Target Hospitality Secures $550 Million Data Center Contract, Shares Surge 25%

Target Hospitality Corp. (NASDAQ:TH) announced a multi-year agreement valued over $550 million for a data center project in northern Texas. The contract, effective for an initial five years and extendable to January 2035, is expected to generate guaranteed revenue surpassing $550 million and an additional annual variable revenue of $20 million to $40 million based on occupancy levels.

Construction of a custom residential facility to accommodate about 4,000 people will begin immediately, with first residents expected by Q3 2026 and completion by Q2 2027. The project requires a net investment of $115 million to $125 million, with 80% of expenses anticipated in 2026.

Target Hospitality forecasts total revenues of $360 million to $370 million for 2026, with an adjusted EBITDA of $70 million to $80 million. The company aims for annualized revenue exceeding $500 million and adjusted EBITDA above $160 million by mid-2027, contingent on achieving mid-range variable revenue projections. This agreement signifies a strategic diversification for Target Hospitality beyond its traditional markets.