Target Hospitality Corp 10-Q for FY2025 Q3

Target Hospitality Corp. (TH)

10-Q 2025-11-06 For: 2025-09-30

Added on April 12, 2026

About this 10-Q

Target Hospitality Corp filed this 10-Q on November 6, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).

Headline figures

Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $99.36M; up 4.4% from $95.19M a year earlier
Net loss: $795K; compared with net income of $19.99M a year earlier
Diluted EPS: -$0.01; compared with $0.20 a year earlier

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Delaware			98-1378631
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which is registered
Common stock, par value $0.0001 per share	TH	NASDAQ Capital Market


Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

PART I — FINANCIAL INFORMATION	5
Item 1. Financial Statements	5
Consolidated Balance Sheets	5
Unaudited Consolidated Statements of Comprehensive Income (Loss)	6
Unaudited Consolidated Statements of Changes in Stockholders’ Equity	7
Unaudited Consolidated Statements of Cash Flows	8
Notes to Unaudited Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3. Quantitative and Qualitative Disclosures About Market Risk	56
Item 4. Controls and Procedures	56
PART II — OTHER INFORMATION	56
Item 1. Legal Proceedings	56
Item 1A. Risk Factors	57
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3. Defaults upon Senior Securities	57
Item 4. Mine Safety Disclosures	57
Item 5. Other Information	57
Item 6. Exhibits	58
SIGNATURES	59

Consolidated Financial Statements

Consolidated Balance Sheets	5
Unaudited Consolidated Statements of Comprehensive Income (Loss)	6
Unaudited Consolidated Statements of Changes in Stockholders’ Equity	7
Unaudited Consolidated Statements of Cash Flows	8
Notes to Unaudited Consolidated Financial Statements	9


	September 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	30,387	$	190,668
Accounts receivable, less allowance for credit losses of $702 and $534, respectively		42,734		49,342
Prepaid expenses and other assets		6,323		9,326
Total current assets		79,444		249,336

Specialty rental assets, net		331,694		320,852
Other property, plant and equipment, net		36,324		34,935
Operating lease right-of-use assets, net		8,534		24,935
Goodwill		41,038		41,038
Other intangible assets, net		42,704		52,807
Deferred financing costs revolver, net		1,417		1,871
Total assets	$	541,155	$	725,774

Liabilities
Current liabilities:
Accounts payable	$	45,812	$	16,187
Accrued liabilities		17,542		25,782
Deferred revenue and customer deposits		9,434		699
Current portion of operating lease obligations		7,411		8,548
Current portion of finance lease and other financing obligations (Note 7)		2,221		1,860
Current portion of long-term debt, net (Note 7)		—		180,328
Total current liabilities		82,420		233,404

Other liabilities:
Long-term finance lease and other financing obligations		2,016		1,451
Long-term operating lease obligations		1,635		17,459
Deferred revenue and customer deposits		5,534		536
Deferred tax liability		44,643		49,271
Asset retirement obligations		2,661		2,563
Total liabilities		138,909		304,684

Commitments and contingencies (Note 11)
Stockholders' equity:
Common Stock, $0.0001 par, 400,000,000 authorized, 113,076,462 issued and 99,779,532 outstanding as of September 30, 2025 and 112,248,984 issued and 98,952,054 outstanding as of December 31, 2024.		10		10
Common Stock in treasury at cost, 13,296,930 shares as of September 30, 2025 and 13,296,930 shares as of December 31, 2024.		(57,304)		(57,304)
Additional paid-in-capital		152,272		148,780
Accumulated other comprehensive loss		(2,794)		(2,785)
Accumulated earnings		310,193		332,380
Total stockholders' equity attributable to Target Hospitality Corp. stockholders		402,377		421,081
Noncontrolling interest in consolidated subsidiaries		(131)		9
Total stockholders' equity		402,246		421,090
Total liabilities and stockholders' equity	$	541,155	$	725,774


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Revenue:
Services income	$	56,010	$	65,796	$	146,584	$	205,685
Specialty rental income		7,784		29,395		29,496		96,899
Construction fee income		35,561		—		54,778		—
Total revenue		99,355		95,191		230,858		302,584
Costs:
Services		64,051		31,262		145,380		101,734
Specialty rental		2,988		4,662		8,270		16,059
Depreciation of specialty rental assets		14,371		14,057		41,627		43,643
Gross profit		17,945		45,210		35,581		141,148
Selling, general and administrative		12,918		13,319		40,387		41,632
Other depreciation and amortization		4,093		3,902		12,148		11,695
Other expense (income), net		865		(2)		970		(158)
Operating income (loss)		69		27,991		(17,924)		87,979
Loss on extinguishment of debt		—		—		2,370		—
Interest expense, net		458		3,813		5,724		12,673
Change in fair value of warrant liabilities		—		—		—		(675)
Income (loss) before income tax		(389)		24,178		(26,018)		75,981
Income tax expense (benefit)		368		4,084		(3,884)		17,118
Net income (loss)		(757)		20,094		(22,134)		58,863
Less: Net income attributable to the noncontrolling interest		38		100		53		100
Net income (loss) attributable to Target Hospitality Corp. common stockholders		(795)		19,994		(22,187)		58,763

Other comprehensive loss
Foreign currency translation		(26)		(12)		(9)		(52)
Comprehensive income (loss)	$	(783)	$	20,082	$	(22,143)	$	58,811


Weighted average number shares outstanding - basic		99,778,834		100,438,559		99,431,460		100,452,691
Weighted average number shares outstanding - diluted		99,778,834		101,296,504		99,431,460		101,744,462

Net income (loss) per share attributable to Target Hospitality Corp. common stockholders - basic	$	(0.01)	$	0.20	$	(0.22)	$	0.58
Net income (loss) per share attributable to Target Hospitality Corp. common stockholders - diluted	$	(0.01)	$	0.20	$	(0.22)	$	0.58


							Additional		Accumulated				Total Target Hospitality Corp.
	Common Stock			Common Stock in Treasury			Paid In		Other		Accumulated		Stockholders'		Noncontrolling		Total
	Shares	Amount		Shares	Amount		Capital		Comprehensive Loss		Earnings		Equity		Interest		Equity
Balances at December 31, 2023	101,660,601	$	10	9,430,665	$	(23,559)	$	142,379	$	(2,638)	$	261,115	$	377,307	$	—	$	377,307
Net income	—		—	—		—		—		—		20,383		20,383		—		20,383
Stock-based compensation, net	658,659		—	—		—		1,579		—		—		1,579		—		1,579
Tax withholdings related to net share settlement of equity awards	—		—	—		—		(2,615)		—		—		(2,615)		—		(2,615)
Cumulative translation adjustment	—		—	—		—		—		(20)		—		(20)		—		(20)
Issuance of Common Stock from exercise of warrants	1,079		—	—		—		3		—		—		3		—		3
Issuance of Common Stock from exercise of stock options	59,524		—	—		—		268		—		—		268		—		268
Repurchase of Common Stock as part of share repurchase program	(2,274,440)		—	2,274,440		(21,371)		—		—		—		(21,371)		—		(21,371)
Balances at March 31, 2024	100,105,423	$	10	11,705,105	$	(44,930)	$	141,614	$	(2,658)	$	281,498	$	375,534	$	—	$	375,534

Net income	—		—	—		—		—		—		18,386		18,386		—		18,386
Stock-based compensation, net	44,329		—	—		—		1,612		—		—		1,612		—		1,612
Cumulative translation adjustment	—		—	—		—		—		(20)		—		(20)		—		(20)
Issuance of Common Stock from exercise of stock options	280,929		—	—		—		1,546		—		—		1,546		—		1,546
Repurchase of Common Stock as part of share repurchase program	—		—	—		108		—		—		—		108		—		108
Balances at June 30, 2024	100,430,681	$	10	11,705,105	$	(44,822)	$	144,772	$	(2,678)	$	299,884	$	397,166	$	—	$	397,166

Net income	—		—	—		—		—		—		19,994		19,994		100		20,094
Stock-based compensation, net	15,262		—	—		—		1,618		—		—		1,618		—		1,618
Tax withholdings related to net share settlement of equity awards	—		—	—		—		(47)		—		—		(47)		—		(47)
Cumulative translation adjustment	—		—	—		—		—		(12)		—		(12)		—		(12)
Issuance of Common Stock from exercise of stock options	7,936		—	—		—		36		—		—		36		—		36
Distributions	—		—	—		—		—		—		—		—		(65)		(65)
Repurchase of Common Stock as part of share repurchase program	(150,000)		—	150,000		(1,155)		—		—		—		(1,155)		—		(1,155)
Balances at September 30, 2024	100,303,879	$	10	11,855,105	$	(45,977)	$	146,379	$	(2,690)	$	319,878	$	417,600	$	35	$	417,635

Balances at December 31, 2024	98,952,054	$	10	13,296,930	$	(57,304)	$	148,780	$	(2,785)	$	332,380	$	421,081	$	9	$	421,090
Net loss	—		—	—		—		—		—		(6,461)		(6,461)		2		(6,459)
Stock-based compensation, net	412,662		—	—		—		1,672		—		—		1,672		—		1,672
Tax withholdings related to net share settlement of equity awards	—		—	—		—		(973)		—		—		(973)		—		(973)
Cumulative translation adjustment	—		—	—		—		—		(4)		—		(4)		—		(4)
Distributions	—		—	—		—		—		—		—		—		(58)		(58)
Balances at March 31. 2025	99,364,716	$	10	13,296,930	$	(57,304)	$	149,479	$	(2,789)	$	325,919	$	415,315	$	(47)	$	415,268

Net loss	—		—	—		—		—		—		(14,931)		(14,931)		13		(14,918)
Stock-based compensation, net	413,356		—	—		—		2,134		—		—		2,134		—		2,134
Tax withholdings related to net share settlement of equity awards	—		—	—		—		(1,263)		—		—		(1,263)		—		(1,263)
Cumulative translation adjustment	—		—	—		—		—		21		—		21		—		21
Distributions	—		—	—		—		—		—		—		—		(57)		(57)
Balances at June 30, 2025	99,778,072	$	10	13,296,930	$	(57,304)	$	150,350	$	(2,768)	$	310,988	$	401,276	$	(91)	$	401,185

Net loss	—		—	—		—		—		—		(795)		(795)		38		(757)
Stock-based compensation, net	1,460		—	—		—		1,927		—		—		1,927		—		1,927
Tax withholdings related to net share settlement of equity awards	—		—	—		—		(5)		—		—		(5)		—		(5)
Cumulative translation adjustment	—		—	—		—		—		(26)		—		(26)		—		(26)
Distributions	—		—	—		—		—		—		—		—		(78)		(78)
Balances at September 30, 2025	99,779,532	$	10	13,296,930	$	(57,304)	$	152,272	$	(2,794)	$	310,193	$	402,377	$	(131)	$	402,246


	For Nine Months Ended
	September 30,
	2025		2024
Balances at Beginning of the Period	$	1,235	$	5,469
Additions to deferred revenue		14,315		400
Revenue recognized		(582)		(4,933)
Balances at End of the Period	$	14,968	$	936


	For the Years Ended December 31,
	2025		2026		2027		2028		2029		Total
Revenue expected to be recognized as of September 30, 2025	$	47,382	$	30,453	$	23,169		15,461		15,426	$	131,891


	HFS - South
Balance at January 1, 2024	$	41,038
Changes in Goodwill		—
Balance at December 31, 2024		41,038
Changes in Goodwill		—
Balance at September 30, 2025	$	41,038


	September 30, 2025
	Weighted	Gross
	average	Carrying		Accumulated		Net Book
	remaining lives	Amount		Amortization		Value
Intangible assets subject to amortization
Customer relationships	2.2	$	133,105	$	(106,961)	$	26,144
Non-compete agreement	2.3		349		(189)		160
Total			133,454		(107,150)		26,304
Indefinite lived assets:
Tradenames			16,400		—		16,400
Total intangible assets other than goodwill		$	149,854	$	(107,150)	$	42,704


	December 31, 2024
	Weighted	Gross
	average	Carrying		Accumulated		Net Book
	remaining lives	Amount		Amortization		Value
Intangible assets subject to amortization
Customer relationships	2.9	$	133,105	$	(96,911)	$	36,194
Non-compete agreement	3.1		349		(136)		213
Total			133,454		(97,047)		36,407
Indefinite lived assets:
Tradenames			16,400		—		16,400
Total intangible assets other than goodwill		$	149,854	$	(97,047)	$	52,807


Rest of 2025	$	3,372
2026		12,879
2027		8,270
2028		778
2029		525
Thereafter		480
Total	$	26,304


	September 30, 2025				December 31, 2024
Financial Assets (Liabilities) Not Measured at Fair Value	Carrying Amount			Fair Value	Carrying Amount		Fair Value
ABL Facility (See Note 7) - Level 2	$	—	$	—	$	—	$	—
Senior Secured Notes (See Note 7) - Level 1	$	—	$	—	$	(180,328)	$	(185,075)


	September 30,		December 31,
	2025		2024
Land	$	31,184	$	30,606
Buildings and leasehold improvements		908		908
Machinery and office equipment		2,347		2,206
Other¹		13,240		10,862
		47,679		44,582
Less: accumulated depreciation		(11,355)		(9,647)
Total other property, plant and equipment, net	$	36,324	$	34,935


	Number of Shares		Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2024	985,077	$	7.60
Granted	731,442		5.89
Vested	(407,005)		7.03
Forfeited	(1,170)		10.93
Balance at September 30, 2025	1,308,344	$	6.82


	Options		Weighted Average Exercise Price Per Share	Weighted Average Contractual Life (Years)		Intrinsic Value ($ in thousands)
Outstanding Options at December 31, 2024	362,109	$	7.38	4.82	$	1,018
Vested and expired	(16,882)		4.51	—		—
Outstanding Options at September 30, 2025	345,227	$	7.52	4.05	$	717


		Assumptions
Weighted average expected stock volatility (range)	%	25.94 - 30.90
Expected dividend yield	%	0.00
Expected term (years)		6.25
Risk-free interest rate (range)	%	0.82 - 2.26
Exercise price (range)	$	4.51 - 10.83


	HFS - South		Government		WHS		All Other			Total
For the Nine Months Ended September 30, 2025
Revenue	$	107,794	$	57,133	$	57,091	$	8,840	(a)	$	230,858
Less: Adjusted Cost of Sales (b)
Labor costs	$	29,604	$	6,330	$	476	$	3,512		$	39,922
Outside services		365		83		54		—			502
Community operating costs		39,904		14,358		535		4,174			58,971
Costs of construction		12		—		42,990		—			43,002
Repairs and maintenance		4,164		2,468		97		450			7,179
Other costs		1,768		738		1,441		127			4,074
Adjusted gross profit	$	31,977	$	33,156	$	11,498	$	577		$	77,208
Depreciation of specialty rental assets	$	13,413	$	23,677	$	1,925	$	2,611		$	41,626
Capital expenditures (c)	$	4,700	$	9,814	$	41,201	$	20
Total Assets	$	169,670	$	167,447	$	48,701	$	21,779		$	407,597

For the Three Months Ended September 30, 2025
Revenue	$	35,559	$	23,929	$	36,845	$	3,022	(a)	$	99,355
Less: Adjusted Cost of Sales (b)
Labor costs		9,492		2,569		262		1,142			13,465
Outside services		116		10		20		—			146
Community operating costs		13,612		4,855		316		1,296			20,079
Costs of construction		8		—		28,213		—			28,221
Repairs and maintenance		1,256		868		78		210			2,412
Other costs		678		569		1,414		55			2,716
Adjusted gross profit	$	10,397	$	15,058	$	6,542	$	319		$	32,316
Depreciation of specialty rental assets	$	4,479	$	7,843	$	1,183	$	866		$	14,371
Capital expenditures (c)	$	466	$	2,929	$	25,441	$	1


	September 30, 2025		December 31, 2024
Total reportable segment assets	$	385,818	$	367,658
Other assets		23,238		29,167
Other unallocated amounts		132,099		328,949
Total Assets	$	541,155	$	725,774


	For the Three Months Ended				Amount of		Percentage Change
	September 30,				Increase		Increase
	2025		2024		(Decrease)		(Decrease)
Revenue:
Services income	$	56,010	$	65,796	$	(9,786)	(15)%
Specialty rental income		7,784		29,395		(21,611)	(74)%
Construction fee income		35,561		—		35,561	100%
Total revenue		99,355		95,191		4,164	4%
Costs:
Services		64,051		31,262		32,789	105%
Specialty rental		2,988		4,662		(1,674)	(36)%
Depreciation of specialty rental assets		14,371		14,057		314	2%
Gross Profit		17,945		45,210		(27,265)	(60)%
Selling, general and administrative		12,918		13,319		(401)	(3)%
Other depreciation and amortization		4,093		3,902		191	5%
Other expense (income), net		865		(2)		867	(43,350)%
Operating income		69		27,991		(27,922)	(100)%
Interest expense, net		458		3,813		(3,355)	(88)%
Income (loss) before income tax		(389)		24,178		(24,567)	(102)%
Income tax expense (benefit)		368		4,084		(3,716)	(91)%
Net income (loss)		(757)		20,094		(20,851)	(104)%
Less: Net income attributable to the noncontrolling interest		38		100		(62)	(62)%
Net income (loss) attributable to Target Hospitality Corp. common stockholders	$	(795)	$	19,994	$	(20,789)	(104)%


							Percentage
	For the Three Months Ended September 30,				Amount of Increase		Change Increase
	2025		2024		(Decrease)		(Decrease)
Revenue:
Government	$	23,929	$	53,482	$	(29,553)	(55)%
HFS - South		35,559		38,033		(2,474)	(7)%
WHS		36,845		—		36,845	100%
All Other		3,022		3,676		(654)	(18)%
Total Revenues	$	99,355	$	95,191	$	4,164	4%

Adjusted Gross Profit
Government	$	15,058	$	46,280	$	(31,222)	(67)%
HFS - South		10,397		12,334		(1,937)	(16)%
WHS		6,542		—		6,542	100%
All Other		319		653		(334)	(51)%
Total Adjusted Gross Profit	$	32,316	$	59,267	$	(26,951)	(45)%

Average Daily Rate
HFS - South	$	70.24	$	72.96	$	(2.72)



		For the Nine Months Ended September 30,			Amount of Increase		Percentage Change Increase
	2025		2024		(Decrease)		(Decrease)
Revenue:
Government	$	57,133	$	180,948	$	(123,815)	(68)%
HFS - South		107,794		113,198		(5,404)	(5)%
WHS		57,091		—		57,091	100%
All Other		8,840		8,438		402	5%
Total Revenues	$	230,858	$	302,584	$	(71,726)	(24)%

Adjusted Gross Profit
Government	$	33,156	$	147,556	$	(114,400)	(78)%
HFS - South		31,977		38,241		(6,264)	(16)%
WHS		11,498		—		11,498	(100)%
All Other		577		(1,006)		1,583	(157)%
Total Adjusted Gross Profit	$	77,208	$	184,791	$	(107,583)	(58)%

Average Daily Rate
HFS - South	$	69.98	$	74.04	$	(4.06)


	For the Nine Months Ended
($ in thousands)	September 30,
	2025		2024

Net cash provided by operating activities	$	68,357	$	121,123
Net cash used in investing activities		(41,171)		(23,421)
Net cash used in financing activities		(187,485)		(23,879)
Effect of exchange rate changes on cash and cash equivalents		18		(5)
Net increase (decrease) in cash and cash equivalents	$	(160,281)	$	73,818


($ in thousands)	Total		Rest of 2025		2026		2027		2028
Operating lease obligations, including imputed interest⁽¹⁾	$	9,480	$	2,495	$	5,723	$	1,259	$	3
Total	$	9,480	$	2,495	$	5,723	$	1,259	$	3


Exhibit No.		Exhibit Description
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

	Target Hospitality Corp.

Dated: November 6, 2025	By:	/s/ JASON P. VLACICH
		Jason P. Vlacich
		Chief Financial Officer and Chief Accounting Officer