Target Hospitality Corp, one of North America’s providers of vertically integrated modular accommodations and value-added hospitality services, announced a multi-year lease and services agreement (“Data Center Hub Contract” or “Contract”) to construct and provide comprehensive facility and hospitality services to a top-five hyperscaler and their development of a data center campus in North Texas (“Data Center Hub” or the “Community”).
Target will construct and deliver full‑turnkey support for the data center hub, providing highly customized solutions and elevated hospitality service offerings. The purpose‑built, all‑inclusive community will be designed to accommodate approximately 4,000 individuals. Construction will begin immediately, with first occupancy expected in the third quarter of 2026 and full completion of the data center hub anticipated in the second quarter of 2027.
The data center hub contract is expected to provide over $550 million in committed minimum revenue over its initial term of approximately five years, through the first quarter of 2031. The contract also includes two additional two-year extension options, enabling continuity of services through January 2035. In addition to the committed minimum revenue, the contract provides potential variable revenue of approximately $20 million to $40 million annually, depending on customer occupancy once the community is fully constructed.
Target will leverage a significant portion of its existing assets to construct the data center hub, supplemented by new assets tailored to meet the customer’s specifications. This combined approach results in an expected net capital investment of approximately $115 to $125 million, with approximately 80% of this capital investment expected to be incurred in 2026.
“This contract underscores the strength of our Hyper/Scale platform and our unmatched ability to deliver large‑scale, highly customized solutions for our customers. Target is now firmly positioned as a well‑capitalized and trusted partner in the unprecedented capital investment cycle underway across AI infrastructure, critical minerals, and power generation development. The momentum we have established continues to strengthen our growth pipeline, including advanced discussions on additional potential opportunities supporting data center and related infrastructure development. We are at an inflection point, and we remain focused on sustaining this momentum to create long‑term value,” stated Brad Archer, president and chief executive officer.
The data center hub contract further validates Target’s vertically integrated operating model and its focus on expanding into high-growth end markets. Growth within Target’s workforce hospitality solutions segment has meaningfully diversified the company’s revenue mix and strengthened contract portfolio, enhancing revenue visibility, supporting consistent cash flows and driving improved margin contributions—key elements of Target’s strategic growth initiatives. Reflecting the significance and expected full-year contributions of the data center hub contract, the company is increasing its 2026 outlook to:
Full Year 2026 Financial Outlook:
- Total revenue between $360 and $370 million
- Adjusted EBITDA between $70 and $80 million
- Total capital expenditures between $220 and $240 million, excluding acquisitions
Total capital expenditures are focused on continued growth in the company’s WHS segment, including approximately $130 to $140 million in net committed capital required to execute recently announced WHS contract awards and expansions, including the data center hub.
As recent WHS contract awards come online and scale through 2026, along with the build‑out and completion of the data center hub by mid‑2027, the company expects revenue and adjusted EBITDA to build through 2026 and into 2027. Target’s expanding operational scale and strong unit economics are also anticipated to support margin improvement over this period. Together, these factors position the company to achieve annualized revenue exceeding $500 million and annualized Adjusted EBITDA above $160 million by mid-2027. This projection assumes annual variable revenue from the data center hub contract reaches the midpoint of its potential range, above the committed minimum.
