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IMAX Q3 EPS hit 47 cents, beating estimates by 23.68% and rising 34.3% year over year.
Revenues grew 16.6% to $106.7M, powered by rentals, finance income and $368M in global box office.
Gross margin expanded 740 bps to 63.1%, with EBITDA up 35% and SG&A down 6% year over year.
IMAX Corporation (IMAX - Free Report) reported third-quarter 2025 adjusted earnings of 47 cents per share, which beat the Zacks Consensus Estimate by 23.68% and increased 34.3% year over year.
Total revenues of $106.7 million beat the Zacks Consensus Estimate by 3.16% and increased 16.6% year over year.
Category-wise, Technology Sales decreased 26.4% year over year to $19.4 million. Image Enhancement & Maintenance Services, Technology Rentals and Finance Income increased by 30.2%, 44.8% and 37.2% to $61 million, $23.3 million and $2.9 million, respectively.
Segment-wise, Content Solutions revenues increased 49% year over year to $44.8 million in the third quarter of 2025.
Technology Products and Services revenues rose 4% year over year to $60.4 million. All Other revenues declined 58.2% year over year to $1.4 million.
Within Content Solutions Business, Film Remastering and Distribution revenues increased 49% year over year to $44.8 million. The segment achieved a record gross margin of 71%, expanding 1,600 basis points from 55% in the third quarter of 2024. This remarkable margin expansion demonstrates the significant operating leverage in IMAX's business model as box office scales to higher levels.
The third quarter box office, including booking fees in China, reached $368 million, increasing 50% year over year. F1: The Movie was the highest-grossing Hollywood release of the year with $97 million worldwide to date, capturing more than 15% of the film's total box office on less than 1% of screens. Demon Slayer: Infinity Castle became IMAX's biggest Japanese film of all time with $73 million to date and delivered IMAX's biggest September opening ever in North America. Four blockbuster openings, including Sinners, Mission Impossible: The Final Reckoning, F1 and Tron Ares, generated at least 20% of the domestic opening weekend box office.
Technology Products and Services Details
Within the Technology Products and Services segment, System Sales were $19.4 million, down 7.4% year over year. System Rental revenues increased 34.4% year over year to $23.3 million.
Maintenance revenues were $16.7 million, up 5.4% year over year. Finance Income revenues were $2.9 million in the reported quarter, up 24.4% year over year.
Network Growth Statistics of IMAX
During the third quarter of 2025, IMAX installed 38 systems compared with 49 systems in the third quarter of 2024. The company is now at approximately 100 system installations.
As of Sept. 30, 2025, 1,829 IMAX Systems were operating in 89 countries and territories, including 1,759 commercial multiplexes, 10 commercial destinations and 60 institutional locations. The commercial multiplex network comprises 854 systems under sales arrangements, 119 hybrid joint revenue sharing arrangements and 786 traditional joint revenue sharing arrangements.
IMAX currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which 1,759 IMAX Systems are operating as of Sept 30, 2025, representing a market penetration of 48%. Approximately 74% of IMAX System arrangements in backlog as of Sept. 30, 2025, are scheduled to be installed in international markets compared to 82% in the year-ago quarter.
System signings in the third quarter totalled 19 systems, including 15 sales arrangements and four traditional joint revenue-sharing arrangements.
Total system backlog as of Sept. 30, 2025, stood at 478 systems comprising 157 sales arrangements, 94 hybrid joint revenue sharing arrangements and 227 traditional joint revenue sharing arrangements.
Operating Details
Gross margin expanded 740 basis points (bps) to 63.1% in the third quarter of 2025. Content Solutions' gross margin expanded 1,600 bps to 71% while Technology Products and Services' gross margin expanded 250 bps to 58% in the third quarter.
Adjusted EBITDA per Credit Facility was $48 million, up 35% year over year.
Selling, general and administrative expenses decreased 6% year over year to $34.2 million. Research and development expenses were down 24.1% to $1.5 million.
IMAX reported an operating income of $29 million, which surged 50% year-over-year, driven by strong box office performance and margin expansion.
Net cash provided by operating activities in the third quarter of 2025 reached $67.5 million, up more than 90% year over year, reflecting improvements in working capital driven by higher collections and the timing benefits from strong first-half box office titles.
Balance Sheet & Cash Flow
Net cash provided by operating activities for the nine months of 2025 increased 65% year over year to $98 million. Free cash flow before growth CapEx reached $87 million for the nine months, representing 68% adjusted EBITDA conversion rate.
As of Sept. 30, 2025, IMAX's available liquidity was $544 million. The company's liquidity includes $143 million in cash and cash equivalents, $346 million in available borrowing capacity under the Credit Facility and $55 million in available borrowing capacity under IMAX China's revolving facilities. Total debt, excluding deferred financing costs, was $261 million.
In July 2025, the company renewed and expanded its senior secured revolving credit facility from $300 million to $375 million with reduced borrowing costs. In 2021, the company issued $230 million of 0.500% Convertible Senior Notes due April 2026. IMAX entered into privately negotiated capped call transactions with an initial cap price of $37.27 per share.
The weighted average basic and diluted shares outstanding in the third quarter of 2025 were 53.8 million and 55.6 million compared with 52.7 million and 54.1 million in the third quarter of 2024, representing increases of 2.3% and 3.4%, respectively.
For the nine months ended Sept. 30, 2025, IMAX China repurchased 1,495,900 common shares at an average price of HKD 7.56 per share for a total of HKD 11.3 million ($1.4 million), excluding commissions.
The company is authorised under its share-repurchase program, which was extended in June 2025, expiring June 30, 2027, to repurchase up to $500 million of its common shares, of which approximately $251 million remains available.
Growth CapEx for joint revenue sharing arrangements totalled $24 million year-to-date.
Guidance
IMAX expects to deliver a record box office of more than $1.2 billion in 2025, along with a total adjusted EBITDA margin in the low 40% range, and system installations of 150 to 160 (now tracking to the high end of this range).
The fourth quarter slate includes Avatar: Fire and Ash in December, Wicked: For Good and Zootopia 2 for Thanksgiving, Predator: Badlands and The Running Man in November and alternative content including Depeche Mode concert, League of Legends gaming tournament with 219 China locations, Stones at the Max re-release and Guillermo Del Toro's Frankenstein Netflix partnership event.
For 2026, IMAX highlighted four massive tentpoles: Christopher Nolan's The Odyssey with IMAX 70mm run, Greta Gerwig's IMAX Exclusive Narnia, Star Wars: The Mandalorian and Grogu and Dune: Part Three with IMAX 70mm run. Additional 2026 titles include Super Mario Galaxy Movie, Toy Story 5 and Avatar: Fire and Ash carryover into the first quarter of 2026.
Image: Bigstock
IMAX Q3 Earnings Surpass Expectations, Revenues Increase Y/Y
Key Takeaways
IMAX Corporation (IMAX - Free Report) reported third-quarter 2025 adjusted earnings of 47 cents per share, which beat the Zacks Consensus Estimate by 23.68% and increased 34.3% year over year.
Total revenues of $106.7 million beat the Zacks Consensus Estimate by 3.16% and increased 16.6% year over year.
Category-wise, Technology Sales decreased 26.4% year over year to $19.4 million. Image Enhancement & Maintenance Services, Technology Rentals and Finance Income increased by 30.2%, 44.8% and 37.2% to $61 million, $23.3 million and $2.9 million, respectively.
Segment-wise, Content Solutions revenues increased 49% year over year to $44.8 million in the third quarter of 2025.
Technology Products and Services revenues rose 4% year over year to $60.4 million. All Other revenues declined 58.2% year over year to $1.4 million.
IMAX Corporation Price and Consensus
IMAX Corporation price-consensus-chart | IMAX Corporation Quote
Content Solutions Business Details of IMAX
Within Content Solutions Business, Film Remastering and Distribution revenues increased 49% year over year to $44.8 million. The segment achieved a record gross margin of 71%, expanding 1,600 basis points from 55% in the third quarter of 2024. This remarkable margin expansion demonstrates the significant operating leverage in IMAX's business model as box office scales to higher levels.
The third quarter box office, including booking fees in China, reached $368 million, increasing 50% year over year. F1: The Movie was the highest-grossing Hollywood release of the year with $97 million worldwide to date, capturing more than 15% of the film's total box office on less than 1% of screens. Demon Slayer: Infinity Castle became IMAX's biggest Japanese film of all time with $73 million to date and delivered IMAX's biggest September opening ever in North America. Four blockbuster openings, including Sinners, Mission Impossible: The Final Reckoning, F1 and Tron Ares, generated at least 20% of the domestic opening weekend box office.
Technology Products and Services Details
Within the Technology Products and Services segment, System Sales were $19.4 million, down 7.4% year over year. System Rental revenues increased 34.4% year over year to $23.3 million.
Maintenance revenues were $16.7 million, up 5.4% year over year. Finance Income revenues were $2.9 million in the reported quarter, up 24.4% year over year.
Network Growth Statistics of IMAX
During the third quarter of 2025, IMAX installed 38 systems compared with 49 systems in the third quarter of 2024. The company is now at approximately 100 system installations.
As of Sept. 30, 2025, 1,829 IMAX Systems were operating in 89 countries and territories, including 1,759 commercial multiplexes, 10 commercial destinations and 60 institutional locations. The commercial multiplex network comprises 854 systems under sales arrangements, 119 hybrid joint revenue sharing arrangements and 786 traditional joint revenue sharing arrangements.
IMAX currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which 1,759 IMAX Systems are operating as of Sept 30, 2025, representing a market penetration of 48%. Approximately 74% of IMAX System arrangements in backlog as of Sept. 30, 2025, are scheduled to be installed in international markets compared to 82% in the year-ago quarter.
System signings in the third quarter totalled 19 systems, including 15 sales arrangements and four traditional joint revenue-sharing arrangements.
Total system backlog as of Sept. 30, 2025, stood at 478 systems comprising 157 sales arrangements, 94 hybrid joint revenue sharing arrangements and 227 traditional joint revenue sharing arrangements.
Operating Details
Gross margin expanded 740 basis points (bps) to 63.1% in the third quarter of 2025. Content Solutions' gross margin expanded 1,600 bps to 71% while Technology Products and Services' gross margin expanded 250 bps to 58% in the third quarter.
Adjusted EBITDA per Credit Facility was $48 million, up 35% year over year.
Selling, general and administrative expenses decreased 6% year over year to $34.2 million. Research and development expenses were down 24.1% to $1.5 million.
IMAX reported an operating income of $29 million, which surged 50% year-over-year, driven by strong box office performance and margin expansion.
Net cash provided by operating activities in the third quarter of 2025 reached $67.5 million, up more than 90% year over year, reflecting improvements in working capital driven by higher collections and the timing benefits from strong first-half box office titles.
Balance Sheet & Cash Flow
Net cash provided by operating activities for the nine months of 2025 increased 65% year over year to $98 million. Free cash flow before growth CapEx reached $87 million for the nine months, representing 68% adjusted EBITDA conversion rate.
As of Sept. 30, 2025, IMAX's available liquidity was $544 million. The company's liquidity includes $143 million in cash and cash equivalents, $346 million in available borrowing capacity under the Credit Facility and $55 million in available borrowing capacity under IMAX China's revolving facilities. Total debt, excluding deferred financing costs, was $261 million.
In July 2025, the company renewed and expanded its senior secured revolving credit facility from $300 million to $375 million with reduced borrowing costs. In 2021, the company issued $230 million of 0.500% Convertible Senior Notes due April 2026. IMAX entered into privately negotiated capped call transactions with an initial cap price of $37.27 per share.
The weighted average basic and diluted shares outstanding in the third quarter of 2025 were 53.8 million and 55.6 million compared with 52.7 million and 54.1 million in the third quarter of 2024, representing increases of 2.3% and 3.4%, respectively.
For the nine months ended Sept. 30, 2025, IMAX China repurchased 1,495,900 common shares at an average price of HKD 7.56 per share for a total of HKD 11.3 million ($1.4 million), excluding commissions.
The company is authorised under its share-repurchase program, which was extended in June 2025, expiring June 30, 2027, to repurchase up to $500 million of its common shares, of which approximately $251 million remains available.
Growth CapEx for joint revenue sharing arrangements totalled $24 million year-to-date.
Guidance
IMAX expects to deliver a record box office of more than $1.2 billion in 2025, along with a total adjusted EBITDA margin in the low 40% range, and system installations of 150 to 160 (now tracking to the high end of this range).
The fourth quarter slate includes Avatar: Fire and Ash in December, Wicked: For Good and Zootopia 2 for Thanksgiving, Predator: Badlands and The Running Man in November and alternative content including Depeche Mode concert, League of Legends gaming tournament with 219 China locations, Stones at the Max re-release and Guillermo Del Toro's Frankenstein Netflix partnership event.
For 2026, IMAX highlighted four massive tentpoles: Christopher Nolan's The Odyssey with IMAX 70mm run, Greta Gerwig's IMAX Exclusive Narnia, Star Wars: The Mandalorian and Grogu and Dune: Part Three with IMAX 70mm run. Additional 2026 titles include Super Mario Galaxy Movie, Toy Story 5 and Avatar: Fire and Ash carryover into the first quarter of 2026.
Zacks Rank & Other Stocks to Consider
IMAX currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks that investors can consider in the broader Zacks Consumer Discretionary sector are Fox (FOX - Free Report) , Peloton Interactive (PTON - Free Report) and Rush Street Interactive (RSI - Free Report) .
Fox, Peloton Interactive and Rush Street Interactive currently flaunt a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Rush Street Interactive is set to report third-quarter 2025 results on Oct. 29.
Fox and Peloton Interactive are set to report first-quarter fiscal 2026 results on Oct. 30.