Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Imax Corp (IMAX, Financial) achieved its best first quarter ever with nearly $300 million in global box office revenue.
- The company signed agreements for over 100 new and upgraded systems year-to-date, indicating strong demand and growth potential.
- Imax Corp (IMAX) reported double-digit growth in revenue and adjusted EBITDA, with an impressive adjusted EBITDA margin of 43%.
- The company is benefiting from a positive trend in global content, including the rise of big-budget local language blockbusters.
- Imax Corp (IMAX) has a strong slate of upcoming films, including major releases like Avatar: Fire and Ash, which are expected to drive future growth.
Negative Points
- Concerns about potential reductions in Hollywood film imports to China could impact future revenue, although Imax Corp (IMAX) remains confident this will not affect major releases.
- The company faces challenges related to the availability of IMAX cameras, which could limit the number of films shot with IMAX technology.
- There is ongoing uncertainty regarding the impact of economic conditions in China on consumer spending and box office performance.
- Imax Corp (IMAX) must navigate the complexities of international distribution and manage the timing of film releases across different markets.
- The company is exposed to risks associated with changes in government policies and regulations in key markets like China.
Q & A Highlights
Q: Has there been any adverse shift in tone from Chinese exhibitors regarding the signing discussions or the timing of planned installations due to the potential reduction in Hollywood film imports?
A: Richard Gelfond, CEO, stated that there has been no reduction in activity in China. In fact, there is an increase in interest and incoming calls. The recent Beijing Film Festival highlighted the importance of IMAX, and the narrative in China is very positive. The reduction in film imports is expected to target smaller budget films, not those typically shown in IMAX theaters.
Q: What is the primary gating factor to having a larger percentage of films shot with IMAX cameras in the future?
A: Richard Gelfond, CEO, explained that the main factor is the availability of slots rather than the number of cameras. IMAX is selective about the films they choose to shoot with their cameras. While there is a limitation on film cameras, digital cameras do not have this constraint. The focus is on selecting the right content and timing.
Q: Can you discuss the strength of the first quarter performance in China and whether it came from Tier 3 to 5 cities?
A: Richard Gelfond, CEO, mentioned that the performance was uniform across all markets. The success was driven by a special movie and a new marketing approach that included joint promotions and social media marketing, particularly on platforms like TikTok.
Q: How do you view the issue of theatrical windows and their impact on IMAX?
A: Richard Gelfond, CEO, stated that IMAX does not focus on PVOD windows as they are not seen as competitive. The emphasis should be on content quality and diversification rather than the length of theatrical windows. IMAX's global diversification helps mitigate the impact of shorter windows.
Q: How does IMAX ensure that the increase in "Made for IMAX" titles does not pressure gross margins?
A: Richard Gelfond, CEO, explained that the DMR conversion process is not labor-intensive and has been automated over the years. IMAX partners with local firms for foreign language titles, and the process has been optimized to maintain margins. Natasha Fernandes, CFO, added that the focus is on capturing box office incrementality and finding opportunities to re-release successful titles.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
