Target Hospitality Corp. Segments Disclosure
18. Business Segments
The Company has three reportable operating segments as defined below. The aggregate external revenues of these reportable segments exceeded 75% of the Company’s consolidated revenues for all periods presented. The remaining operating segments were combined in the “All Other” category.
The Company is organized primarily on the basis of geographic region and customer industry group and operates in three reportable segments. These reportable segments are also operating segments. Resources are allocated, and performance is assessed by our CEO, whom we have determined to be our Chief Operating Decision Maker (CODM).
Our remaining operating segments have been consolidated and included in an “All Other” category.
The following is a brief description of our reportable segments and a description of business activities conducted by All Other.
HFS – South — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers in the natural resources and development industry located primarily in Texas and New Mexico.
WHS — Segment operations consist primarily of revenue from the construction phase of the contract with Lithium Nevada, LLC (“Lithium Nevada”), supporting a North American critical mineral supply chain, as well as specialty rental and vertically integrated hospitality services revenue from customers in support of the development of a regional data center campus located in Southwestern United States.
Government — Segment operations consist primarily of specialty rental and vertically integrated hospitality services revenue from customers with Government contracts located in Texas.
All Other — Segment operations consist primarily of revenue from specialty rental and vertically integrated hospitality services revenue from customers primarily in the natural resources and development industry located outside of the HFS – South segment.
The accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies” for the Company in Note 1. The Company evaluates performance of their segments and allocates resources to them based on revenue and adjusted gross profit. Adjusted gross profit and Adjusted cost of sales for the CODM’s analysis includes the services and construction costs and specialty rental costs in the financial statements and excludes depreciation, loss on impairment, and certain severance costs.
The table below presents information about reported segments for the years ended December 31:
2025 | ||||||||||||||||
| | HFS – South | | WHS | | Government | All Other | | Total | |||||||
Revenue | $ | 141,694 | $ | 96,800 | $ | 70,794 | $ | 11,347 | (a) | $ | 320,635 | |||||
Less: Adjusted Cost of Sales (b) | ||||||||||||||||
Labor costs | $ | 39,886 | $ | 1,783 | $ | 9,097 | $ | 4,698 | $ | 55,464 | ||||||
Outside service | 560 | 111 | 96 | — | 767 | |||||||||||
Community operating costs | 53,139 | 2,479 | 19,269 | 5,664 | 80,551 | |||||||||||
Costs of construction | — | 69,553 | — | — | 69,553 | |||||||||||
Repairs and maintenance | 5,423 | 272 | 3,119 | 575 | 9,389 | |||||||||||
Other costs | 2,258 | 2,005 | 653 | 154 | 5,070 | |||||||||||
Adjusted gross profit | $ | 40,428 | $ | 20,597 | $ | 38,560 | $ | 256 | $ | 99,841 | ||||||
Depreciation of specialty rental assets | $ | 17,761 | $ | 5,044 | $ | 30,894 | $ | 3,483 | $ | 57,182 | ||||||
Capital expenditures (c) | $ | 5,549 | $ | 56,394 | $ | 10,017 | $ | 218 | ||||||||
Total Assets | $ | 165,406 | $ | 63,934 | $ | 157,460 | $ | 21,100 | $ | 407,900 | ||||||
2024 | |||||||||||||||
| | HFS – South | | WHS | | Government | All Other | | Total | ||||||
Revenue | $ | 149,931 | $ | — | $ | 224,650 | $ | 11,691 | (a) | $ | 386,272 | ||||
Less: Adjusted Cost of Sales (b) | |||||||||||||||
Labor costs | $ | 40,044 | $ | — | $ | 10,706 | $ | 5,066 | $ | 55,816 | |||||
Outside service | 293 | — | 100 | 1 | 394 | ||||||||||
Community operating costs | 51,286 | — | 23,979 | 5,833 | 81,098 | ||||||||||
Repairs and maintenance | 5,144 | — | 3,375 | 680 | 9,199 | ||||||||||
Other costs | 2,342 | — | 1,222 | 858 | 4,422 | ||||||||||
Adjusted gross profit | $ | 50,822 | $ | — | $ | 185,268 | $ | (747) | $ | 235,343 | |||||
Depreciation of specialty rental assets | $ | 21,577 | $ | — | $ | 32,010 | $ | 3,577 | $ | 57,164 | |||||
Capital expenditures (c) | $ | 15,806 | $ | — | $ | 15,498 | $ | 445 | |||||||
Total Assets | $ | 176,907 | $ | — | $ | 190,751 | $ | 27,389 | $ | 395,047 | |||||
2023 | ||||||||||||||||
| HFS – South | | WHS | | Government | All Other | | Total | ||||||||
Revenue | $ | 148,677 | $ | — | $ | 403,724 | $ | 11,207 | (a) | $ | 563,608 | |||||
Less: Adjusted Cost of Sales (b) | ||||||||||||||||
Labor costs | $ | 37,652 | $ | — | $ | 18,643 | $ | 4,681 | $ | 60,976 | ||||||
Outside service | 497 | — | 148 | 10 | 655 | |||||||||||
Community operating costs | 50,592 | — | 43,265 | 6,474 | 100,331 | |||||||||||
Repairs and maintenance | 4,464 | — | 5,673 | 579 | 10,716 | |||||||||||
Other costs | 4,028 | — | 3,515 | 1,437 | 8,980 | |||||||||||
Adjusted gross profit | $ | 51,444 | $ | — | $ | 332,480 | $ | (1,974) | $ | 381,950 | ||||||
Depreciation of specialty rental assets | $ | 24,557 | $ | — | $ | 39,984 | $ | 4,085 | $ | 68,626 | ||||||
Capital expenditures (c) | $ | 33,729 | $ | — | $ | 30,363 | $ | 514 | ||||||||
A reconciliation of total segment adjusted gross profit to total consolidated income before income taxes for years ended as of the dates indicated below, is as follows:
| December 31, 2025 | | December 31, 2024 | | December 31, 2023 | ||||
Total reportable segment adjusted gross profit | $ | 99,585 | $ | 236,090 | $ | 383,924 | |||
Other adjusted gross profit | 256 | (747) | (1,974) | ||||||
Depreciation and amortization | (73,386) | (72,806) | (83,977) | ||||||
Selling, general, and administrative expenses | (58,508) | (54,258) | (56,126) | ||||||
Other income (expense), net | (2,694) | 502 | (1,241) | ||||||
Loss on extinguishment of debt | (2,370) | — | (2,279) | ||||||
Interest expense, net | (6,086) | (16,619) | (22,639) | ||||||
Change in fair value of warrant liabilities | — | 675 | 9,062 | ||||||
Consolidated income (loss) before income taxes | $ | (43,203) | $ | 92,837 | $ | 224,750 | |||
A reconciliation of total segment assets to total consolidated assets as of the dates indicated below is as follows:
| | December 31, | December 31, | |||
2025 | 2024 | |||||
Total reportable segment assets | $ | 386,800 | $ | 367,658 | ||
Other assets (d) | 22,398 | 29,167 | ||||
Other unallocated amounts | 121,007 | 328,949 | ||||
Total Assets | $ | 530,205 | $ | 725,774 | ||
Other unallocated assets are not included in the measure of segment assets provided to or reviewed by the CODM for assessing performance and allocating resources, and as such, are not allocated. Other unallocated assets consist of the following as reported in the consolidated balance sheets of the Company as of the dates indicated below:
| | December 31, | December 31, | |||
2025 | 2024 | |||||
Total current assets | $ | 73,338 | $ | 249,336 | ||
Other intangible assets, net | 39,332 | 52,807 | ||||
Operating lease right-of-use assets, net | 6,544 | 24,935 | ||||
Deferred financing costs revolver, net | 1,793 | 1,871 | ||||
Total other unallocated amounts of assets | $ | 121,007 | $ | 328,949 | ||
There were no single customers from the HFS – South segment for the years ended December 31, 2025, 2024 and 2023 that represented 10% or more of the Company’s consolidated revenues.
Revenues from one customer of the Company’s WHS segment represented approximately $89.2 million of the Company’s consolidated revenues for the year ended December 31, 2025. Revenues from one customer within the WHS segment represented approximately 28% of the Company’s consolidated revenues for the year ended December 31, 2025.
For 2025, 2024, and 2023, revenues from the Company’s Government segment were from two customers and represented approximately $70.8 million, $224.7 million, and $403.7 million of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues from one customer within the Government segment represented approximately 11%, 48%, and 62% of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues from another customer within the Government segment represented approximately 11%, 9.9%, and 9.9% of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the Government segment was comprised of a single customer following the termination of the PCC Contract effective February 21, 2025 as discussed in Note 2. Additionally, the community of assets associated with the prior STFRC Contract within the Government segment were
reactivated on March 5, 2025 under the new DIPC Contract and the operating results and related assets associated with the new DIPC Contract will continue to be reported within the Government segment.
There were no revenues generated from transactions between reportable operating segments for the years ended December 31, 2025, 2024, and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 13, 2020 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.