IMAX CORP (IMAX)·Q3 2025 Earnings Summary

Executive Summary

• Record Q3 performance: revenue $106.7M, adjusted EPS $0.47, adjusted EBITDA margin 48.6% as global IMAX box office hit $367.6M and market share rose to 4.2% .
• Results beat Wall Street: revenue modestly above consensus and adjusted EPS materially above; installations pacing to the high end of 150–160 and full-year $1.2B box office remains on track . Estimates comparison below (values from S&P Global)*.
• Operating leverage drove margin expansion: content solutions margin reached a record 71% (vs 55% LY), total gross margin 63.1% (+740 bps YoY) and net income margin 21.2% (+440 bps YoY) .
• Cash and liquidity catalysts: record quarterly operating cash flow of $67.5M; liquidity ~$544M, convertible notes ($230M, 0.5% due 2026) manageable via revolver or new notes per CFO .

What Went Well and What Went Wrong

What Went Well

• Content diversification drove share and margins: IMAX captured 4.2% of global box office on <1% of screens and lifted content solutions margin to 71% (“the perfect opportunity to display incrementality… at essentially an 85% rate”) .
• Strong system demand: 19 signings in Q3 and 142 YTD already eclipsed full-year 2024; installations pacing to high end of 150–160 guidance .
• Box office resilience versus domestic softness: “While Domestic box office declined 11%, IMAX box office… up 29% in the domestic market and 50% globally” .

What Went Wrong

• Mix of sales-type installations lower in Q3: 17 sales arrangements versus 20 in prior-year quarter, partially offset by maintenance and rental revenue strength .
• Q4 margin expected to be lighter sequentially due to Avatar marketing spend and event cadence, with EBITDA margin guidance anchored in “low 40%” for FY .
• Revenue from “All Other” streaming/consumer technology continued to decline YoY ($1.4M vs $3.4M), modestly impacting non-segment totals .

Financial Results

Consolidated P&L vs Prior Year and Prior Quarter and Estimates

Note: Estimates marked with * are values retrieved from S&P Global.

Sequential dynamics: revenue up ~16% vs Q2; adjusted EPS up ~$0.21; margin mix improved on higher box office and operating leverage .

Segment Breakdown (Q3)

Drivers: box office mix (Hollywood, local language, alternative content), maintenance and rentals strength, and fewer sales-type installs YoY .

KPIs and Network Metrics

Liquidity: available liquidity ~$544M; cash $143M; total debt $261M (excl. deferred costs) as of 9/30/25 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “IMAX is moving into a new position — building to something bigger… we’re breaking out and delivering at a higher level.” — Rich Gelfond, CEO .
• “While Domestic box office declined 11%, IMAX box office… up 29% in the domestic market and 50% globally.” — Rich Gelfond .
• “Adjusted EBITDA margin of 48.6%… Content Solutions gross margin reached a record 71%… spotlighting significant incrementality.” — Natasha Fernandes, CFO .
• “We now expect to hit the high end of our guidance of between 150 and 160 installations for the full year.” — Rich Gelfond .

Q&A Highlights

• Margin potential and cost structure: CFO highlighted strong incremental margins at higher box office levels and stable cost base; opportunity to further grow margins as box office scales .
• Exhibitor demand and pricing: Signings already ahead of 2024; potential for ticket price leverage in heavy film years; capacity utilization remains an opportunity .
• Q4 margin and working capital: EBITDA margin guide low-40% for FY; Q4 margins impacted by Avatar marketing, with revenue carryover into Q1; cash conversion targeted >50% annually .
• Regional market share: Growth constrained mainly by number of IMAX screens; targeting underpenetrated markets (India, SE Asia, Middle East, US Southwest) and local language programming to lift share .
• Alternative content visibility: Mix of pre-planned (music docs) and late-forming (sports/live events); expanding offerings like League of Legends in China .

Estimates Context

IMAX beat Street expectations in Q3 on EPS and modestly on revenue; Q1 and Q2 also exceeded EPS. Estimate values from S&P Global*.

Note: Values with * retrieved from S&P Global. Actuals cited from company materials.

Implications: Consensus likely moves up on margin durability (record content margin), stronger box office mix, and installation pacing; Q4 marketing spend timing suggests EPS cadence shift into Q1 .

Key Takeaways for Investors

• The beat was driven by diversified content and operating leverage: record 71% content margin and 63% gross margin enabled an EPS outperformance versus Street — supportive for multiple expansion .
• Installation momentum is a durable growth driver: with 142 YTD signings and backlog of 478, FY installs likely at the high end, underpinning Technology segment revenue into 2026 .
• Liquidity and capital flexibility reduce refinancing risk: $544M liquidity and low-coupon converts provide options; CFO flagged readiness to use revolver or new notes .
• Near-term margin cadence: expect Q4 margin to be lower on Avatar marketing spend; carryover benefits into Q1 should support sequential EPS resilience .
• Content pipeline is a multi-year catalyst: 2026 slate includes The Odyssey, Narnia, Dune Part Three, and The Mandalorian and Grogu, with IMAX central to production and distribution .
• Pricing and capacity utilization opportunities: exhibitors may push ticket pricing in heavy-film periods; improving capacity utilization can lift returns .
• Regional expansion unlocks share: targeted growth in underpenetrated markets and local language programming strategy should keep lifting market share and margins .

Sources: Company 8-K and press releases (Q3 2025, Q2 2025, Q1 2025) and Q3 earnings call transcript as cited in-line. Estimates comparisons rely on S&P Global consensus data where marked with *.