Target Hospitality (TH) today announced the second 400-bed community expansion

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 announced the second 400-bed community expansion ("Second Expansion") to the previously announced 250-bed data center community. The pace of this community's expansions underscores the strong industry momentum and reinforces both the importance of Target's workforce accommodations platform and the Company's focus on growing its presence in supporting AI infrastructure development.

With the Second Expansion, this highly customized and purpose-built campus will be capable of supporting up to 1,050 individuals (the "Expanded Data Center Community"), representing a 320% increase from the initial 250-bed community. As a reminder, this Expanded Data Center Community can grow to support up to 1,500 individuals.

The Second Expansion is expected to provide approximately $49 million of committed minimum revenue over its initial two-year term beginning June 2026 through May 2028 (the "Second Expansion Contract"). Additionally, the Second Expansion Contract includes four one-year extension options, enabling continuity of services through May 2032.

The Second Expansion Contract increases total committed minimum revenue for the Expanded Data Center Community to more than $130 million - over three times the initial $43 million contract value. This incremental scale is expected to enhance margin contribution by enabling the Company to capture greater efficiencies from its fully integrated operating model and strong unit economics.

Target has begun construction activity of the Second Expansion and anticipates a net capital investment of approximately $15 to $18 million, with completion by June 2026.

This expansion reflects accelerating demand for customized workforce accommodations essential to AI and data center development. Target's vertically integrated platform positions the Company as a leading provider of these critical solutions and reinforces a core strategic growth vertical. It also supports ongoing discussions around additional potential commercial opportunities, including the growing demand for large-scale power-generation capabilities critical to technology infrastructure development.

"Target's rapid response to customer demand underscores the strength of our Hyper/Scale brand and speed-to-market execution across the data center value chain. Our scalable communities align with accelerating development timelines, reinforcing Target as a trusted provider of essential workforce accommodations. Backed by strong industry momentum, we are well-positioned to accelerate our next phase of strategic growth," stated Brad Archer, President and Chief Executive Officer.

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