IMAX(IMAX) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights CEO Commentary IMAX's Q2 results were outstanding, driven by strong network growth, record North American box office, and significant market share gains, with a projected record $1.2 billion global box office in 2025 - IMAX delivered outstanding financial results in Q2, driven by strong network growth, record North American box office, and impressive market share gains from more 'Filmed for IMAX' releases[3] - Strong network growth with 57 IMAX locations opened worldwide and system sales pacing well ahead of 2024 through the first six months[4] - The company remains on track to deliver a record $1.2 billion in global box office in 2025[4] - Market share on the summer slate reached all-time highs due to an unprecedented run of eight 'Filmed for IMAX' releases[4] Key Financial & Operational Highlights IMAX reported strong Q2 financial results, with Net Income, Adjusted EBITDA, and EPS all up over 25% YoY, driven by network growth and box office gains - Net Income, Adjusted EBITDA, and EPS increased over 25% year-over-year[5] - Network growth momentum with 36 system installations in Q2 (+50% YoY) and 123 signings year-to-date (vs 130 in full year 2024)[5] - Strong YoY growth in IMAX box office (+41%) contributed to high incremental profits[5] - Net Income margin of 13% (up 760 basis points YoY) and Adjusted EBITDA margin of 43% (up 780 basis points YoY)[5] - IMAX share of global box office surged +19% YoY in Q2, achieving the highest grossing quarter ever at the North American box office ($143 million)[5] Financial Performance Consolidated Financial Highlights (Q2 & YTD) IMAX reported robust financial growth for Q2 and YTD 2025, with Total Revenue up 3% YoY to $91.7 million and Net Income surging 139% YoY to $12.2 million | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Q2 YoY Change (%) | YTD 2025 (Millions USD) | YTD 2024 (Millions USD) | YTD YoY Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :---------------- | :---------------------- | :---------------------- | :---------------- | | Total Revenue | 91.7 | 89.0 | 3 | 178.4 | 168.1 | 6 | | Gross Margin | 53.6 | 43.9 | 22 | 106.8 | 90.8 | 18 | | Net Income | 12.2 | 5.1 | 139 | 20.4 | 10.5 | 94 | | Diluted Net Income Per Share | 0.20 | 0.07 | 186 | 0.25 | 0.13 | 92 | | Total Adjusted EBITDA | 39.1 | 31.0 | 26 | 76.0 | 63.1 | 20 | - Gross Margin percentage increased by 9.1 basis points in Q2 2025 to 58.5% and 5.9 basis points YTD to 59.9%[6] - Net Income Margin percentage increased by 7.6 basis points in Q2 2025 to 13.3% and 5.2 basis points YTD to 11.4%[6] - Total Adjusted EBITDA Margin percentage increased by 7.8 basis points in Q2 2025 to 42.6% and 5.1 basis points YTD to 42.6%[6] Segment Results IMAX's segment results show varied performance, with Content Solutions revenue slightly down but gross box office surging, while Technology Products and Services saw revenue and gross margin growth driven by increased system installations Content Solutions Segment Content Solutions revenue decreased 3% YoY to $34.0 million in Q2 2025, but IMAX gross box office increased 41% YoY, expanding gross margin to 66% | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Q2 % Change | YTD 2025 (Millions USD) | YTD 2024 (Millions USD) | YTD % Change | | :---------------- | :--------------------- | :--------------------- | :---------- | :---------------------- | :---------------------- | :----------- | | Revenue | 34.0 | 35.1 | (3%) | 68.2 | 69.1 | (1%) | | Gross Margin | 22.4 | 16.1 | 39% | 46.0 | 38.2 | 20% | | Gross Margin % | 66% | 46% | | 67% | 55% | | - Second quarter 2025 IMAX gross box office increased 41% year-over-year to $281.1 million[13] - Global box office market share grew 19% to 3.6% (on less than 1% of screens)[13] Technology Products and Services Segment Technology Products and Services revenue increased 9% YoY to $55.6 million in Q2 2025, with gross margin up 17%, driven by system installations and network expansion | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Q2 % Change | YTD 2025 (Millions USD) | YTD 2024 (Millions USD) | YTD % Change | | :---------------- | :--------------------- | :--------------------- | :---------- | :---------------------- | :---------------------- | :----------- | | Revenue | 55.6 | 50.9 | 9% | 106.2 | 94.0 | 13% | | Gross Margin | 30.2 | 25.8 | 17% | 59.3 | 49.4 | 20% | | Gross Margin % | 54% | 51% | | 56% | 52% | | - Installed 36 systems in Q2 2025, up 50% compared to 24 systems in Q2 2024[13] - Commercial network increased to 1,750 locations from 1,705 in the prior year period[13] - Ended the second quarter with a backlog of 501 IMAX systems[13] Condensed Consolidated Statements of Operations Total revenues for Q2 2025 increased to $91.684 million, with gross margin significantly improving to $53.602 million and diluted EPS rising to $0.20 | Metric (Thousands USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Total Revenues | 91,684 | 88,961 | 178,351 | 168,084 | | Gross Margin | 53,602 | 43,927 | 106,778 | 90,816 | | Income from operations | 14,346 | 2,872 | 31,080 | 14,939 | | Net income | 12,235 | 5,073 | 20,385 | 10,493 | | Net income attributable to common shareholders | 11,255 | 3,583 | 13,582 | 6,857 | | Diluted Net income per share | 0.20 | 0.07 | 0.25 | 0.13 | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $868.582 million, driven by higher cash, while total liabilities and shareholders' equity also rose | Metric (Thousands USD) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | 109,251 | 100,592 | | Total assets | 868,582 | 830,398 | | Total liabilities | 463,509 | 452,183 | | Total shareholders' equity | 404,382 | 377,535 | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities increased 25% YoY to $30.181 million for H1 2025, with investing activities rising due to higher JRSA investments | Metric (Thousands USD) | YTD 2025 | YTD 2024 | | :------------------------------------ | :------- | :------- | | Net cash provided by operating activities | 30,181 | 24,070 | | Net cash used in investing activities | (22,048) | (15,638) | | Net cash provided by financing activities | 480 | 6,609 | | Cash and cash equivalents, end of period | 109,251 | 91,552 | - Investment in equipment for joint revenue sharing arrangements increased to $14.666 million in YTD 2025 from $9.757 million in YTD 2024[37] - Repurchase of common shares by IMAX China totaled $1.454 million in YTD 2025, compared to none in YTD 2024[37] Operational Metrics & Network Growth System Signings Total IMAX System Signings for Q2 2025 decreased to 28 YoY, but year-to-date signings increased to 123, driven by a rise in Traditional JRSA | System Signings | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------------- | :------ | :------ | :------- | :------- | | Sales Arrangements | 15 | 25 | 34 | 30 | | Traditional JRSA | 13 | 62 | 89 | 65 | | Total IMAX System Signings | 28 | 87 | 123 | 95 | System Installations Total IMAX System Installations for Q2 2025 increased 50% to 36, and year-to-date installations rose to 57, showing growth in all categories | System Installations | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------- | :------ | :------ | :------- | :------- | | Sales Arrangements | 13 | 10 | 26 | 15 | | Traditional JRSA | 23 | 14 | 31 | 23 | | Total IMAX System Installations | 36 | 24 | 57 | 39 | System Backlog & Network Size As of June 30, 2025, the total system backlog was 501, a slight decrease, while the total system network expanded to 1,821 systems, driven by commercial multiplex growth | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Total System Backlog | 501 | 504 | | Total System Network | 1,821 | 1,780 | | Commercial Multiplex Systems | 1,750 | 1,705 | | Commercial Destination Systems | 11 | 12 | | Institutional Systems | 60 | 63 | Liquidity & Capital Management Operating Cash Flow and Liquidity Net cash provided by operating activities for H1 2025 increased 25% YoY to $30 million, supported by an expanded $375 million credit facility, resulting in $416 million available liquidity - Net cash provided by operating activities for first half 2025 increased 25% year-over-year to $30 million[14] - Renewed and expanded senior secured revolving credit facility from $300 million to $375 million, including a reduction in borrowing costs[15] - Available liquidity as of June 30, 2025, was $416 million (approximately $490 million with the expanded credit facility)[16] - Total debt, excluding deferred financing costs, was $280 million as of June 30, 2025[16] Share Count and Capital Return Weighted average diluted shares outstanding increased to 55.2 million in Q2 2025, while IMAX China repurchased $1 million in shares, and the share repurchase program was extended and increased to $500 million | Metric (Millions) | Q2 2025 | Q2 2024 | | :------------------------ | :------ | :------ | | Weighted average basic shares outstanding | 53.8 | 52.6 | | Weighted average diluted shares outstanding | 55.2 | 53.4 | - IMAX China repurchased 1,495,900 common shares at an average price of HKD 7.56 per share ($0.96 per share) for a total of $1 million in the first half of 2025[19] - Share repurchase program extended through June 30, 2027, with an increase of approximately $100 million, bringing total authority to $500 million with $251 million available[20] Non-GAAP Financial Measures & Reconciliations Explanation of Non-GAAP Measures This section details IMAX's non-GAAP financial measures, including adjusted net income, EBITDA, and free cash flow, providing supplemental insights into operating trends and credit agreement compliance - Non-GAAP financial measures include adjusted net income, adjusted EPS, EBITDA, Adjusted EBITDA per Credit Facility, and free cash flow[43] - These measures exclude items such as share-based compensation, investment gains/losses, restructuring charges, and employee retention credits to provide a comparable view of operating trends and controllable performance[45][46] - Adjusted EBITDA per Credit Facility is used for a comprehensive analysis of operating performance and to assess compliance with Credit Agreement requirements[47] - Free cash flow is defined as net cash from operating activities less normal recurring capital expenditures, including investments in joint revenue sharing arrangements, property, plant, and equipment, and other intangible assets[50] Adjusted EBITDA per Credit Facility Total Adjusted EBITDA for Q2 2025 increased to $39.058 million, with the margin improving to 42.6%, and for the TTM, it reached $151.917 million with a 41.9% margin | Metric (Thousands USD) | Q2 2025 | Q2 2024 | TTM June 30, 2025 | TTM June 30, 2024 | | :------------------------------------ | :------ | :------ | :---------------- | :---------------- | | Reported net income | 12,235 | 5,073 | 42,594 | 28,823 | | EBITDA | 30,142 | 21,635 | 122,069 | 106,522 | | Total Adjusted EBITDA | 39,058 | 31,001 | 151,917 | 138,828 | | Total Adjusted EBITDA margin | 42.6% | 34.8% | 41.9% | 38.8% | | Adjusted EBITDA per Credit Facility - attributable to common shareholders | 36,686 | 26,850 | 134,513 | 123,067 | Adjusted Net Income Attributable to Common Shareholders and Adjusted Net Income Per Share Adjusted net income attributable to common shareholders for Q2 2025 was $14.607 million ($0.26 per diluted share), a 50% increase, and for H1 2025, it was $21.785 million ($0.40 per diluted share) | Metric (Thousands USD) | Q2 2025 Net Income | Q2 2025 Per Diluted Share | Q2 2024 Net Income | Q2 2024 Per Diluted Share | YTD 2025 Net Income | YTD 2025 Per Diluted Share | YTD 2024 Net Income | YTD 2024 Per Diluted Share | | :------------------------------------ | :----------------- | :------------------------ | :----------------- | :------------------------ | :------------------ | :------------------------- | :------------------ | :------------------------- | | Net income attributable to common shareholders | 11,255 | 0.20 | 3,583 | 0.07 | 13,582 | 0.25 | 6,857 | 0.13 | | Adjusted net income | 14,607 | 0.26 | 9,746 | 0.18 | 21,785 | 0.40 | 17,688 | 0.33 | Free Cash Flow Free cash flow for H1 2025 was $8.133 million, a slight decrease from H1 2024, despite increased operating cash flow, due to higher JRSA investments | Metric (Thousands USD) | YTD 2025 | YTD 2024 | | :------------------------------------ | :------- | :------- | | Net cash provided by operating activities | 30,181 | 24,070 | | Purchase of property, plant and equipment | (4,006) | (2,690) | | Acquisition of other intangible assets | (3,376) | (3,191) | | Free cash flow before growth CAPEX | 22,799 | 18,189 | | Investment in equipment for joint revenue sharing arrangements | (14,666) | (9,757) | | Free cash flow | 8,133 | 8,432 | Company Information About IMAX Corporation IMAX Corporation is an entertainment technology innovator, operating a global network of 1,821 systems across 89 countries, providing immersive experiences and a key theatrical distribution platform - IMAX combines proprietary software, architecture, and equipment to create immersive entertainment experiences[25] - As of June 30, 2025, there were 1,821 IMAX systems operating in 89 countries and territories[26] - IMAX China Holding, Inc., a subsidiary, trades on the Hong Kong Stock Exchange under the stock code '1970'[26] Primary Reporting Groups IMAX operates two reportable segments: Content Solutions, focusing on film remastering and distribution, and Technology Products and Services, covering system sales and maintenance - The Company has two reportable segments: Content Solutions and Technology Products and Services[39] - Content Solutions primarily includes digital remastering of films, distribution of large-format documentary films, and film post-production services[39] - Technology Products and Services includes the sale or lease of IMAX Systems, maintenance of IMAX Systems, and ancillary theater business activities[39] Additional Information Investor Resources & Conference Call IMAX provides investor resources and monthly box office results on its website, and hosted a conference call on July 24, 2025, to discuss Q2 2025 financial results - The Company posts quarter-to-date box office results and additional information on the IMAX Investor Relations website (investors.imax.com)[22][23] - A conference call was hosted on July 24, 2025, at 8:30 AM ET to discuss Q2 2025 financial results, with a webcast available at investors.imax.com[24] Forward-Looking Statements Forward-Looking Statements Disclaimer This section contains a standard disclaimer for forward-looking statements, based on management's assumptions and subject to inherent risks and uncertainties, with actual results potentially differing due to various factors - This earnings release contains forward-looking statements based on management's assumptions and existing information, involving certain risks and uncertainties[28] - These statements include projections regarding business and technology strategies, network growth, capital expenditures, brand equity, industry prospects, and future operating and financial results, including 2025 box office guidance[28] - Actual results may differ materially due to various factors, such as risks associated with international operations, industry conditions, contractual payment obligations, competition, technological advancements, and economic instability[28] - The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements[28]