Target Hospitality (TH) investor relations material

Executive summary

• Secured over $1.4 billion in multi-year WHS contract awards since January 2026, supporting over 9,000 individuals and driving strong Q2 results, improved profitability, and robust cash generation.

• Q2 2026 revenue increased 39% year-over-year to $85.5 million, with Adjusted EBITDA up 420% to $18.2 million, driven by WHS segment growth and new contracts.

• Net loss for Q2 2026 improved to $9.0 million, or $0.09 per share, reflecting higher revenue and improved margins.

• Cash flows from operations for H1 2026 were $111.0 million, up from $15.0 million in H1 2025, due to increased customer advance payments and lower interest costs.

• Liquidity was enhanced by a new $660 million revolving credit facility, reducing borrowing costs and supporting growth.

Financial highlights

• Q2 2026 revenue: $85.5 million (+39% YoY); Adjusted EBITDA: $18.2 million (+420% YoY); net loss: $9.0 million, improved from $14.9 million in Q2 2025.

• Year-to-date net cash provided by operating activities: $111.0 million; capital expenditures for Q2 2026: $131.9 million, mainly for WHS growth.

• Total available liquidity: $141 million; net leverage ratio: 0.6x as of June 30, 2026.

• Adjusted gross profit for Q2 2026: $33.2 million; gross margin: 18.5%; utilization rate: 67%.

• Average utilized beds: 11,760 in Q2 2026, up from 7,482 in Q2 2025.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $410–$420 million; Adjusted EBITDA guidance raised to $85–$95 million.

• Capital expenditures expected at $490–$510 million, excluding acquisitions, largely for AI infrastructure projects.

• Projected annualized revenue above $700 million and Adjusted EBITDA over $260 million exiting 2027, based on existing contracts.

• Net leverage expected to temporarily rise but decline below 3x by end of 2027 as communities ramp.

• Margins expected to improve through 2026, driven by ramp-up of new WHS contracts.