Financial Data and Key Metrics Changes - In the second quarter of 2025, total revenue was approximately $62 million with adjusted EBITDA of approximately $4 million [15] - The company raised its outlook for 2025, now expecting total revenue of $310 million to $320 million and adjusted EBITDA of $50 million to $60 million, reflecting a 15% increase in the midpoint revenue and a 6% increase in the midpoint adjusted EBITDA compared to the previous outlook [22] Business Line Data and Key Metrics Changes - The government segment generated quarterly revenue of approximately $7 million, with declines primarily due to the termination of the PCC contract and the South Texas Family Residential Center contract [15][16] - The HFS segment delivered quarterly revenue of approximately $39 million, benefiting from consistent customer demand and high contract renewal rates exceeding 90% [7][19] - The Workforce Hospitality Solutions segment generated approximately $15 million in revenue, with a contract value increase from $140 million to approximately $154 million due to construction activity [19][55] Market Data and Key Metrics Changes - The company is finalizing contract discussions for a multiyear lease and services agreement in the rapidly expanding technology infrastructure and data center market, which is expected to drive significant demand for workforce hospitality solutions [5][10] - Over $1.2 trillion has been committed to developing technology infrastructure to support AI and data centers since January 2025, creating a strong demand for comprehensive workforce hospitality solutions [10] Company Strategy and Development Direction - The company is focused on accelerating strategic growth initiatives and diversifying its contract portfolio, with a strong emphasis on government and technology infrastructure markets [5][6] - The company aims to maintain momentum and advance strategic initiatives supported by a historic domestic investment cycle and rising government sector demand [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth pipeline, highlighting strong demand in both commercial and government end markets, supported by robust market fundamentals [23][24] - The company is encouraged by the strongest growth pipeline seen in years, with multiple pathways to expand its business portfolio [15][24] Other Important Information - The company ended the quarter with $19 million in cash and a net leverage ratio of 0.1 times, with no outstanding borrowings under its $175 million revolving credit facility [21] - The company is exploring innovative solutions to support immigration initiatives beyond its current asset portfolio [14][62] Q&A Session Summary Question: What is the timeline for West Texas assets and potential contracts? - Management indicated that discussions are ongoing, and they feel positive about the facility being leased and reactivated as government funds start to flow [29][30] Question: How should the data center opportunity be structured? - The data center contract will be a leasing services agreement, expected to have higher margins than service-only contracts, and is imminent [32][34] Question: What is the duration of the data center contracts? - The contracts are expected to be long-term, with a large workforce in one location for many years [41][42] Question: How will the company source beds for the data center? - The company will utilize excess capacity first, then look to the open market, and potentially build new facilities as needed [46] Question: What factors led to the selection of Target for the data center contract? - The selection was based on the company's ability to deliver on time and retain workforce, rather than just price [52][53] Question: What are the drivers behind the updated guidance? - The main driver for the revenue increase is the expansion of the workforce hub contract, along with the wrap-up of the PCC contract [55][58] Question: How has interest from government agencies changed for West Texas assets? - Interest has increased due to the approval of the budget, and discussions are ongoing regarding the need for additional beds [60][62]