Target Hospitality Raises Full-Year Outlook as Revenue Climbs 39%
The company increased its full-year revenue guidance by 11% to a range of $410 million to $420 million.
Target Hospitality (TH), the provider of workforce lodging and facilities services, reported second-quarter revenue of $85.5 million, a 39% increase from the $61.6 million recorded in the same period last year.
The result reflects a significant expansion in scale and operational efficiency, marked by a sharp rise in bed utilization. Average utilized beds grew to 11,760 from 7,482 in the prior-year quarter, while the utilization rate rose from 45% to 67%.
Adjusted EBITDA grew 420% year-over-year to $18.2 million, compared to $3.5 million in the second quarter of 2024. The company also narrowed its net loss to $9.0 million from a loss of $14.9 million in the prior-year period.
Growth was driven largely by the Workforce Hospitality Solutions segment, where revenue rose to $36.3 million from $15.0 million. Adjusted gross profit for the segment increased to $19.4 million from $3.7 million. The company has secured more than $1.4 billion in multi-year contract awards and over 9,000 contracted beds in this segment since January 2024.
Performance was mixed across other divisions. Government segment revenue increased to $13.5 million from $7.5 million, with adjusted gross profit swinging from a $1.1 million loss to a $6.4 million profit following the reactivation of the Dilley Community. Conversely, Hospitality & Facilities Services - South revenue declined to $32.6 million from $36.2 million as utilization fell to 70% from 76%, though the average daily rate rose to $72.36 from $69.62.
Target Hospitality raised its full-year 2024 revenue outlook by 11% to between $410 million and $420 million and increased its adjusted EBITDA outlook by 13% to a range of $85 million to $95 million.
The company improved its liquidity position by closing a $660 million asset-based revolving credit facility on July 24, 2024. This facility replaced a $175 million facility and reduced borrowing costs by up to 250 basis points.
Cash flow metrics showed substantial growth for the first half of the year. Net cash provided by operating activities reached $111.0 million and discretionary cash flow reached $108.2 million for the six months ended June 30, 2024, compared to $15.0 million and $9.3 million, respectively, for the same period in 2023.