Target Hospitality Corp. announced a multi‑year lease and services agreement to build and operate a data‑center campus in North Texas for a top‑five hyperscaler. The deal commits the hyperscaler to more than $550 million in minimum revenue over the first five years, with optional two‑year extensions that could extend the relationship through 2035.
Target will deploy a large portion of its existing asset base and add new tailored assets, requiring a net capital investment of $115‑$125 million, about 80 % of which is expected to be incurred in 2026. Construction will begin immediately, with first occupancy slated for Q3 2026 and full completion in Q2 2027. The campus will accommodate roughly 4,000 individuals and is designed to support the hyperscaler’s AI infrastructure buildout, positioning Target as a key partner in the $7 trillion AI infrastructure cycle.
The contract is a significant win for Target, which reported Q4 2025 revenue of $89.8 million and a net loss of $6.5 million. Full‑year 2025 revenue was $320.6 million with a net loss of $37.1 million. The Workforce Hospitality Solutions (WHS) segment delivered $96.8 million, or 30 % of revenue, in 2025. The new data‑center deal is expected to raise 2026 revenue to $360‑$370 million and adjusted EBITDA to $70‑$80 million, with annualized revenue projected to exceed $500 million and adjusted EBITDA above $160 million by mid‑2027.
Brad Archer, President and Chief Executive Officer, said, "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." He added, "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."
Jason Vlacich, Chief Financial Officer, noted that the WHS contract mix has temporarily compressed margins due to lower‑margin revenue streams and elevated initial operating and mobilization costs. He added, "As the Workforce Hub contract transitions to higher‑margin services‑based revenue and our new WHS awards continue to scale through 2026, we expect consistent and sustained margin expansion." The data‑center win is expected to accelerate margin recovery as the company shifts from construction‑heavy, lower‑margin work to higher‑margin services and long‑term lease revenue.
The deal expands Target’s Workforce Hospitality Solutions segment beyond government contracts into high‑margin data‑center services, reinforcing its strategy to diversify revenue streams and leverage its owned‑asset model for rapid deployment across new markets. By securing a long‑term, high‑value contract with a hyperscaler, Target positions itself to capture a share of the growing AI infrastructure market and to build a pipeline of similar high‑margin projects that can drive revenue and profitability growth in the coming years.
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