NASDAQ$TH

Target Hospitality Corp · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Reported record-setting results driven by the Government segment and the expanded PCC community.

Target Hospitality reported a strong second quarter in 2023, with a 31% increase in revenue to $143.6 million and a net income of $46.5 million. The company's adjusted EBITDA increased by 62% to $90.9 million.

  • Second quarter revenue increased 31% to $143.6 million compared to the same period in 2022.
  • Net income was $46.5 million, compared to $22.9 million for the same period in 2022.
  • Adjusted EBITDA was $90.9 million, a 62% increase compared to the same period in 2022.
  • The company had approximately $195 million in total available liquidity and a net leverage ratio of 0.4x as of June 30, 2023.

Headline financials

Total Revenue

$144M

Previous: $110M+31.0%
EPS (adj)

$0.44

Previous: $0.24+83.3%
Average Utilized Beds

14.9K

Previous: 11.5K+29.1%
Utilization

91.0%

Previous: 78.0%+16.7%
Capital Expenditures

-$5M

Previous: -$16M+68.7%
Free Cash Flow

$41.5M

Previous: $6.9M+501.1%
Net Income

$46.5M

Previous: $22.9M+103.3%
Operating Income

$64.8M

Previous: $37.8M+71.2%
Gross Profit

$82.4M

Previous: $52.5M+56.8%
Cash & Equivalents

$69.6M

Previous: $9.7M+617.4%
Total Assets

$666M

Previous: $547M+21.8%
Stock-Based Comp

$3.47M

Previous: $1.89M+83.4%

Revenue & EPS history

Target Hospitality · Revenue · Quarterly

$144M

Q2 2023+31%vs Q2 2022
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Revenue by segment

Target Hospitality · $144M total across 3 segments · Q2 2023

  • Government
    $101M+35.1%
  • Hospitality & Facilities Services - South
    $39.2M+20.0%
  • All Other
    $3.3M+385.6%

Forward guidance

The Company is providing its 2023 outlook, excluding acquisitions of: Total revenue between $550 and $580 million, Adjusted EBITDA between $346 and $365 million, Total capital spending between $25 and $35 million, excluding acquisitions and Zero net debt by year end 2023.

Tailwinds

  • Total revenue between $550 and $580 million
  • Adjusted EBITDA between $346 and $365 million
  • Total capital spending between $25 and $35 million, excluding acquisitions
  • Zero net debt by year end 2023
  • Strategic growth opportunities and seeks to allocate over $500 million of net growth capital through 2027

Headwinds

  • Sales cycles are inherently longer prior to official contract award and announcement.
  • Final outcomes remain uncertain
  • Excluding acquisitions
  • Government ICF network capacity to approximately 10,000 ICF beds across multiple geographic locations
  • Anticipates contract specifications being finalized later in 2023

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+2.0%

Avg return

Earnings day

+3.2%

Avg return

5 days after

+4.5%

Avg return

30 days after

65%

20 / 31 earnings

Positive

+23.7%

Q4 2021

Best reaction

-34.9%

Q4 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+17.9%+21.7%
Q4 2025+13.8%+14.0%+81.2%
Q3 2025-15.5%-15.4%+6.7%
Q1 2025+5.1%+3.8%-0.3%
Q4 2024+6.4%+7.3%+3.6%
Q3 2024+6.4%-1.5%-6.2%
Q2 2024+12.5%+10.5%+10.5%
Q1 2024+5.0%+4.1%+0.5%
Q4 2023+4.8%+1.8%+25.4%
Q3 2023-3.6%-9.1%-13.4%
Q2 2023+7.8%+13.5%+21.9%
Q1 2023+13.9%+25.2%+24.5%
Q4 2022+6.0%+8.4%-23.0%
Q3 2022+17.6%+23.2%+38.6%
Q2 2022-9.6%-2.6%-7.8%
Q1 2022-11.0%-13.3%-3.2%
Q4 2021+23.7%+18.6%+19.6%
Q3 2021-2.0%-13.1%-31.6%
Q2 2021-16.4%-14.4%-4.2%
Q1 2021+8.3%+32.8%+56.6%
Q4 2020+6.8%-7.7%+30.6%
Q3 2020+3.2%+0.4%+30.7%
Q2 2020+12.4%+13.8%-9.0%
Q1 2020+8.2%+5.9%-28.6%
Q4 2019-34.9%-3.1%-58.3%
Q3 2019-11.2%-15.0%-15.5%
Q2 2019-13.5%-12.2%-8.9%
Q1 2019-0.7%-1.1%-6.7%
Q3 2018+0.1%+0.2%+1.7%
Q2 2018+0.5%+0.5%+0.2%
Q1 2018-0.5%+1.0%-0.7%
Q4 2018
Q3 2017
Q2 2017
Q1 2017

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