By Elias Schisgall

Target Hospitality raised its outlook after receiving a multiyear contract worth at least $550 million to provide facility and hospitality services for a data-center construction project in North Texas.

Shares were up 22% to $11.28 in premarket trading on Wednesday. The stock closed Tuesday at $9.28, up 16% year to date.

Target Hospitality now sees full-year revenue between $360 million and $370 million, with adjusted earnings before interest, taxes, depreciation, and amortization expected between $70 million and $80 million. The company had previously guided for revenue of between $320 million and $330 million and adjusted Ebitda between $60 million and $70 million.

By mid-2027 annualized revenue is expected to exceed $500 million, with annualized adjusted Ebitda seen above $160 million, assuming revenue from the new contract falls at the midpoint of its potential range, above the committed minimum, the company said.

Through the contract, Target Hospitality is slated to construct purpose-built, all-inclusive accommodations for about 4,000 people, with construction to begin immediately and first occupancy expected in the first quarter.

The contract has an initial term of about five years with more than $550 million of minimum committed revenue, the company said. It also provides potential variable revenue between about $20 million and $40 million a year depending on occupancy. The contract has two additional two-year extension options, the company said.

Target Hospitality did not disclose the company building the data center, describing it only as a "top-five hyperscaler."

The company said it would "leverage a significant portion of its existing assets to construct the data center hub," which is expected to require net capital investment of about $115 million to $125 million, with about 80% of the investment expected to take place this year.

Target Hospitality raised its 2026 capital-expenditure outlook to between $220 million and $240 million, up from a previous range of $65 million to $75 million.

Write to Elias Schisgall at elias.schisgall@wsj.com

(END) Dow Jones Newswires

April 01, 2026 07:21 ET (11:21 GMT)

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