months ended December 31, 2025, compared to $83.7 million for the same period in 2024.

The increase in revenue was primarily driven by the Workforce Hub Contract and the Dilley Contract award, partially offset by the termination of the PCC Contract effective February 21, 2025.

Net income (loss) was ($14.9) million for the three months ended December 31, 2025, compared to $12.5 million for the same period in 2024.

Adjusted EBITDA⁽¹⁾ was $6.5 million for the three months ended December 31, 2025, compared to $41.1 million for the same period in 2024.

The decreases in net income (loss) and Adjusted EBITDA primarily reflect higher operating expenses associated with construction services activity under the Workforce Hub Contract and the termination of the historically higher-margin PCC Contract.  The Company anticipates meaningful margin improvement in 2026 as the Workforce Hub Contract transitions to higher-margin, service-focused revenue, recently awarded WHS segment contracts continue to scale, and following the completion of the Dilley Contract ramp-up phases in 2025.

Capital Management

The Company had approximately $72.7 million of capital expenditures for the year ended December 31, 2025, primarily related to growth in the Company’s WHS segment, including the Workforce Hub Contract and activity associated with the development and expansion of the Data Center Community.

As of December 31, 2025, the Company had approximately $8 million of cash and cash equivalents and no outstanding borrowings on the Company’s $175 million credit facility, total available liquidity of approximately $183 million, and zero net debt.

Business Update and Full Year 2026 Outlook

In 2025, Target consistently advanced its strategic growth initiatives, reinforcing the importance of the Company’s vertically integrated accommodations platform and its unique ability to provide critical hospitality solutions across a variety of end markets and geographies.  This strong momentum has supported over $740 million in multi-year contract awards since February 2025, with over $495 million in contracts supporting Target’s rapidly expanding WHS segment.  Additionally, the rapid expansion of this segment has facilitated the reactivation of more than 2,850 existing Target beds.

The continued growth of Target’s WHS segment highlights the strength of the Company’s integrated operating model and its ability to scale rapidly with accelerating customer demand. This scalability has supported a 25% increase in the Workforce Hub Contract and more than a 210% increase in the Data Center Community Contract relative to their original contract values.

These contracts are expected to benefit from enhanced margin contribution through 2026, as the Workforce Hub Contract transitions to more service-focused, higher-margin revenue and the Data Center Community Contract benefits from increasing scale and improved operational efficiencies.

West Texas Power Community and Pecos Power Community

Target’s WHS segment continues to accelerate the Company’s shift toward a higher‑growth, diversified portfolio serving critical minerals, AI‑driven data center development, and large‑scale power projects. The Hyper/Scale platform remains a key differentiator, supporting continued wins such as the newly awarded West Texas Power Community and Pecos Power Community contracts.  Combined, these newly awarded contracts immediately reactivate more than 1,800 beds of the Company’s existing West Texas assets and represent over $150 million in multi-year contract awards in one month.

The West Texas Power Community leverages existing infrastructure, requiring only $2–$5 million of incremental capital to support approximately 1,400 individuals.  This rapid deployment capability enables immediate customer utilization under the 47-month contract beginning March 2026, delivering attractive returns with minimal investment.

The Pecos Power Community, located in Pecos, Texas, leverages Target’s existing assets, requiring only $2-$3 million of investment to support up to 400 individuals.  The 26-month contract, beginning April 2026, highlights Target’s ability to quickly deploy readily available assets to meet customer demand.

Collectively, these WHS contract additions meaningfully upgrade Target’s contract portfolio, enhance long‑term revenue visibility, and position Target to benefit from the significant U.S. capital investment cycle underway across strategic high-growth end markets.

Together, these elements have created the most active growth pipeline in Target’s history. Rapidly expanding market demand is being driven by an unprecedented global capital investment cycle aimed at scaling large, increasingly remote data center and related infrastructure projects. These strong market fundamentals support Target’s evaluation of opportunities exceeding 20,000 beds and underscore the essential role of the Company’s workforce accommodations platform across multiple end markets and geographies.

Target has made significant advancements in its strategic growth initiatives, focused on enhancing revenue visibility, supporting consistent cash flows, and strengthening margin contribution.  The Company is well-positioned to execute on its recent contract awards, driven by significant growth in its WHS segment, while simultaneously advancing its strategic objectives and capitalizing on a strong development pipeline.  This foundation supports the Company’s 2026 outlook of:

Full Year 2026 Financial Outlook:

• Total revenue between $320 and $330 million
• Adjusted EBITDA⁽¹⁾ between $60 and $70 million
• Total Capital Expenditures between $65 and $75 million, excluding acquisitions

Total capital expenditures are focused on continued growth in the Company’s WHS segment, including approximately $38 million to $49 million in net committed capital required to execute the Data Center Community expansions, Power Community contract, and other recently announced WHS contract awards.

Segment Results – Fourth Quarter 2025

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)		December 31, 2025			December 31, 2024
Revenue		$	33,900		$	36,733
Adjusted gross profit(1)		$	8,451		$	12,581
Average daily rate (ADR)		$	71.07		$	72.14
Average utilized beds			5,125			5,474
Utilization			69	%		73	%

Revenue and adjusted gross profit for the three months ended December 31, 2025, were $33.9 million and $8.5 million, respectively.  The year-over-year declines were driven by lower ADR and reduced utilization, with higher operating costs compressing adjusted gross profit.

Target continues to evaluate optimization opportunities across its network, including HFS – South communities, while actively identifying operational efficiencies and additional ways to enhance margin contribution in a competitive market.

Workforce Hospitality Solutions

Refer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures

Revenue for the three months ended December 31, 2025, was $39.7 million, with adjusted gross profit of $9.1 million.

The increases were driven by construction services activity associated with the multi‑year Workforce Hub Contract, underscoring continued execution against key strategic growth initiatives. The Company expects margin expansion across this segment in 2026 as the Workforce Hub Contract shifts to higher‑margin, service‑focused revenue, with additional uplift anticipated from the Data Center Community, Power Community, and other recently announced WHS contracts as these assets scale and benefit from strong unit economics.

Target’s growth pipeline is supported by sustained demand across its Workforce Hospitality Solutions segment, fueled by ongoing U.S. investment in large‑scale technology and power‑generation infrastructure. This momentum supports a pipeline of more than 20,000 beds—the most active expansion cycle in the Company’s history—and is expected to drive meaningful segment growth over the coming years.

Government

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) – (unaudited)		December 31, 2025			December 31, 2024
Revenue		$	13,661		$	43,702
Adjusted gross profit(1)		$	5,404		$	37,712

Revenue for the three months ended December 31, 2025, was $13.7 million compared to $43.7 million for the same period in 2024. Adjusted gross profit for the period was $5.4 million compared to $37.7 million for the same period in 2024.

The decreases were primarily driven by the termination of the PCC Contract, partially offset by the Dilley Contract award.

All Other

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) – (unaudited)		December 31, 2025			December 31, 2024
Revenue		$	2,507		$	3,253
Adjusted gross profit(1)		$	(321)		$	259

This category of operating segments consists of hospitality services revenue not included in other segments. Revenue for the three months ended December 31, 2025, was $2.5 million compared to $3.3 million for the same period in 2024.

Conference Call

The Company has scheduled a conference call for March 11, 2026, at 8:00 a.m. Central Time (9:00 am Eastern Time) to discuss the fourth quarter and full year 2025 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/4teFk9a

Or the traditional, operator assisted dial-in below.

Domestic:                    1-800-836-8184

Please register for the webcast or dial into the conference call approximately 15 minutes prior to the scheduled start time.

About Target Hospitality

Target Hospitality is one of North America’s largest providers of vertically integrated modular accommodations and value-added hospitality services in the United States. Target builds, owns and operates a customized and growing network of communities for a range of end users through a full suite of value-added solutions including premium food service management, concierge, laundry, logistics, security and recreational facilities services.

IBF4