Imax at 37th Annual ROTH Conference: Strategic Growth and Market Expansion

On Tuesday, 18 March 2025, at the 37th Annual ROTH Conference, Imax Corporation (NYSE: IMAX) showcased its strategic initiatives and growth prospects. CFO Natasha Fernandez highlighted Imax’s resilience and market expansion, while acknowledging challenges in Hollywood’s recovery. The company is poised for significant growth, driven by a strong slate of films and an expanding global footprint.

Key Takeaways

• Imax aims for over $1.2 billion in global box office revenue in 2025, a 30% increase from 2024.
• The company plans to install 45 to 60 new systems, adding to its 1,730 screens worldwide.
• Local language content now contributes 15-20% of the box office, with further growth expected.
• Imax is enhancing content strategy with alternative and local language films.
• China shows strong recovery, with 80% of 2024’s box office already achieved this year.

Financial Results

• Guidance: Imax forecasts over $1.2 billion in global box office revenue for 2025, a significant increase from $900 million in 2024. The adjusted EBITDA margin was 39% in 2024.
• China: The box office in China was just under $200 million in 2024. The current year has already reached 80% of that figure, indicating a robust recovery.
• Domestic Market: Imax’s domestic market share has grown over 50% in recent years. Films for Imax perform 20% better on opening weekends.
• Rest of World: Imax’s screen footprint grew by 5% in 2024, with 25% growth over recent years. Penetration is at about 35% of its full potential.
• Local Language Content: This segment now accounts for 15-20% of box office revenue, up from single digits, and has already surpassed 2024 figures.

Operational Updates

• Network Expansion: Imax plans to install 45 to 60 systems, having installed 146 last year. The network includes over 1,730 screens in 90 countries, with 3,600 potential new locations identified.
• Content Strategy: A record number of Films for Imax titles are scheduled, with a focus on local language content in regions like India, Japan, Malaysia, and Indonesia. Imax is also expanding into Vietnamese and Arabic titles.
• Alternative Content: Imax is partnering with streaming platforms for series launches and exploring opportunities in esports, such as League of Legends events in China and Korea.

Future Outlook

• Best Year Ever: Imax anticipates 2025 to be its best year for box office revenue.
• Growth Drivers: The company is focused on expanding its footprint and increasing screen utilization. A 1% increase in utilization could generate $75-100 million in additional revenue.
• Local Language Opportunities: Continued growth is expected from alternative and local language content, which is increasingly popular.

Q&A Highlights

• China: Imax remains optimistic about China’s recovery and the performance of both Hollywood and local language films.
• Hollywood in China: Demand for Hollywood movies persists, but content quality is crucial.
• Local Language Focus: Discussions highlighted potential in markets like India and Japan.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 37th Annual ROTH Conference:

Eric Handler, Media and Entertainment Analyst, Roth Capital: everybody. Thank you very much, for being here. Greatly appreciated. For those that do not know me, I am Eric Handler, the media and entertainment analyst here at Roth Capital.

And our next company today is IMAX Corporation. We’re very happy to have Natasha Fernandez, the company’s Chief Financial Officer. For those of you not familiar with IMAX, IMAX obviously you seek all the time in movie posters and trailers, very important to know IMAX is not a movie theater company. They are an entertainment technology platform. So I I figured it’s a good distinction.

I know Rich always a very important subject for Rich near and dear to him. So, Natasha, thank you very much for being here.

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Oh, thanks for having us, Eric.

Eric Handler, Media and Entertainment Analyst, Roth Capital: So let’s talk big picture first because this is definitely a very interesting geopolitical and economic time that we’re in right now. You are a global company. Why do you think now is a good time to be invested in IMAX?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: I think it’s a great time to be invested in IMAX. First of all, I’ve been in IMAX for eighteen years, so I’ve seen, the company through all of its different seasons. And I’m particularly excited about the season we are in and looking forward to in the next few years and, and beyond. And so, you know, in this time, obviously, there’s a lot going on in the markets and in, just, you know, everything that’s happening. And so the one thing about our business, as you said, is global.

It’s global in nature. And, what’s helpful about that is in times when certain markets are not doing as well or, economies are not doing as well, other countries are. And so, if for instance, you know, we are we are in The US. We are in China. We are in 90 countries around the world in where we operate.

And, you know, last year, The US performed particularly well for us. It was our second best, year from a box office perspective domestically, whereas China’s already off, to the races this year. I mean, we’re already at 80% of our box office full year box office in 2024 for China. So you can see how that helps, ebb and flow and create a strength to our model on the global scale. And then also from a resiliency perspective, I mean, we’ve seen recessionary times.

And in those times, we’ve seen how, going to the movies is an affordable luxury. And we’ve actually done better during those times because and we’ve come out of them stronger because, you you know, people may not go on those trips or spend spend on bigger, expensive ticket items like cars or even big dinners. But going to a movie is very affordable, and it’s entertaining. It’s, you know, three hours of your time. You get, to eat something.

You can have, you know, beer or whatever. And and then but you’re enjoying it with a communal experience. And I think that’s what’s really important is, you know, I’ve been to particularly, some very large theaters like Lincoln Square in New York. And when it’s packed and everybody’s watching the movie, you hear everybody laugh together. You hear people clap, and, it’s just an enjoyable experience, so from that perspective.

But then, also, even this year, as we look, our Hollywood slate is stronger than ever with over 12, Film for IMAX titles, a record for us, which means it’s using our technology. But then on top of that, that then leads to stronger operating, leverage and margins. And so, you know, I’m really excited about the year ahead of us regardless of of where, things are in the market right now.

Eric Handler, Media and Entertainment Analyst, Roth Capital: That’s great. And, you know, when you look at this year, this year is really the first year for the industry where you can’t say, oh, there’s a COVID impact that impacted the slate or the Hollywood strike is was impacted late. I mean, it seems like you’ve got sort of clean air to go through. And how do you feel about what the where the position the studios are in now in terms of the production slates and particularly obviously you guys are focused on blockbuster movies. How do you feel about where the studios are right now in terms of how they’re ramping up?

And do you feel like they’re devoting just as much time as ever to the blockbuster movies and you’re you’re in a good spot for that?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: We feel very confident. I mean, I think we’re in the best position we’ve ever been in the industry. It’s been, you know, I think you can see it in our market share. So our market share, for instance, domestically has grown over 50% in the past few years. And, even globally, it’s grown 20%.

And that’s showing the strength of the IMAX brand and the moat around our business, but then also how studios and filmmakers are leaning into IMAX. I mean, in more recent days, filmmakers are the ones coming to us first. I’d say five, six years ago, you probably had the one major filmmaker coming to us, who we all know who that is. But then, but more recent days, you have many filmmakers coming directly to us first and then the studios. And what’s helpful about that is the studios are partnering more with us, coming to us, because they want their movie to have an IMAX release with it, because they understand what that could do to lift the box office for that movie, and really associate it with a very strong global brand.

And then in that, you know, they’re leaning in when they market. And so they’re marketing it as an IMAX experience in an IMAX title. And then filmmakers are also going out there and saying, I filmed it with IMAX cameras. You need to see it in IMAX the way I intended you to see it. And it is true.

I’ve seen, you know, I’ve seen the same movie in multiple theaters and in the IMAX and and not in IMAX just to see the difference as well. And you can see, the technology and the difference, especially when the when they’re using our cameras in these ex expanded aspect ratio.

Eric Handler, Media and Entertainment Analyst, Roth Capital: Mhmm.

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: And so it fills the screen in a more immersive way too.

Eric Handler, Media and Entertainment Analyst, Roth Capital: Yeah. When it does seem like as the consumer has come back post COVID, premium large formats have definitely increased in market share. So people are looking for that premium experience. IMAX is the most premium experience. How has that sort of shaped you as you’re talking to more directors, you’re getting your studios want to work with you?

Is that something leverageable for IMAX itself as you talk to the studios, as you talk to directors, as you talk to more theaters, you know, how is that positively impacting IMAX both on the theater side and on the studio side?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: It is it is completely impacting us in a very positive way. I mean, one, the studios are coming to us well in advance. I don’t think we’ve ever been in a position where we’ve had such good visibility into numerous years out, multiple years out. For instance, all of ’20 most of 2025, we knew before we even hit 2025, which I’d say a few years ago, we wouldn’t have known most of the film slate. I mean, as we headed into ’24 when we sat in ’23 and I worked on budgets, for instance, I would have not known most of that film slate.

Whereas this year, when we prepped the budget for ’25, you knew the film slate because the studios are coming in earlier and leaning in. And then, and then the same with the filmmakers. And I think that that’s all working towards that impact of exhibitors understanding they need to have an IMAX screen in order to capture the box office. Because if filmmakers and studios are leaning into IMAX and understanding that IMAX lifts the box office of titles and makes it, makes it a higher level title, and movie for people to experience then. Exhibitors also realize they need an IMAX screen and, you know, as such, obviously, we’re we gave out guidance this year to install a 45 to a 60 systems, and continue to expand our network.

And, you know, we’re over seventeen thirty screens worldwide, in 90 countries, and that continues to grow. And I think that growth is coming from the fact that studios and filmmakers are leaning in.

Eric Handler, Media and Entertainment Analyst, Roth Capital: Let’s talk about that for a second. I mean, when you look at your runway for growth, I know you provided in the past, you know, a sort of a a total addressable market and that’s has grown considerably over time. Where are you and where are your opportunities do you think for the most significant growth, for expansion?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: So we have we call it zones, and we have about we’ve, we did the analysis, I’d say, a little over a year ago, and we’ll probably do one in very soon as well. We do it every couple years. But, the last time we did the analysis, we zoned about 3,600 locations worldwide. I mean, we’re only at about 1,700 locations right now, and we have a backlog so, you know, about 2,000, you’d say, between our network and our confirmed backlog and pipeline that’s gonna feed into there. So then we still have another 1,600 locations to go, right, and to fill in.

And that pipeline continues to get in, filled in every year. I mean, we’ve already had 10 signings in Japan this year, and we’re only, you know, a couple months in. And and some of those will get installed this year. So I think you’re seeing that the the pace of the signings and the installs are increasing versus prior years. I mean, the 01/1945 to 160 guidance we gave, for reference, we installed 146 last year, right?

So I think from that perspective, we’re raising the bar each year as we continue to grow our footprint, and, and that pipeline is all committed backlog. And so having the backlog there feeds naturally into install installations, and then you fill it again with new signings each year, and it continues to operate in a very healthy way to grow that footprint.

Eric Handler, Media and Entertainment Analyst, Roth Capital: It’s amazing to think for as long as IMAX has been around, you keep installing, I’ll use a round number, a 50 screens a year, you could double in another ten years.

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Yeah.

Eric Handler, Media and Entertainment Analyst, Roth Capital: Yeah. And, there’s so there’s still a lot of white space for the company.

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: A lot of growth to still happen. And, you know, I think we we said it publicly already that we believe ’25 will be our best year ever for box office. And we think as we continue to expand the footprint, that naturally feeds growth in box office along with the fact that our brand and our position in the industry is strengthening, so then you continue to capture more market share that way. And another area we’ve been focusing on is just utilization of our existing footprint. So expand your footprint, yes, that creates growth, but increase the utilization on your existing footprint.

I mean, if you increased your utilization by just one point, that would be 75 to a hundred million dollars of box office just on your existing base. And so growth coming from your existing network

Eric Handler, Media and Entertainment Analyst, Roth Capital: and from expansion. I’ll I’ll come back to that in a minute. But, you know, when we do look at your gross global box office guidance for the year of around $1,200,000,000 can you maybe dissect a little bit of what sort of goes into that guidance and sort of like your key drivers, to think about or let let people contract to know how well you’re doing at the moment?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Sure. So, our guidance was over $1,200,000,000 a box office. That’s a significant growth, over 30% growth, versus the 900,000,000 in, 2024. You know, there’s I think there’s about three or four factors that we put into it when we came through. One would obviously be the China recovery.

In 2024, box office was just shy of 200,000,000 in China, and we 100% believe that there would be a recovery in 2025, of which we’ve already seen, right, with the 80% of already achieving 80% in twenty twenty four’s number, and there’s still the rest of the year to go. But then also, Hollywood and domestic, our growth in domestic. I mean, we talked about our market share doubling over the past handful of years domestically, and that just continues to increase. In 2024, what’s interesting is we actually signed agreements with eight new partners domestically. So there’s still a lot of growth to be had domestically for IMAX in particular.

And, and I think that that’s another area because those film for IMAX titles, we we have a trend of performing 20%, higher or indexing 20% higher on opening weekends domestically. And so with a record number of those film for IMAX titles this year, that leads lends towards, the 1,200,000,000.0 and then our rest of world footprint. And so in 2024, we grew our rest of world footprint, of screens by 5%. But in the last handful of years, we’ve grown at 25%. So if you think about the fact that we’ve now set up that rest of world, which is still under penetrated, we’ve only penetrated about 35% of it, but we’ve grown it 25% in the handful of years.

And so now it’s set up to receive that the really strong Hollywood slate that’s, that’s set for this year. And so I think that that will obviously have growth there and and perform, so that’s built into the 1.2. And the last piece is local language. You know, I’d say and you’ve been around a long time. Local language used to be a very, low contributor to our model.

It was very it was low single digits. And now it’s 15 to 20% of our box office, and it continues to grow. Year to date, we’re already we’ve already exceeded our local language full year of 2024. So just from that perspective, we’re growing that too, and so you can see how easily our 1,200,000,000 was built.

Eric Handler, Media and Entertainment Analyst, Roth Capital: So let’s focus on China a little bit because China has had some stops and starts since, coming out of the pandemic. This year, record Chinese New Year, thanks to Nezhatu, which now has done $160,000,000,000

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: over $2,000,000,000 worldwide.

Eric Handler, Media and Entertainment Analyst, Roth Capital: So I mean, it’s amazing to think that there’s never been a movie that has done $1,000,000,000 in one specific market and this one’s done $2,000,000,000 in China. But in the sort of what have you done for me lately, investment community, Nezha, fantastic way to start the year. We don’t always have the best visibility into China. Is this a one off for China, or is China back and you have a lot of other good movies to look forward to as the year progresses?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Yeah. I think this is the beginning of a great year. Now do I think there’s another $2,000,000,000 movie coming out of there in one market? Maybe not. But, you never know.

I mean, we didn’t predict Nezha too for sure. And I did go and see it actually at Metrion in San Francisco, and it was fantastic. So I I think it feeds to all different, you know, demographics as well. But, and I and I can see why it’s doing so well. But I think part of that is we actually do have more visibility into the year too.

I mean, there’s, at least three Film for IMAX local language titles that we know of, and I might butcher the names. But, Dongji Island, Yiwu, and A Writer’s Odyssey two, I think, are the other three local language film for IMAX titles coming, that are scheduled to come out this year, along with the Hollywood slate. I mean, the Hollywood slate alone, there’s a there’s a handful of titles at a minimum in there that really do lend well to the consumer base in China. Zootopia, which I don’t think you would ever expect, but Zootopia has a really strong IP following in China that actually part of their theme park over there has a specific Zootopia area. So, we think that’ll do really well.

Obviously, Jurassic World, if you listen to I know you did, but if you listen to the earnings call, Rich actually mentioned a concept of creature features. And so what we found is, like, these creature features do really well in China. So Jurassic, the other one is How to Train Your Dragon, the live action, which actually I’m pretty excited about. I think it’s gonna do really well generally. And then, Mission, Tom Cruise always does well in China.

And then, you know, I think there’s a potential for f one as well-to-do really well, among there’s others others in the slate too.

Eric Handler, Media and Entertainment Analyst, Roth Capital: So while Hollywood is has definitely had a little bit of a tougher time post pandemic in China, You know, the market is still wants Hollywood movies, and this year hopefully is will show that Hollywood could still succeed in China.

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Yeah. I think what it comes down to is just like it is here in domestic, the consumers in China are discriminating as well. They want good content, and I can’t blame them for that. And so as good content comes across, we’ve seen. They will show up.

I mean, Nezhatu shows you that if there’s good content, they will come. And so we just need to provide that and and do that in a in a specific way. And we actually, Nezhatu, for instance, historically, on local languages generally in China, we would have indexed four to 5%. For this and then animation, we would have indexed only about 2%, so taken about 2% of the market share. For Nezha too, we’re at about we’re just over 7% of market share, which is amazing to see that how much, not only are consumers coming out to IMAX, but it’s because the studio is also leaning into IMAX and doing specific IMAX pushes as well.

And so from a marketing perspective, back to the way that our relationships with studios have evolved. But I think you couple that with our normal our normal performance on Hollywood titles in China. I mean, we’re usually mid teens in in China from a Hollywood perspective, from a market share, and so there’s that opportunity as well. And, so lots of growth to be had there too from just even the consumers coming out. So I think they’re there.

We just got to give them the content they want to see similar to North America.

Eric Handler, Media and Entertainment Analyst, Roth Capital: Yep. Now you also talked about a couple of the other drivers, local language content and alternative content. Obviously, you’ve been well associated with Chinese local language content. Where else are you seeing success in the world with local language content?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: We’ve seen a lot of success in India. We’ve we spent the pandemic really honing in on on trying to develop those relationships with local studios, which is why pre pandemic, you know, local language was a very low single digit contributor to our business. But, taking that time to build the relationships with local studios, we’ve been able to capture a lot of, growth in India from local language Japan. This year, we’re really excited about Demon Slayer. Demon Slayer is a very big IP in Japan, and, it’s it’s the first Demon Slayer was its top movie in Japan with 365,000,000, and the second one is coming out this year, which, we’re excited for.

And we’ve actually seen that in even the signings that have happened. I’ve mentioned earlier, we’ve had 10 signings already this year in Japan. We’ve grown our footprint. We’ve actually doubled our footprint in Japan over the past few years, and we continue to grow it, which, is all in relation to the local language growth. Because, actually, local language does better in Japan, just like in China where local language does better.

And so growing the footprint as we have more local language to provide to exhibitors is, it really helps the footprint growth too. Malaysia, we’ve seen a lot of growth, Indonesia from a local language perspective. And then we’re actually, it’s exciting because we’re actually doing our first Vietnamese and Arabic titles this year as well. And so, Rich and I were actually, in separate trips. We were in The Middle East in late twenty four, and, we just see it as a really good market for growth right now.

We’re only about 20% penetrated, and there’s a lot of excitement. And they like entertainment and out of home premium brand experiences. And so IMAX fits very well into that, economy as well.

Eric Handler, Media and Entertainment Analyst, Roth Capital: It does seem if if you are gonna be a true global company and you want to, you know, significantly grow, you’re gonna have to local language is gonna be a key because, you know, we said, I think in India, it’s like 90% local language. Japan is over 50%. So you’re really going to have to dig in on some of these markets if you want to truly succeed.

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Yeah. No. Exactly. And so we do have a part of our distribution team is actually we have built a local language team since the pandemic. And then we’ve built out what I meant to talk about earlier is we built out an actual process for remastering the content in a more efficient way in the cloud as well for local language because the issue with local language, studios is they actually deliver the content very late, so you don’t have a lot of time to work on it like you do for Hollywood.

Right? But, for us, because we’ve built this cloud based technology, we can essentially remaster it into that IMAX version of content in a much more efficient way. And so we have more access to more titles, basically, from a local language perspective. And that’s what’s been helping our growth in all the rest of world markets because, yes, Hollywood does well in the rest of world regions, but, really, they even in France and Germany and other countries, they want their local language content as well. And so that’s where we have an opportunity before us to have a lot of growth, coming in the future is from local language.

Eric Handler, Media and Entertainment Analyst, Roth Capital: Now what about with alternative content? Like, how how significant is is, alternative content these days? I mean, it seems like there’s always some one offs. You just had the Led Zeppelin movie, last year that Queens Rock Montreal. You do some stuff with a 24.

But what’s sort of, like, the specific strategy around alternative content and how meaningful could it be?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: I mean, going back to the local language piece, if you think about a handful of years, it was a very low contributor, like a couple percent, contributor to our model. There obviously is an currently a a small contributor to our model, low single digits. But an opportunity to grow that business, I mean, it comes back to that utilization point. How do you increase the utilization on your existing footprint? And that’s by giving, you know, these onetime only concert films, so becoming Led Zeppelin.

I mean, it’s our highest concert film so far to date at over 4 and a half million dollars. And we’re doing Pink Floyd in April. We did Queen Rock last year, But then also doing other events, like, what we found is the streaming platforms actually appreciate our very large distribution platform as a way to launch their series. And so, you know, we’ve done that with Amazon, like, the Fallout series. They’ve used us to launch their series.

We’ve done, Japanese content. I think it was Demon Slayer. We did a couple episodes of that as they launched their new season as well, and so, lots of opportunity there. Plus, we do our live q and a’s. And then, the last Wednesday, I believe, or Thursday of every month, we have a partnership with a twenty four where we essentially, bring back an iconic a twenty four title into this into the theaters.

And what it’s done is created higher utilization for that one show than you would have had if it was, like, week three of Mickey 17, for instance. Right? And so getting your getting the ability to create more profitability on your existing footprint, and then you, you know, you couple that with adding adding in other types of content like esports. League of Legends, we did in China, in Korea across a 50 locations, and it was 90% capacity. There’s and what’s great about that model is you’re bringing new consumers to the IMAX experience because, like, we we did exit surveys and polls.

Most of those individuals who went to the League of Legends event had never been in an IMAX location before. And so now when they go to the movies, they understand the experience of IMAX, and now you have a new fan base. Right? And so I think what’s great is it’s creating this, this opening the aperture and and giving new content, but then getting new consumers into. And then I think it was even last week, we did Le Classique in France, which is, soccer, across, a handful of screens, and they were sold out within twenty four hours.

And so lots of opportunity because sports is a really big area too. Right?

Eric Handler, Media and Entertainment Analyst, Roth Capital: Okay. We’re quickly running out of time, but we’ve spent a lot of time talking about revenue. But I think one of the underappreciated aspects of your business is there’s a significant amount of operating leverage. You’re now approaching 40% adjusted EBITDA margin. Can you maybe in thirty seconds or less, quickly talk about the opportunity for margin expansion in your business?

Natasha Fernandez, Chief Financial Officer, IMAX Corporation: Yeah. For sure. I mean, as you grow box office, we don’t we actually have a fixed cost base. And so as you grow box office, we don’t have to spend more on film remastering costs or marketing or any of that. And so all of that falls straight to the bottom line.

You know, you you can see it straight go to margin and to EBITDA and to cash. And, the other part is we’ve spent a lot of time, and I’ve spent a lot of time personally, on expense discipline and, focus focusing all of our management on that. And so we’ve actually that’s how we achieved our 39% EBITDA margin in 2024. And, and we’re continuing to reduce our cost base so that we can let all of those additional dollars fall through. And you’ve seen it, like the Oppenheimer quarter, for instance, we had EBITDA margin of 48%.

So there is a very large opportunity for us ahead with respect to operating leverage.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.