IMAX (NYSE:IMAX) FY Conference March 24, 2026 02:00 PM ET Company ParticipantsNatasha Fernandes - CFOConference Call ParticipantsEric Handler - Managing Director and Senior Research AnalystEric HandlerAll right. Good afternoon, everybody. My name is Eric Handler, Media and Entertainment Analyst here at Roth Capital. Very happy to have with us today Natasha Fernandes, Chief Financial Officer of IMAX. Natasha, welcome.Natasha FernandesWell, thanks for having us, Eric.Eric HandlerLet's talk a bit big picture f ...

IMAX Conference Call Summary Company Overview - **Company**: IMAX Corporation (NYSE: IMAX) - **Date**: March 02, 2026 - **Speaker**: Natasha Fernandes, CFO of IMAX Key Industry Insights - **Studio Partnerships**: IMAX collaborates with over 60 content partners globally, including major studios like Paramount, Warner Bros, Netflix, Amazon, MGM, and Apple, as well as local language studios [6][7] - **Impact of Paramount-Warner Merger**: The merger is seen as beneficial for IMAX, enhancing its position in the market and solidifying relationships with key studios [6][7] - **Content Strategy**: IMAX is focusing on a diversified content slate, including local language films, Hollywood content, and alternative content like concert films and live events, which is expected to drive growth [14] Financial Performance and Growth Drivers - **Growth Drivers**: - **Filmed for IMAX Program**: Increased collaboration with filmmakers is leading to higher consumer demand for IMAX films [12] - **Network Expansion**: IMAX's network grew by 3.5% last year, with over 8% growth in international markets and 4% domestically. The company holds over 5% market share domestically with only 1% of screens [13] - **Content Diversification**: The inclusion of local language films and alternative content is expected to enhance utilization and revenue [14] - **Box Office Performance**: IMAX captured $60 million in box office revenue during a weekend with limited competition, showcasing its ability to maximize opportunities [15] Market Dynamics - **China Market**: IMAX has a strong brand presence in China, being one of the top three box office generators. The company is focusing on a diverse slate that includes local language films and Hollywood content [21][22] - **Competitive Differentiation**: IMAX's brand strength, technology, and unique marketing strategies contribute to its competitive edge in the Chinese market [23] Future Outlook - **International Growth**: The Rest of World market presents significant growth opportunities, with only 30% penetration currently. Japan and Australia are highlighted as key growth markets [33][34] - **Financial Guidance**: IMAX is guiding towards $1.4 billion in box office revenue, with expectations for continued growth in domestic and international markets [58] Capital Allocation and Financial Health - **Balance Sheet Strength**: IMAX has successfully refinanced its convertible debt and expanded its revolver, positioning itself well for future investments and share repurchases [39] - **Operating Leverage**: The company reported a 45% EBITDA margin and aims to increase this to over 50% in the coming years through cost management and revenue growth [38] Technological Integration - **AI Utilization**: IMAX is exploring AI applications for operational efficiencies, content programming, and data analysis to enhance revenue generation [43][44] Conclusion - **Execution Focus**: The CFO emphasizes the importance of executing growth strategies effectively and exceeding guidance to deliver value to shareholders [71]

Core Insights - IMAX China experienced significant growth in 2025, with a 20% increase in box office revenue to $7.4 billion, driven by popular animated sequels like "Ne Zha 2" and "Zootopia 2" [3][4] - The company anticipates continued growth in 2026, supported by character-driven stories that foster emotional attachment and repeat engagement [4][15] - IMAX's unique immersive experience positions it as a competitive player in the evolving moviegoing landscape, transforming traditional cinema into cultural events [5][12] Box Office Performance - IMAX China's box office rose by 5% in 2025, reaching $407 million, contributing to a global box office record of $1.28 billion for IMAX films, a more than 40% increase from 2024 [7] - China is home to the largest number of IMAX screens globally, with 787 compared to 424 in the United States, highlighting its strategic importance for IMAX [8] Audience Engagement and Trends - The trend of "eventisizing" moviegoing is emerging, where films become social events, as evidenced by fan gatherings for live events like F1 racing and Taylor Swift's concert film [5][6] - Character-driven IPs are outperforming traditional narratives, with films like "Ne Zha 2" and "Zootopia 2" achieving high repeat-viewing rates [4][16] Future Growth Strategies - IMAX plans to expand its screen network in China through a partnership with Wanda Film, converting up to 27 theaters to IMAX systems by 2029 [13] - The company is also exploring a diverse "film+" ecosystem that includes merchandise development and movie tourism, with film-related merchandise revenue in China surging 120% year-over-year [14] Cultural Impact - The success of "Ne Zha 2" illustrates the potential for Chinese stories to resonate globally, achieving 91% approval from critics on Rotten Tomatoes, emphasizing the importance of culturally resonant storytelling [16]

Core Viewpoint - The theatrical industry is experiencing significant changes, with IMAX emerging as a leader amidst the turmoil, while other theater stocks like AMC, Cinemark, and Marcus Theatres are struggling [1][3]. Group 1: IMAX Performance - IMAX shares increased by over 44% in 2025, driven by a record global box office of $1.28 billion, which is a more than 40% increase from 2024 and 13% higher than the previous record in 2019 [2]. - IMAX reported a net income of $43 million in the first nine months of 2025, marking a 67% increase from the same period in 2024, and was profitable in all three quarters of the year [18]. Group 2: Industry Challenges - Domestic ticket sales have rebounded but remain about 25% below the record $11.8 billion from 2018, with the 2025 box office falling short of the $9 billion analysts projected [4]. - The industry is facing challenges due to changing consumer habits, with streaming services becoming a more attractive option for entertainment [5]. Group 3: Premium Large Format (PLF) Trends - In 2025, over 16% of domestic tickets sold were for premium large format theaters, up from 15% in 2024 and 13.8% in 2023, indicating a growing preference for elevated viewing experiences [7]. - The average ticket price for general movies in 2025 was $13.29, while PLF tickets averaged around $17.65, reflecting the higher value consumers place on premium experiences [8]. Group 4: Future Outlook - IMAX is expected to benefit from a slate of upcoming big-budget films, with a forecasted global box office haul of $1.4 billion for 2026 [11]. - The company has over 1,700 locations and a backlog of 478 contracts to build IMAX screens, indicating strong growth potential [12].