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IMAX CORP (IMAX)·Q4 2024 Earnings Summary

Executive Summary

  • IMAX delivered a solid Q4: revenue $92.7M (+8% YoY), GAAP EPS $0.10 (+100% YoY), adjusted EPS $0.27 (+59% YoY), and Total Adjusted EBITDA $37.2M (+48% YoY) with a 40.1% margin .
  • Segment performance mixed: Content Solutions up sharply on box office (revenue $25.5M, +34% YoY), while Technology Products & Services grew modestly in revenue but expanded margins (revenue $64.0M, +2% YoY; gross margin $34.2M, +15% YoY) .
  • Management issued 2025 targets: record IMAX box office >$1.2B, Adjusted EBITDA margin ≥40%, and 145–160 system installations; early 2025 China box office set records, reinforcing confidence in the outlook .
  • Non-GAAP lift vs GAAP driven by add-backs (notably $5.8M share-based comp and $3.7M restructuring in Q4), highlighting the importance of mix and cost actions beneath the headline beat on adjusted metrics .
  • Consensus estimates (S&P Global) for Q4 2024 EPS/Revenue/EBITDA were unavailable at time of analysis; thus, we cannot assess beat/miss vs Street for Q4 (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well

  • Material YoY profit expansion: Q4 Adjusted EPS up 59% to $0.27 and Total Adjusted EBITDA up 48% to $37.2M, with margin rising to 40.1% from 29.3% .
  • Content-led outperformance: Q4 box office reached $204M (+20% YoY), powering Content Solutions revenue +34% YoY to $25.5M; top titles included Gladiator 2 ($31M), Venom: The Last Dance ($31M), Mufasa: The Lion King ($26M) and Interstellar ($20M) .
  • Strategic traction: management cited an exclusive theatrical deal with Netflix for Greta Gerwig’s Narnia (IMAX-only 4-week window), stronger studio marketing integration, and a dramatic 2025 China rebound—“in less than two months, our Chinese local language box office has already exceeded the entirety of 2024” .

What Went Wrong

  • China softness weighed on late-2024: management flagged underperformance vs Q4 internal box office expectations due to China and a softer-than-expected Christmas period, even as the situation has turned around in early 2025 .
  • Lower sales-type installations YoY in Q4 (28 vs 35) tempered Technology Products & Services revenue growth, though higher box-office-tied rentals expanded segment margins .
  • Full-year 2024 saw revenue and gross margin decline (FY revenue $352.2M, -6%; FY GM $190.2M, -11%), reflecting strike-impacted slate and content mix; Adjusted EBITDA for FY was modestly lower at $138.9M (-4%) .

Financial Results

Headline Metrics by Quarter

MetricQ2 2024Q3 2024Q4 2024Notes
Revenue ($M)$89.0 $91.5 $92.7
Gross Margin (%)49.4% 55.8% 52.2%
Adjusted EBITDA ($M)$31.0 $38.7 $37.2
Adjusted EBITDA Margin (%)34.8% 42.3% 40.1%
GAAP Diluted EPS ($)$0.07 $0.26 $0.10
Adjusted EPS ($)$0.18 $0.35 $0.27
Vs. S&P Global EstimatesN/A (unavailable)N/A (unavailable)N/A (unavailable)S&P Global consensus unavailable for Q2–Q4 at run time

Segment Breakdown

SegmentQ3 2024 Revenue ($M)Q3 2024 GM ($M)Q3 2024 GM %Q4 2024 Revenue ($M)Q4 2024 GM ($M)Q4 2024 GM %
Content Solutions$30.1 $16.4 55% $25.5 $11.8 46%
Technology Products & Services$58.0 $32.0 55% $64.0 $34.2 53%

KPIs and Operating Metrics

KPIQ2 2024Q3 2024Q4 2024
System Installations (units)24 49 58
System Signings (units)87 16 19
Backlog (systems)504 472 440
Total Network (systems)1,780 1,788 1,807
Available Liquidity ($M)$392 $413 $418
Cash & Equivalents ($M)$91.6 $104.5 $100.6
Total Debt ($M, excl. def. costs)$287 $280 $269
Qtr IMAX Box Office ($M)$196 N/A$204
Share Repurchases$16M YTD, 1.166M shares, avg $13.99 $16M YTD, 1.166M shares $16M FY, 1.166M shares

Non-GAAP adjustments (Q4): add-backs included $5.8M share-based compensation and $3.7M restructuring, among others; Adjusted EPS $0.27 reconciles from GAAP EPS $0.10 accordingly .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Global IMAX Box OfficeFY 2025>$1.2B (initial view reiterated in Q3) >$1.2B (applies incl./excl. China booking fees) Maintained
Adjusted EBITDA MarginFY 2025N/A (no prior 2025 margin target)≥40% New
System InstallationsFY 2025N/A (2025 not previously guided)145–160 New
FY 2024 Adjusted EBITDA MarginFY 2024“High 30s%” Delivered 39.4% Achieved

Notes: Management clarified that 2025 box office guidance (> $1.2B) applies both including and excluding China booking fees for comparability .

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2) MentionsQ3 2024 (Q-1) MentionsQ4 2024 (Current)Trend
AI/technology initiativesEmphasized asset-lite model; no specific AI; raised install guidance Preparing new film cameras; testing live-network tech; events distribution pilots Cloud-based DMR scaling local language; next-gen film cameras with Nolan; proprietary live transmission tech Broadening tech stack to scale content and live
Supply chain/tariffs/macroNot emphasizedChina macro softness and policy support noted; approvals for Hollywood imports improving China weakness weighed on Q4 expectations; early 2025 CNY rebound dramatic From macro drag → early 2025 acceleration
Product performance (content)June surge; diversified portfolio incl. Blue Angels sale Deadpool & Wolverine, Alien: Romulus strong; dense holiday slate Gladiator 2, Venom, Mufasa, Interstellar drove Q4; 2025 slate heavily Filmed for IMAX Strong and densifying slate
Regional trendsExpanding in India/Middle East/SEA; Wanda deal Saudi/Japan signings; China cautious but improving outlook Japan/Western Europe opportunity; China JV leverage and higher take rates Robust ROW growth; China recovering
Regulatory/legalN/AImproved approvals for Hollywood entries into China Film bureau support; limited effect from short-lived CNY ticket subsidies Positive policy backdrop
R&D executionN/AFilm camera project reaching technical feasibility; cap capitalization effect Building and deploying next-gen film cameras with Nolan Translating R&D into filmmaker adoption
Live events & capacityN/ALeague of Legends, concerts, A24 weekday events to lift utilization Live/events bring new audiences; 55+ events in 2024; supports off-peak utilization Expanding non-film utilization

Management Commentary

  • CEO on China rebound and slate leverage: “In less than 2 months, we've already surpassed our total local language box office in China for all of 2024… projecting more than $1.2 billion in IMAX grosses [in 2025].”
  • CEO on Netflix Narnia deal: “First-of-its-kind… exclusive in IMAX and global… a template for not just Netflix, but doing business with others” (tempered by selectivity) .
  • CFO on margin outlook: “We expect adjusted EBITDA margin to be 40% at a minimum in 2025,” citing operating leverage from box office growth and ongoing efficiency initiatives .
  • CFO on Q4 shortfall vs internal box office expectations: “IMAX box office fell short, mostly due to the underperformance in China… and a softer-than-expected Christmas holiday period” (since reversed with CNY strength) .
  • CEO on studio marketing leverage: prominent IMAX branding in TV spots and flexible date programming enabled multi-studio holiday slate execution .

Q&A Highlights

  • Screen growth and geography: IMAX highlighted strong signings in Japan and Western Europe and balanced install expansion, with China JVs carrying higher take rates due to concentration in higher-tier cities .
  • Capital structure and converts: $230M converts due April 2026 (0.5% coupon; capped call at $37); various options under review, revolver capacity available; no near-term pressure .
  • Content windowing/streamers: Netflix Narnia IMAX-exclusive window was complex but repeatable in the right cases; similar eventization with Apple/Warner’s F1 and Amazon’s Blue Angels illustrates a broader template .
  • China dynamics: 2024 softness largely slate-mix driven; 2025 CNY set records; ticket subsidies had minimal overall impact; film bureau support continues; local and Hollywood slates look healthier .
  • Install mix and CapEx: 2025 install guidance 145–160, ~60% JV / 40% sales; JV CapEx expected ~$35–$40M, maintenance stable, supporting higher rental leverage as slate strengthens .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 Primary EPS, Revenue, and EBITDA could not be retrieved at run time (API limit). As a result, we cannot determine beat/miss vs Street for Q4. S&P Global data unavailable.
  • Context: Management emphasized YoY gains in adjusted profitability and guided to ≥40% Adjusted EBITDA margin for 2025, implying positive estimate revisions focus on margins and JV-driven operating leverage rather than top-line alone .

Key Takeaways for Investors

  • Q4 showed healthy YoY profit expansion on modest revenue growth; mix and cost actions drove a 40.1% adjusted EBITDA margin in the quarter, reinforcing the operating leverage story ahead of a slate-heavy 2025 .
  • 2025 outlook is catalyst-rich: management targets record IMAX box office >$1.2B and ≥40% Adjusted EBITDA margin; dense Filmed-for-IMAX pipeline (May–September slots filled) supports higher indexing and utilization .
  • China is an upside swing factor: record CNY and higher JV take rates can amplify flow-through; early 2025 performance suggests risk skew is improving after 2024 softness .
  • Installation plan (145–160; ~60% JV) should compound rental revenue and margins into a strong slate, though sales-type installations may fluctuate quarter to quarter .
  • Non-GAAP lift remains material; adjust for $5.8M SBC and $3.7M restructuring in Q4 when comparing adjusted to GAAP results; monitor sustainability as cost actions roll off .
  • Watch for more streamer/theatrical hybrids (e.g., Netflix Narnia, Apple/Warner F1) that “eventize” new IP windows through IMAX, broadening revenue beyond traditional studio cycles .
  • Tactical: near-term narrative likely driven by China weekly box office momentum and spring/summer slate execution; medium-term thesis rests on margin expansion from operating leverage and continued network growth .

Sources

  • Q4 2024 Press Release and 8-K Exhibit: revenue/EPS, segment, KPIs, FY metrics, guidance .
  • Q4 2024 Earnings Call: management commentary, guidance clarifications, Q&A themes .
  • Q3 2024 Press Release and Call: prior-quarter comps, network/backlog, content and regional commentary .
  • Q2 2024 Press Release: prior-quarter comps, install guidance raise, signings, cash flow .
  • China CNY Press Release (Feb 5, 2025): record holiday performance details .