Daily Brief United States: Arlo Technologies Inc, Kosmos Energy, SIGA Technologies, VAALCO Energy and more

• ARLO reported another quarter of net subscriber adds above expectations and putting the Company on a faster pace to achieve 3 million paying subscribers
• At the end of the June quarter, ARLO had annualized recurring revenue of approximately $200 million even though hardware revenue has remained at levels not seen in two years
• The recurring revenue model gave ARLO the ability to generate free cash flow in the Q2. This inflection point should solidify ARLO’s valuation on a recurring revenue basis

• ________________________________________ ADX Energy (ADX AU)C; target price of A$0.08 per share: A high-quality industry partner in Austria to fund and accelerate Anshof development – ADX is farming out 30% WI in the Anshof discovery to MND.
• MND will also fund ADX’s share of drilling and completion costs of A$3.9 mm per well (total of A$7.8 mm for two wells).
• Kosmos Energy (KOS US/LN): 2Q23 results – 2Q23 net production was ~58 mboe/d.

SIGA has reported Q223 results, which came in largely as expected, and management has provided key operational highlights. Activity in the second half of the year has started to firm up with upcoming TPOXX deliveries (for H223) and better-than-expected international orders (offsetting IV orders that will likely be received in FY24). We maintain our FY23 product revenue estimate of $155m and note H223 management sales guidance of $143–158m. We await further clarity on PEP immunogenicity trials, which we believe are the next material catalyst. As we incorporate the reported quarterly results and slight shift in revenue mix for the balance of the year, our valuation adjusts to $1.24bn or $17.46 per share (vs $1.25bn or $17.53 per share previously).

• In Egypt, 2Q23 WI production was 11,579 boe/d (guidance of 10.6-11.6 mboe/d) with 13 new wells drilled in 1H23. • As a result of this strong operational performance, VAALCO has increased the lower end of the FY23 production guidance range from 20.4-24.4 mboe.d to 22.4-24.3 mboe/d.
• With better drilling efficiency in Canada and Egypt, the FY23 capex guidance has been reduced from US$70-90 mm to US$65-75 mm.