Target Hospitality Announces Third Quarter 2025 Results with Continued Execution on Strategic Growth Initiatives and Expanding End-Market Demand

Press Release

November 06, 2025

THE WOODLANDS, Texas, Nov. 6, 2025 — 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 September 30, 2025.

Financial Highlights for the Third Quarter 2025

• Revenue of $99.4 million.
• Net loss of ($0.8) million.
• Basic and diluted loss per share of $0.01.
• Adjusted EBITDA⁽¹⁾ of $21.5 million.
• Net Cash Provided by Operating Activities of $68.4 million and Discretionary Cash Flow⁽¹⁾ (“DCF”) of $61.3 million for the nine months ended September 30, 2025.
• Approximately $205 million of total available liquidity, with zero net debt as of September 30, 2025.

2025 Operational Achievements

Target has announced over $455 million in multi-year contracts in 2025, supporting diverse end-markets and making substantial progress toward achieving key strategic initiatives.

• Expanded multi-year workforce hub contract with community enhancements and contract modifications, now expected to generate approximately $166 million of revenue through 2027, reflecting a 19% increase from the original contract value, supporting a North American critical mineral supply chain (“Workforce Hub Contract” or “Workforce Hub”).
• Announced 5-year $246 million contract award, reactivating strategically located South Texas assets in Dilley, Texas, supporting critical U.S. government initiatives (“Dilley Contract”), and completed the planned ramp-up phase to the 2,400-bed community on time in September 2025.
• Entered the rapidly expanding AI and data center end-market with a multi-year $43 million lease and services agreement (“Data Center Community Contract”) and completed the construction and mobilization of the initial 250-bed community (“Data Center Community”).

Target continues to pursue a growing pipeline of growth opportunities supported by expanding end-market demand.

• Finalizing the first Data Center Community expansion to meet the increased pace in customer activity levels.
• Growing end-market demand for specialized hospitality solutions supporting the expansion of North American power generation capabilities, vital to the data center infrastructure build-out.
• Launched Target Hyper/Scale, a unique brand focused on highly customizable solutions supporting the rapidly expanding AI and data center end-market.

Executive Commentary

“We continue to build on the progress we have made toward key strategic growth initiatives, focusing on expanding and diversifying Target’s business portfolio. Since the second quarter of 2025, we have added over $55 million in multi-year committed revenue contracts, bringing the total value of new multi-year contract awards announced in 2025 to over $455 million,” stated Brad Archer, President and Chief Executive Officer.

“These contracts demonstrate the reach of Target’s unique service offerings across diverse end markets and exemplify our ability to provide tailored solutions that meet our customers’ specific needs. Market fundamentals continue to strengthen, driven by an unprecedented surge in AI infrastructure and critical mineral capital investment, along with ongoing demand from the government sector. Our speed-to-market solutions and innovative offerings, such as Target Hyper/Scale, are positioning us as an essential partner across a rapidly expanding marketplace. With this positive environment and strong secular tailwinds, we are committed to sustaining this momentum as we pursue an expanding growth pipeline aimed at further advancing our strategic initiatives,” concluded Mr. Archer.

Financial Results

Third Quarter Summary Highlights

For the Three Months Ended ($ in ‘000s, except per share amounts) – (unaudited)		September 30, 2025			September 30, 2024
Revenue		$	99,355		$	95,191
Net income (loss)		$	(757)		$	20,094
Income (loss) per share – basic		$	(0.01)		$	0.20
Income (loss) per share – diluted		$	(0.01)		$	0.20
Adjusted EBITDA(1)		$	21,549		$	49,705
Average utilized beds			8,112			13,138
Utilization			49	%		81	%

Revenue was $99.4 million for the three months ended September 30, 2025, compared to $95.2 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 Pecos Children’s Center Contract (“PCC Contract”) effective February 21, 2025.  Revenue for the three months ended September 30, 2025, also included a payment of approximately $11.8 million received during the three months ended September 30, 2025, associated with the termination of the PCC Contract for reimbursement of certain costs incurred following the PCC Contract termination (“PCC Contract Close-Out Payment”).  No further payments are expected from the PCC Contract.

Net income (loss) was $(0.8) million for the three months ended September 30, 2025, compared to $20.1 million for the same period in 2024.

Adjusted EBITDA⁽¹⁾ was $21.5 million for the three months ended September 30, 2025, compared to $49.7 million for the same period in 2024.

The decreases in net income (loss) and Adjusted EBITDA were primarily attributable to higher operating expenses associated with construction services activity under the Workforce Hub Contract and the termination of the PCC Contract.

Capital Management

The Company had approximately $29.0 million of capital expenditures for the three months ended September 30, 2025, primarily related to construction activity associated with the Data Center Community Contract.

As of September 30, 2025, the Company had approximately $30 million of cash and cash equivalents and no outstanding borrowings on the Company’s $175 million credit facility, total available liquidity of approximately $205 million, and zero net debt.

Business Update and Full Year 2025 Outlook

Target continues to build on positive momentum toward achieving key strategic growth initiatives, which have supported over $455 million in new multi-year contract awards in 2025. These contracts demonstrate Target’s ability to deliver customized and tailored solutions to meet a variety of unique customer demands across diverse end markets.

Workforce Hospitality Solutions (“WHS”) Segment

Target’s WHS segment continues to grow, driven by increases in domestic critical mineral development and a significant rise in data center infrastructure projects. In 2025, Target has secured over $205 million in multi-year contracts within this segment, including approximately $26 million from contract expansions as customers increasingly recognize the benefits of Target’s capabilities and customizable solutions.

These capabilities have enabled multiple scope expansions and community enhancements to the Workforce Hub Contract, which is now expected to generate approximately $166 million in revenue through 2027, reflecting a 19% increase from the original contract value. As a reminder, this contract includes both construction and services revenue, and the additional construction activity will shift a portion of the services revenue into 2026.

Target is pleased with the progress of the Data Center Community Contract announced in August of this year. The Company’s operational agility supported the expedited completion of the initial 250-bed community, resulting in the first community occupancy ahead of schedule. These capabilities highlight Target’s value proposition and ability to scale communities to meet dynamic customer demands.

The increasing pace of customer activity at the Data Center Community has led to advanced discussions to finalize the community’s first expansion. As previously announced, this community could expand to accommodate up to 1,500 individuals. Additionally, the Data Center Community Contract includes four one-year extension options after the initial two-year term, enabling a seamless contract extension through September 2031.

The growth of the Data Center Community underscores the rising momentum in AI infrastructure development and the urgent need for vertically integrated hospitality solutions to support the expansion of data center capacity. This rapidly increasing market demand is backed by an estimated $7 trillion in global capital investments required to scale these large and increasingly remote data center projects. This ongoing momentum drives the most active and robust growth pipeline Target has seen in years. The Company believes it is well-positioned, with a proven track record of enabling speed-to-market solutions, which are essential in this AI and data center value chain.

Aligned with Target’s unique capabilities and highly customizable solutions in supporting this specialized data center end market, Target has launched its Target Hyper/Scale brand. This focused initiative showcases Target’s distinctive ability to build communities that enable quick time-to-market solutions capable of rapidly scaling alongside customers’ dynamic workforce housing requirements.

Government Segment

In the Government segment, Target’s proven ability to provide critical infrastructure solutions to the U.S. government supported the five-year, $246 million Dilley Contract. The community completed the planned ramp-up on schedule in September 2025 and is now fully operational, capable of supporting up to 2,400 individuals. The successful reopening of this community demonstrates Target’s versatile capabilities and uniquely positions the Company to meet the ongoing demand for these essential services from the U.S. government.

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