Target Hospitality Expects Revenue Run Rate to Exceed $750 Million Exiting 2027
Key Facts
Target Hospitality said on November 9, 2026, that it expects to exit 2027 with an annual revenue run rate exceeding $750 million and an annual adjusted EBITDA run rate exceeding $300 million. In its filing with the U.S. Securities and Exchange Commission, the company said both forecasts are based entirely on its existing contract portfolio. The guidance assumes no contribution from its pipeline of commercial opportunities, tying the stated targets to revenue from existing contracts rather than opportunities that have not yet become agreements. The announcement follows a jump in revenue and adjusted EBITDA in the third quarter, alongside the company’s expansion in the workforce solutions sector. The company also said the value of multi-year contracts it has secured since January exceeded $1.7 billion and represents more than 10,000 beds.
Target Hospitality’s revenue in the third quarter of 2026 was about $129.1 million, up 30% year over year and 51% from the previous quarter. Adjusted EBITDA rose 59% to $34.2 million, compared with $21.5 million in the same period of 2025. The adjusted EBITDA margin expanded by about 480 basis points to 27% of revenue. The company attributed the increases to growth in its workforce solutions sector and the completion of operational ramp-up phases related to the Dilley community contract in Texas. It said the margin improvement reflected a better revenue mix and greater operating efficiency as communities expanded. But the company posted a net loss of $9.2 million in the same quarter, or $0.09 per basic and diluted share.
The company’s average occupied beds rose to 13,879 in the third quarter of 2026, compared with 8,112 in the same period of 2025, while utilization increased to 77% from 49%. In the workforce solutions sector alone, average occupied beds exceeded 6,200 during the quarter, and the company said new communities were progressing through operational ramp-up phases. The pipeline of potential opportunities remains distinct from contracts already secured: it exceeded 25,000 beds, with some opportunities in advanced contract discussions. This figure represents a geographically diverse set of potential opportunities, not existing or contracted beds. Compared with the second-quarter announcement, when the pipeline exceeded 20,000 beds, the latest figure indicates a broader set of opportunities under consideration, without including them as contributors to the financial guidance.
The company expects revenue of between $435 million and $445 million in 2026, and adjusted EBITDA of between $105 million and $115 million. It also expects capital expenditures of between $490 million and $510 million, excluding acquisitions. Capital spending was about $246 million in the third quarter to support long-term workforce solutions contracts, and the company said customer advance payments funded part of it. These figures reflect investment ahead of the completion and expansion of community operations, while management said long-term contractual commitments provide revenue visibility. The company expects operating scale and unit economics to support margin expansion as sector contracts come online and expand during 2026 and 2027.
Management said near-term capital investment needed to expand communities will temporarily increase net leverage as sites open and begin operating. But it expects to exit 2027 with net leverage well below two times earnings, according to the chief financial officer on the earnings call. At the end of the third quarter, total liquidity was about $440 million, and the net leverage ratio was 1.4 times. The company had closed an asset-based revolving credit facility worth $660 million on July 24, saying it would increase financial flexibility and reduce borrowing costs by up to 250 basis points. Management of financing and spending is part of the expansion path ahead of the stated targets for exiting 2027.
Target Hospitality was scheduled to hold a call to discuss its third-quarter results on November 9, 2026, at 8:00 a.m. Central Time, or 9:00 a.m. Eastern Time. The company’s shares, listed under the ticker TH, closed at $11.36 on November 6, before the long-term guidance announcement. In the second quarter of 2026, the company raised its full-year revenue and adjusted EBITDA forecasts by 11% and 13%, respectively, after reporting revenue of $85.5 million and adjusted EBITDA of $18.2 million for that quarter. Those earlier results provide context for the acceleration recorded in the third quarter, while the new guidance remains limited to existing contracts. The next execution milestones will be converting awarded contracts into operating communities and expanding them during 2026 and 2027, while monitoring the investment’s effect on leverage.