IMAX(IMAX) - 2025 Q1 - Quarterly Report

IMAX System Growth and Expansion - As of March 31, 2025, IMAX had a total of 1,810 IMAX Systems in 89 countries, an increase from 1,772 Systems in the previous year, representing a growth of 2.1%[174] - The Company continues to expand its IMAX network into underpenetrated international markets, particularly in China, Japan, India, France, and South Korea[188] - As of March 31, 2025, the Company had 893 locations under joint revenue sharing arrangements in its global commercial multiplex network, with contracts in backlog for 346 systems[211] - Approximately 74% of IMAX System arrangements in backlog as of March 31, 2025, are scheduled for installation in international markets, up from 32% in 2024[237] - The IMAX network includes 1,738 commercial systems, with 76% located in international markets as of March 31, 2025[224] Financial Performance - Net income attributable to IMAX China for Q1 2025 was $20.4 million, with$14.6 million attributable to IMAX shareholders, compared to $7.5 million and$5.4 million in Q1 2024, indicating a significant increase of 94.7%[166] - Total revenues for the three months ended March 31, 2025, increased by $7.5 million, or 10$86.7 million, driven by a higher number of installations and stronger IMAX box office performance[246][247]. - The gross margin for the company increased by $6.3 million, or 13$53.2 million for the same period, reflecting improved box office performance and higher revenues[246][247]. - For the three months ended March 31, 2025, the company reported a net income attributable to common shareholders of $2.3 million, or$0.04 per diluted share, compared to $7.9 million, or$0.13 per diluted share in the same period of 2024[244][245]. - Adjusted net income attributable to common shareholders for Q1 2025 was $7.2 million, or$0.13 per diluted share, compared to $7.9 million, or$0.15 per diluted share in Q1 2024[283] Box Office Performance - The company achieved a box office record of $298.2 million in Q1 2025, driven by 33 new film releases, including the notable performance of "Ne Zha 2"[179] - IMAX box office generated by films totaled$298.2 million for the three months ended March 31, 2025, a $30.9 million, or 12$267.3 million in the prior year[249]. - During the three months ended March 31, 2025, local language films generated over $202 million in box office, representing 68$7.4 million, or 17%, to $50.6 million, with gross margin rising by$5.5 million, or 23%, to $29.1 million[253][254]. - The Content Solutions segment revenues increased by$0.2 million, or less than 1%, to $34.2 million, while gross margin rose by$1.5 million, or 7%, to $23.6 million[249][250]. Cash Flow and Financial Position - Net cash provided by operating activities increased by$17.9 million in Q1 2025, primarily due to a decrease in cash used for working capital expenditures[266] - As of March 31, 2025, the company had cash and cash equivalents of $97.1 million, down from$100.6 million at the end of 2024[268] - The company has $250.0 million in available borrowing capacity under its Credit Agreement and additional capacities of$26.5 million and $27.9 million under two revolving credit facilities in China[269] - Total contractual obligations as of March 31, 2025, amount to$355.9 million, with $88.3 million due within one year[272] Market and Strategic Partnerships - The company partnered with various studios and organizations for exclusive releases and events, including collaborations with Sony Pictures and NBC Universal[180] - The Company has announced an agreement with Netflix to debut Greta Gerwig's upcoming film, Narnia, exclusively across the IMAX network starting Thanksgiving 2026[196] - The Company is actively negotiating with studios for additional films to enhance its short- and long-term film slate for the IMAX network[196] Operational Efficiency - Selling, general and administrative expenses increased by$2.2 million, or 7%, to $33.5 million, primarily due to timing of industry events and higher professional service fees[256][257]. - Research and Development expenses decreased by$0.9 million, or 40%, to $1.3 million, mainly due to the capitalization of film camera costs[258]. - The effective tax rate for the company was 47.2% for the three months ended March 31, 2025, compared to 48.8% in the same period of 2024[262].