IMAX Q4 Earnings Miss, Revenues Rise Y/Y on Box Office Gain

Core Insights - IMAX Corporation reported fourth-quarter 2024 adjusted earnings of 27 cents per share, missing the Zacks Consensus Estimate by 6.9% but showing a year-over-year increase of 58.8% [1] - Total revenues for the quarter were $92.6 million, which missed the Zacks Consensus Estimate by 11.56% but increased by 7.7% year over year [1] Revenue Breakdown - Category-wise, revenues from Image Enhancement & Maintenance Services, technology rentals, and finance income increased by 20.4%, 6.5%, and 34% year over year, reaching $42.7 million, $13.7 million, and $2.9 million, respectively [2] - Technology sales revenues decreased by 6.2% year over year to $33.1 million [2] Segment Performance - Content Solutions revenues rose by 33.6% year over year to $25.5 million, driven by higher box office performance, including a record Thanksgiving weekend box office of $24 million [3] - Technology Products and Services revenues increased by 2.5% year over year to $64.04 million, supported by higher box office-related rental revenues [4] - All Other revenues declined by 29.7% year over year to $3.11 million [4] Box Office Performance - The fourth-quarter box office reached $204 million, a 20% increase year over year, contributing to near-record annual domestic box office figures [6] - Top-grossing titles included Gladiator 2 and Venom: The Last Dance, each earning $31 million [6] System Installations and Network Growth - IMAX installed 58 systems in the fourth quarter of 2024, compared to 69 systems in the same quarter of 2023, totaling 146 installations for the year [8] - As of December 31, 2024, IMAX operated 1,807 systems across 90 countries, with a market penetration of 48% in the addressable market of 3,619 locations [9] Financial Metrics - Gross margin expanded by 140 basis points to 52.2% in the fourth quarter, with Content Solutions gross margin contracting to 46.4% and Technology Products and Services gross margin expanding to 53.4% [12] - Adjusted EBITDA increased by 48.6% year over year to $34.2 million [12] - Operating income surged by 247.3% year over year to $9.51 million [13] Cash Flow and Liquidity - Net cash provided by operating activities for 2024 was $71 million, up from $59 million in the prior year [14] - As of December 31, 2024, IMAX had available liquidity of $418 million, including cash and cash equivalents of $101 million [15] Share Repurchase Program - IMAX repurchased 1,166,370 common shares at an average price of $13.99, totaling $16 million for the year [17] - The company is authorized to repurchase up to $400 million of its common shares, with approximately $151 million remaining [18] Future Guidance - IMAX anticipates a record box office of over $1.2 billion in 2025, with an adjusted EBITDA margin of over 40% and system installations projected between 145 to 160 [19]