FY25 Closed at $1.28B Global Box Office (vs $1.2B Original Guide), 45% EBITDA Margin (Above Low-40s Guide), Record $1.45 EPS (+53%), Record $127M Operating Cash Flow; FY26 Guide $1.4B Box Office / 160-175 Installs / 45% Margin Floor; Through-2028 Framework: High-Single-to-Low-Double-Digit Revenue CAGR, 50%+ EBITDA Margin, EPS Growth 2x Revenue, FCF Conversion ~50% Growing; $250M New Convert at 0.75% Refinanced With $46M Cash Outlay (Effectively a Share Buyback) and Capped-Call to $57 — Maintaining Outperform

Coverage Update from Q3

Our Q3 recap maintained Outperform at ~$34 with a $36-$46 fair value range and identified the December 4 Investor Day as the central near-term catalyst. We expected the Investor Day to deliver: (a) explicit FY26 box-office guide ($1.4-1.5B base case); (b) multi-year EBITDA margin trajectory (45%+ → 50%+); (c) capital allocation framework; (d) network growth roadmap with explicit TAM. The Q4/FY25 print + the Investor Day framework + the convert refinancing deliver on every expectation:

• FY26 box-office guide came in at $1.4B (low end of our $1.4-1.5B range; appropriate given the company's history of beating guidance — we read this as conservatively set)
• Multi-year EBITDA margin trajectory: 45% FY25 → "over 50% by 2028" formalized at Investor Day
• Through-2028 framework: high-single-to-low-double-digit revenue CAGR, EPS growth 2x revenue, FCF conversion ~50% growing
• $57 capped-call conversion price on the new convert (vs. our $48 base case at initiation; an even better outcome)
• $46M cash outlay to take out the old convert at a premium is the explicit dilution-reduction signal — management was willing to pay to avoid 4M+ shares of dilution at the $37 conversion price
• TAM expanded to 4,500 global zones (vs. ~2,000 previously articulated) — double the current network + backlog

The framework presentation deliveries are cleaner than we anticipated, particularly on the convert refinancing and the through-2028 margin trajectory.

Results vs. Consensus — Q4 / FY25

Q4 Scorecard

FY25 Full Year vs. Original Guidance

FY25 vs. FY24 YoY

Quality-of-Print Callout

Segment Performance — FY25 Full Year

Content Solutions (FY25 revenue +21% / 66% gross margin / +1,260bp YoY)

Content Solutions is now visibly the operating-leverage engine of IMAX. FY25 gross margin of 66% expanded +1,260bp from 53% in 2024 — a magnitude of expansion that is extraordinary for any business at the segment level. The 66% gross margin reflects the structural reality that, once a film is remastered for IMAX, the incremental box-office dollars convert to margin at very high rates (90%+). The 21% revenue growth on +40% box office reflects the still-mixed split economics across the global network — North America box office contributes a higher Content Solutions revenue share than China; the global box-office mix shift toward local-language is a positive for the Tech P&S segment but slightly compressed the Content Solutions revenue conversion rate.

Q4 Content Solutions revenue grew 50% YoY — a particularly strong outcome given that Q4 included Avatar: Fire and Ash IMAX-specific marketing investment that was characterized as a "pull-forward" for the Q1 2026 carryover. The Q4 mix was anchored on the Avatar tentpole; the segment will need to lap Avatar's December-launch indexing in Q4 2026 against a slate that does not have an obvious equivalent.

Assessment: Content Solutions has structurally inflected. The 66% FY25 gross margin is the base rate for FY26 — we model the segment at 65-68% gross margin in FY26 with potential upside if the local-language take-rate dynamics continue to favor IMAX in China. The 71% Q3 record gross margin will be matched or exceeded in any quarter that delivers $350M+ of box office (Q1 2026 will be the first test, with Avatar carryover dynamics intact).

Technology Products & Services (FY25 revenue +16% / 57% gross margin / +400bp YoY)

Tech P&S delivered $X revenue growth of 16% YoY with gross margin expanding 400bp to 57%. The growth came from three sources: (a) the 160 system installs (10% network expansion), (b) higher box-office-driven rental revenue from the JRSA-mix install base, and (c) growing maintenance revenue across the 1,750+ global network. Q4 installs of 65 systems is the highest single-quarter install count in recent memory, with the install timing positioning Q1 2026 for full-quarter contribution from the newly-installed footprint.

The mix between sales-type and JRSA installations is structurally flexible. The CFO noted that 25%+ of FY25 signings were both signed and installed within the same year — an unusually fast cycle that reflects exhibitor urgency to capture FY26 box-office indexing. For FY26, the company is guiding a 45%-55% sales-to-JV mix on the 160-175 installation guide; the JV-mix portion is the one that captures the multi-year box-office sharing economics.

Assessment: Tech P&S is now visibly diversifying away from the historical AMC/Wanda concentration. The 257 partner count (+28% above 2019) and the 2025 signings spread across 14+ countries reduce single-counterparty risk. The mix shift toward JRSA-heavy markets (Japan, France, Germany) where box-office indexing is strongest captures more long-term economics. The Q4 install run-rate of 65 systems supports the FY26 160-175 install guide as achievable with upside.

FY26 Guidance Framework

The FY26 guide is structurally conservative. The $1.4B box-office target represents +9% growth off the FY25 record — well below the +40% growth in FY25. The company's history is to beat guidance (FY25 actual $1.28B vs. $1.2B original guide). Our base case is FY26 box office of $1.45-1.55B (+13-21%), with the upside driven by (a) The Odyssey indexing well above the FFI base rate; (b) Dune Part 3 IMAX 70mm-eligible indexing; (c) the streamer-launch dynamics on Project Hail Mary, Narnia, and the live F1 broadcast.

Through-2028 Framework (Investor Day Articulation)

The through-2028 framework is the most important multi-year articulation IMAX has provided since 2017. The framework implies:

• FY28 revenue of ~$520-560M (vs. FY25's $410M) at the high single to low double-digit CAGR
• FY28 adjusted EBITDA of ~$275-310M at 50%+ margin
• FY28 adjusted EPS of ~$2.50-3.00 at the 2x-revenue growth multiplier
• FY28 free cash flow of ~$135-175M at the ~50%+ FCF conversion
• Cumulative through 2028: ~$700M+ of free cash flow available for capital return + network investment

Capital Structure — The Convert Refinancing

The November 2025 capital structure transaction is the cleanest piece of execution from the IMAX team in this cycle. The mechanics:

The strategic outcome is multi-layered. (a) The April 2026 convert overhang — the lone capital-structure overhang on the IMAX thesis — is eliminated. (b) The new convert is issued at a meaningfully higher conversion price ($57 vs. $37), capturing 50%+ of the operational re-rate from the original 2021 issuance. (c) The $46M cash outlay to retire the old convert at a premium effectively buys back ~1.3M shares of dilution (assuming the old convert would have converted at the $37 strike), which the CFO framed as "akin in some respects to that of a share repurchase." (d) The new convert at 0.75% remains extremely attractive financing cost, well below comparable senior unsecured rates.

Key Topics & Management Commentary

Overall Management Tone: Confident and forward-leaning, with the CEO treating the FY25 close as confirmation of a multi-year framework rather than as a single-year achievement. The Investor Day articulation has been integrated into the prepared remarks — every operational metric is now framed in the context of the through-2028 trajectory. The convert refinancing is presented as a strategic accomplishment rather than a defensive maneuver.

1. The FY25 Close Is the Articulation of a Multi-Year Inflection

"2025 was a truly transformational year for the company in which we firmly established IMAX as a premier global platform for entertainment and events with a powerful position among out-of-home experiences and a content pipeline that continues to grow richer and more diverse. We finished with a record $1.28 billion in global box office, up 40% year-over-year. We captured our biggest share of the global box office ever, up 700 basis points year-over-year. We achieved our highest grossing year ever for local language films with $405 million worldwide with 67 international releases from 14 countries."
— Richard Gelfond, CEO

The CEO's framing of FY25 is unusually direct — "transformational," "firmly established," "premier global platform." This is the language of a company that views the structural inflection as confirmed and irrevocable, not as a single-year cycle peak. The FY25 metrics support that framing: every guidance measure beaten; $1.28B box office is the highest in IMAX history; 3.8% global market share on <1% of screens is structural over-indexing; $405M local-language box office (+100%+ above FY23 record) is a third pillar of the model that did not exist three years ago.

Assessment: The "transformational" framing is justified by the metrics. The risk is that the FY25 cycle peak does not fully sustain — but the multi-year framework (high-single-to-low-double-digit revenue CAGR through 2028) explicitly accommodates a slightly slower growth pace post the +40% FY25 base. The base case is FY26 box office of $1.4-1.5B (low end of management guide to mid-point of our estimate range) and a continuing sustainable growth trajectory.

2. The FY26 Guide Anchored in Slate Specificity

"We expect another outstanding year in 2026 with a projected $1.4 billion in global box office, 160 to 175 system installations worldwide and total adjusted EBITDA margin in the mid-40s range with a floor of 45%. And through 2028, we aim to drive revenue growth at high single to low double-digit compound annual growth rate, adjusted EBITDA margin of over 50% by 2028, adjusted EPS growth at twice the rate of revenue and free cash flow conversion of approximately 50% in 2026 and growing."
— Richard Gelfond, CEO

The FY26 guide is set on box office specifics, not on trend extrapolation. The slate already includes: at least 12 FFI titles globally (vs. 7 in summer 2025 + Avatar); The Odyssey (Christopher Nolan, first feature shot entirely with IMAX film cameras, 40 70mm locations vs. 30 for Oppenheimer); Dune Part 3; Project Hail Mary (Amazon FFI, March release); Mandalorian and Grogu; Toy Story 5; Super Mario Galaxy Movie; Narnia (Netflix exclusive theatrical); Avatar: Fire and Ash carryover from Q4 2025 into Q1 2026.

For 2027, the company is already 60% booked with FFI titles including Joe Kosinski's Miami Vice, Star Wars: Starfighter, Michael B. Jordan's Thomas Crown Affair, Avengers: Secret Wars, The Batman 2.

Assessment: The FY26 guide is structurally conservative. The +9% box-office growth target off the +40% FY25 base is consistent with a multi-year sustainable pace, not with a slate that includes multiple anticipated mega-tentpoles. Our base case is FY26 box office of $1.45-1.55B (+13-21%), with the variance driven by The Odyssey indexing trajectory (could be FFI's biggest title ever) and the streamer-launch dynamics on Project Hail Mary and Narnia.

3. The Through-2028 Framework Is the Multi-Year Articulation

"We believe we are far from our peak, but rather in a period of evolution and growth. With superior immersive technology and unmatched scale, IMAX is the premier global platform for blockbuster content and blockbuster content continues to grow in importance across the global ecosystem."
— Richard Gelfond, CEO

The through-2028 framework presented at Investor Day and reiterated in the Q4 prepared remarks is the most important multi-year framework articulation IMAX has provided since 2017. The four explicit targets — revenue CAGR (high-single-to-low-double-digit), EBITDA margin (50%+ by 2028), EPS growth (2x revenue), and FCF conversion (~50% and growing) — collectively define a structurally higher-quality business than was visible to investors at the start of 2025.

The framework implies a path to FY28 revenue of ~$520-560M, FY28 EBITDA of ~$275-310M, and FY28 EPS of ~$2.50-3.00. The cumulative free cash flow through 2028 (FY26 + FY27 + FY28) is estimated at $300-400M — substantial capital that supports network investment, opportunistic buyback, and dividend optionality.

Assessment: The framework is achievable. The path to 50%+ EBITDA margin by 2028 is anchored in (a) the structural operating leverage (~85% incremental EBITDA conversion above the $250M quarterly box-office threshold), (b) the deliberate flat-OpEx posture, and (c) the structural improvement in Content Solutions gross margin (already at 66% in FY25, with quarterly peaks at 71%). Our model arrives at FY28 EBITDA margin of 48-50% with reasonable assumptions — close enough to the management framework that we view the target as credible rather than aspirational.

4. The Convert Refinancing as Strategic Capital Allocation

"In November, we refinanced our 2021 convertible notes with $250 million of new convertible notes at a very attractive 0.75% interest rate. And through this transaction, we simultaneously retired the vast majority of the 2021 notes with cash of $46 million to minimize dilution. Importantly, we also entered into a capped call on the new notes, raising the effective conversion price from a company dilution standpoint to $57 per share. Together, the cash payment for the outperformance in the 2021 notes and the new capped call equates to approximately $70 million, strategically spent to maximize the opportunity for shareholders to benefit from the growth we expect in the coming years and in our view, is akin in some respects to that of a share repurchase."
— Natasha Fernandes, CFO

The convert refinancing was executed in November 2025 — between the Q3 earnings print and the December 4 Investor Day. The mechanics: $250M of new convertible notes at 0.75% coupon, issued into market demand, simultaneously retiring the $230M of 2021 notes for $46M of cash above the $37 conversion price (which by that point was deep in-the-money given IMAX trading at $32-35). The capped call structure raised the effective conversion price to $57 — a meaningful premium that captures 50%+ of the operational re-rate from 2021 to 2025.

The CFO's framing of the $46M+$24M (capped call cost) total ~$70M as "akin in some respects to that of a share repurchase" is precise: the cash outlay removed dilution that would have otherwise materialized at the $37 conversion price. The economic equivalent is buying back ~1.3M shares at $35 (vs. converting at $37). The strategic outcome is that IMAX captured the operational re-rate value before it would have been captured by the convert holders.

Assessment: The convert refinancing is the cleanest piece of capital allocation execution from the IMAX team in this cycle. It eliminated the lone overhang on the equity story, captured 50%+ of the operational re-rate value, locked in a $57 capped-call conversion price that provides meaningful headroom for further equity appreciation before dilution attaches, and accomplished it all with attractive financing cost (0.75% coupon). The strategic optionality going forward is enhanced rather than diminished by the transaction.

5. The Local-Language Strategy Has Compounded Into a Third Pillar

"We achieved our highest grossing year ever for local language films with $405 million worldwide with 67 international releases from 14 countries, including 2 of our top 5 in Ne Zha 2 and Demon Slayer: Infinity Castle."
— Richard Gelfond, CEO

The local-language metrics are extraordinary on multiple dimensions:

• $405M FY25 local-language box office vs. $244M FY23 prior record (+66%; the previous "record" was the most ambitious metric the company had cited)
• 67 international releases from 14 countries (vs. ~25-30 historically)
• 2 of the top 5 FY25 IMAX titles were local-language (Ne Zha 2, Demon Slayer)
• Geographic breadth: Japan, China, Korea, India, Germany, France, Indonesia, Malaysia, Saudi Arabia, others

For FY26, the local-language strategy is now sourcing FFI-quality content: the first FFI titles from Japan (Godzilla Minus Zero) and India (Ramayana Part 1) are confirmed for FY26 releases, with Indian sequel Varanasi and additional Japanese FFI titles forming the 2027 pipeline.

Assessment: The local-language strategy is now visibly the third structural pillar of the IMAX thesis (alongside the FFI program and the global network). The FY25 mix at 36% of global box office (vs. less than 20% in 2024) is structurally sustainable; we expect 35-40% mix for FY26 with potential upside if the Indian and Japanese FFI titles deliver beyond expectations. Critically, local-language take rates in China are higher than Hollywood take rates per the CEO's prior commentary — the mix shift is margin-accretive.

6. The FY26 Slate Is Anchored on The Odyssey

"The slate for '26 is arguably the strongest we've ever seen, highlighted by massive films for IMAX tentpoles, headlining a record of at least 12 films for IMAX releases worldwide, including Christopher Nolan's The Odyssey, the first theatrical feature shot entirely with IMAX film cameras. Tickets for select IMAX 70-millimeter showings sold out a full year in advance, and we will have 40 film locations for Odyssey's debut in July."
— Richard Gelfond, CEO

The Odyssey is the FY26 anchor. The metrics are exceptional: first feature ever shot entirely with IMAX film cameras (vs. Oppenheimer which was shot partially with IMAX film); 40 IMAX 70mm locations vs. 30 for Oppenheimer (+33% capacity); IMAX 70mm tickets sold out 12 months in advance. The combination of (a) the deepest filmmaker-IMAX collaboration in history, (b) increased 70mm exhibition capacity, and (c) presold demand at a 12-month forward window suggests The Odyssey could be the highest indexing FFI title in IMAX's history.

The remainder of the FY26 slate provides backup-tentpole optionality: Mandalorian and Grogu (Jon Favreau, May), Dune Part 3 (Denis Villeneuve, December), Project Hail Mary (Amazon FFI, March), Narnia (Greta Gerwig Netflix FFI, Q4). Family slate: Super Mario Galaxy Movie, Toy Story 5, Minions & Monsters, live-action Moana. Genre/horror: Mortal Kombat 2, Resident Evil. Local-language: Godzilla Minus Zero (Japan FFI), Ramayana Part 1 (India FFI).

Assessment: The Odyssey is the FY26 catalyst. Beat-the-Oppenheimer indexing on Odyssey would justify FY26 box office upside to $1.5B+. The Dune Part 3 + Mandalorian + Narnia + family slate provides multi-quarter resilience even if Odyssey performs in line rather than over. Our FY26 base case of $1.45-1.55B box office is achievable; the upside scenario is $1.55-1.65B if Odyssey indexes above 18% globally.

7. The Domestic Network Growth Is Re-Energizing

"In 2025 alone, we struck agreements with each of the biggest exhibitors in the U.S., AMC, Cinemark and Regal, that advance key strategic priorities, including new locations in Los Angeles and New York with Regal and 3 new IMAX 70-millimeter film locations with Cinemark. … We are still deeply underpenetrated in many [zones], presenting an opportunity to grow within our best market centers. For instance, we have only 5 IMAX locations serving a population of 1.6 million people in Manhattan, including our first new location in 15 years set to open in Battery Park."
— Richard Gelfond, CEO

Domestic install growth of 4% in FY25 (50+ net new locations across the AMC/Regal/Cinemark trio plus 5 new Apple Cinemas locations) refutes the bear narrative that the US market is mature. The structural opportunity is "second IMAX in zones we already serve" — the Manhattan example (5 locations for 1.6M people) is the cleanest illustration. Battery Park is the first new Manhattan location in 15 years; Chicago, Boston, San Antonio, San Jose are all flagged as next-tier expansion targets.

The 3 new IMAX 70mm film locations with Cinemark are particularly important — they add to the 40-location 70mm footprint for The Odyssey and beyond, supporting future FFI shooter-director collaborations.

Assessment: The domestic network is structurally under-penetrated despite the perception of maturity. The 257 partner count and the multi-decade-relationship economics with the major chains (AMC, Regal, Cinemark, plus emerging partners Apple Cinemas) support continued network growth. The 4% FY25 domestic install growth is achievable as a sustained rate for the next 3-5 years; combined with rest-of-world's 8%+ growth, the total network growth trajectory supports the through-2028 revenue CAGR target.

8. The Streamer-Theatrical Flywheel Is Structurally Established

"And finally, Barbie Director Greta Gerwig's Narnia, a pioneering partnership with Netflix that we believe will deliver greater value to our exhibition partners. … Apple to stream live broadcast of Formula 1 World Championship races to IMAX locations this season and delivering a very successful exclusive opening of Baz Luhrmann's Elvis Doc EPiC."
— Richard Gelfond, CEO

The streamer-IMAX partnerships have matured into a structural revenue category:

• Apple: F1 ($97M FY25 IMAX), Formula 1 live race broadcasts to IMAX locations (FY26), Joe Kosinski Miami Vice 2028 FFI confirmed (Apple-affiliated)
• Amazon: Project Hail Mary March 2026 FFI release, James Bond next installment from Denis Villeneuve (Amazon MGM)
• Netflix: Greta Gerwig Narnia FY26 exclusive IMAX theatrical run, Frankenstein promotional event partnership

The economics are structurally favorable to IMAX. Streamers cannot replicate the cultural-event launch dynamics that IMAX delivers; they are willing to pay premium economics for the access. Importantly, these partnerships are sourcing IMAX content that would not otherwise exist in the theatrical-tentpole calendar — Narnia and Hail Mary are projects that conventional studios would likely have routed direct-to-streaming.

Assessment: The streamer flywheel is the most under-modeled revenue lever for IMAX in 2026 and beyond. We expect 4-6 streamer-led IMAX releases per year through 2027, contributing $200-300M to annual IMAX box office. The economics support the FY26 EBITDA margin trajectory and provide structural growth optionality.

9. The Avatar Carryover Trajectory Into Q1 2026

"Avatar: Fire and Ash extended our success with that franchise, earning more than $188 million in IMAX, our sixth highest grossing release of all time and our highest indexing of the series with 13% worldwide."
— Richard Gelfond, CEO

Avatar: Fire and Ash through the Q4-print update (post-late February 2026) has earned $188M in IMAX globally. The film is IMAX's 6th highest grossing release of all time. Critically, the 13% global indexing is the highest for any Avatar release — beating both Avatar (2009) and Avatar: The Way of Water (2022). The Avatar-IMAX brand association is structurally compounding.

Q1 2026 will see Avatar carryover dynamics through January-February before transitioning to Project Hail Mary (FFI, March release). The Chinese New Year delivered $28M IMAX on Pegasus 3 — IMAX's biggest Chinese title since Ne Zha 2 (which generated $160M+ in Q1 2025). The Q1 2026 China comp will be meaningfully lower than Q1 2025; this is a known headwind that the FY26 guide accommodates.

Assessment: The Avatar carryover supports the Q1 2026 setup. The 13% Avatar indexing (vs. ~11% for The Way of Water) is the cleanest cross-cycle empirical signal that IMAX's value-add to the Avatar franchise is structural and compounding. Disney's positioning of IMAX-exclusive Avatar content in marketing supports this dynamic.

10. The 2027 and 2028 Slate Buildup

"We are already 60% booked for 2027 with blockbusters, including Top Gun: Maverick and F1 Director Joe Kosinski's Miami Vice, which will be filmed for IMAX; Star Wars: Starfighter from Deadpool and Wolverine Director Shawn Levy. The film looks to be a throwback to the galaxy-spanning adventure of the original trilogy; the Thomas Crown Affair from Academy Award nominee, Michael B. Jordan; Avengers Secret Wars and the Batman 2. And for '28, we look forward to being involved in Sam Mendes' groundbreaking Beatles, a 4-film event."
— Richard Gelfond, CEO

The forward visibility is the deepest in IMAX history. 2027 is already "60% booked" with FFI titles including Miami Vice (Joe Kosinski), Star Wars: Starfighter, Thomas Crown Affair (Michael B. Jordan), Avengers: Secret Wars, The Batman 2. 2028 features Sam Mendes' 4-film Beatles event (announced as FFI), Call of Duty (Peter Berg, Taylor Sheridan), A24's Elden Ring video game adaptation, Disney Pixar's Incredibles 3 (FFI with IMAX exclusive 1.43 aspect ratio — the deepest format-level commitment).

The Incredibles 3 confirmation is particularly important. It is the first major animated FFI title — extending the format moat beyond live-action into animation, opening up a meaningful new category for FFI economics.

Assessment: The 2027-2028 slate visibility is the cleanest empirical signal that the FFI cadence is sustainable at 12+ titles per year. The Incredibles 3 confirmation (animation FFI) is a meaningful new category that extends the addressable market for FFI content. The Beatles 4-film event (Sam Mendes) is the kind of marquee project that would not happen on traditional Hollywood economics — it requires the IMAX brand and exclusive aspect ratio as a structural enabler.

11. Network Growth at Underpenetrated Markets

"Surging demand for IMAX supported an expansion of our total addressable market to nearly 4,500 total zones worldwide, double our current systems in operation and backlog. … One, focusing on high-growth underserved markets. We've had tremendous success here, driving our biggest year ever for sales and installations in Japan in 2025, tripling our network in Australia since 2023 and making strong progress in France and Germany."
— Richard Gelfond, CEO

The TAM analysis presented at Investor Day is a meaningful upward revision of the addressable market. Previous TAM articulations were around 2,000-2,500 zones; the new figure of 4,500 zones doubles the addressable market and effectively quadruples the headroom above the current ~1,800 installed base. The 2x current systems + backlog implies multi-decade network growth opportunity even at moderated installation rates.

Specific geographic milestones in FY25: Japan single-best year ever; Australia tripled since 2023; France/Germany progress; 2,000th location opened in Q4; 257 exhibitor partners (+28% above 2019); rest-of-world install growth 8%+ (vs. 4% domestic).

Assessment: The expanded TAM is the structural enabler of the multi-year revenue CAGR target. At current install rates of 160 systems per year, IMAX has 25+ years of TAM runway. The geographic broadening (Japan, Australia, France, Germany, India in the FFI-content pipeline, Middle East, Vietnam, Indonesia) provides multi-decade structural growth. The framework supports continued network compounding well beyond the through-2028 articulation.

Analyst Q&A Highlights

FY26 Margin Trajectory and the Path to 50%+ by 2028

The opening Q&A topic probed the FY26 margin guide of "mid-40s with a 45% floor" against the through-2028 target of "over 50% by 2028." The math implies meaningful margin expansion over the next 2-3 years. Management's framing: the margin guide for FY26 incorporates incremental marketing investment (particularly around The Odyssey and Dune Part 3), with the through-2028 trajectory supported by the structural operating leverage (~85% incremental EBITDA conversion above the $250M quarterly box-office threshold) and the deliberate flat-OpEx posture.

Q: "Just on the adjusted EBITDA margin guidance with a floor of 45%, does that assume a global box office of $1.4 billion? And if so, just trying to understand how the margin would be flattish year-on-year with an incremental $100 million plus in box office?"
— Andrew Crum, B. Riley Securities

A: "Margins really -- it does fluctuate normally quarter-to-quarter. But as you look at the whole year, $1.4 billion box office, I understand the incrementality will come through, but we've chatted about this even on the last call as well is that there's always a mix between the regions of box office, whether you have local language or Hollywood and the amount that we're investing into marketing in this year. There are a lot of Hollywood titles that are significantly larger titles than last year. And as we look towards that, our goal would be to lean in heavily into IMAX and marketing, the titles as well. … And of course, you can capture more than the 45%, but this is just from a guidance perspective, providing that guidance with respect to the floor of the 45%. But of course, there's opportunity in that."
— Natasha Fernandes, CFO

Assessment: The CFO's "of course, you can capture more than the 45%" framing signals that the 45% floor is conservative. The marketing-investment justification for the floor positioning is reasonable — Odyssey, Dune Part 3, and the broader 12+ FFI title cadence justify incremental marketing dollars. Our base case is FY26 EBITDA margin of 46-47% with upside to 48% if Q4 2026 (Avatar lapping window) delivers above expectations.

Chinese New Year Performance and the China Slate Outlook

A question on the early China performance and the FY26 China slate. Management framed Chinese New Year as a "B slate" comparable to 2024 — multiple titles slipped from Chinese New Year to summer due to production delays. Pegasus 3 was the standout (IMAX's biggest Chinese title since Ne Zha 2). The implication is that the China summer slate may be stronger than the early-year metrics suggest.

Q: "Rich or Natasha, can you give us an update on the state of the Chinese box office and the early start to the Chinese New Year? We saw Pegasus 3 start very strong and outperform initial expectations. But just curious on how is the overall health of the market and the slate ahead."
— Omar Mejias Santiago, Wells Fargo

A: "I don't think you could take 10 days and talk about the state of the Chinese box office. I think when you look at China, Chinese New Year was kind of, I'd call it a B slate this year and very similar to the slate in '24. … there were a number of titles that were supposed to open for Chinese New Year, and they slipped and they weren't done in production, and they moved them to this summer. So I think that's what accounted for kind of modest results during that period of time. But I think in -- the summer will be better than we thought it would be because we thought those movies will have played earlier. So I think the result is more a matter of timing than it's the result of any trends in the Chinese box office."
— Richard Gelfond, CEO

Assessment: The China timing dynamics are a known FY26 headwind in Q1 (Ne Zha 2 lapping) but a tailwind for summer (delayed Chinese New Year releases). The CEO's framing of "matter of timing rather than trends" supports our base case that China contributes a similar absolute box-office level in FY26 vs. FY25, with the cadence shifted from Q1 to Q2/Q3.

Capital Allocation Priorities Post the Convert Refinancing

A direct question on capital allocation now that the convert overhang has been addressed and FY25 closed with $151M of cash. The CEO's framing: network growth investment is the highest-return use of capital ("when you look at PSAs this year compared to last year, when you look at the films that we have in '26 to slate, but maybe more importantly, you look at the backlog of films in '27 and '28, like we have an insight that most operators around the world don't have"). Opportunistic capital deployment in high-PSA markets (Japan, Australia, France) where JRSA returns are exceptional.

Q: "Wonder if you could talk about how you're thinking about capital allocation at this point. You don't have debt due until 2030. You should have more free cash flow than last year. How are you thinking about buybacks? You've had good luck — you've had good returns with the JRSAs. Where else can you sort of invest internally that you think would get high returns as well?"
— Eric Handler, ROTH Capital

A: "I think the best place we can invest is in our network growth. And that's because when you look at PSAs this year compared to last year, when you look at the films that we have in '26 to slate, but maybe more importantly, you look at the backlog of films in '27 and '28, like we have an insight that most operators around the world don't have, which is we know what our slate is going to be going forward. … Now I would also add that people didn't think of it this way, but Natasha mentioned it briefly in her remarks. But when we issued our new convert and we took out the old convert, we could have taken out the shares that were in the money in 2 ways. One, we could have given people shares; or two, we could have used cash. And we took them out with cash, which effectively lowered dilution and was analogous to a share buyback. So obviously, we're open to being opportunistic in various ways, but we're very focused on how to capitalize on our growth."
— Richard Gelfond, CEO

Assessment: The capital allocation framework is clear: (1) Network growth investment is the priority (highest return). (2) The convert refinancing was effectively a share buyback that took out dilution at $35 vs. converting at $37 — captured as such by management. (3) Future opportunistic capital deployment is preserved as optionality. The framework is appropriate given the FY26 slate and the through-2028 growth runway — every dollar invested in network growth at this point compounds against multi-year FFI economics.

Australia and Japan as Multi-Year Growth Engines

A question on the size of the Australia and Japan opportunities. Australia is 13% penetrated; the recent HOYTS 10-system deal (post-print) will roughly double the Australia network. Japan grew network 20% in FY25 and is 47% penetrated (vs. 4,500-zone TAM-implied potential). Per-screen averages (PSAs) in Australia run up to $4M — exceptional vs. global averages. The Japanese network is supported by the local-language FFI roll-out (Godzilla Minus Zero confirmed for FY26 FFI).

Q: "Just on the Australia deal, nice to see some growth from that region. Just curious if you could sort of frame it for us, Natasha, the growth opportunity network-wise in Australia and Japan? And then the follow-up, I'll give you now, just what you see from those regions as well in terms of relative PSAs and local language development in terms of films?"
— Michael Hickey, StoneX

A: "I think it was a really important deal for us. I mean, for the longest time, we had only about 2 locations this past year in 2025, we ramped up and installed some more locations in time for Avatar and started the year with about 10 locations and now adding this new deal. We're sitting with the potential to double — more than double our footprint in Australia. Australia is one of the strongest performing regions and countries for us. Some of the locations have TSAs up to $4 million, which is absolutely amazing. … I mean it's been one of our priority markets as well. We're only about 13% penetrated. So there's a lot of growth and opportunity there. … And as you look at Japan, we signed another 7 systems in Japan this quarter. Last year, we signed 13. And off of the success of Demon Slayer in local language in Japan, we're continuing to do that. … Japan is only 47% penetrated. So a lot of opportunity there. And those per screen averages remain just as strong as they've ever been."
— Natasha Fernandes, CFO

Assessment: Australia and Japan are the cleanest examples of the multi-year network growth thesis. Australia at 13% penetration with $4M PSAs supports continued multi-year compounding; the HOYTS deal alone roughly doubles the network. Japan at 47% penetration with strong PSAs and active local-language FFI programming supports ongoing 15-20% network growth. The geographic diversification reduces single-market concentration risk while compounding the operating leverage.

2026 Backlog Conversion and Install Pacing

A question on the install cadence into 2026 given the strong FY25 finish. Management's framing: backlog of 430 systems with the 160-175 FY26 install guide implies continued multi-year visibility. The install pacing is constrained by exhibitor readiness (construction timelines, permits) rather than IMAX capacity. The 65 Q4 installs is exceptional; a similar back-half-heavy pattern is possible for FY26.

Q: "Rich, you had a big install quarter in Q4. Given the demand situation, how much more can you ramp your team and to take that to another level?"
— Steven Frankel, Rosenblatt Securities

A: "It's just a question of timing, Steve. So if you ask me how many we could install in the fourth quarter? The answer is an awful lot because it's like — analyze it like a supply chain. So can you order the parts in advance? Can you do the designs? Can you deploy the teams? So sort of in any given year, it's a much larger number than we're doing now. If you said to me, people want to open for Hail Mary in 3 weeks, it's more difficult to do that. But over the longer term, I never used the word infinite, but you certainly could open a lot more if you wanted to. There's not much constraint on that."
— Richard Gelfond, CEO

Assessment: The install constraint is exhibitor-readiness rather than IMAX capacity. The 430-system backlog provides 3+ years of pipeline at current install rates. The FY26 160-175 guide is achievable with upside if exhibitor construction timing supports. Our model assumes 170 FY26 installs (high end of guide).

Sales vs. JRSA Mix in FY26

A question on the mix between sales-type and joint-revenue-sharing installations in FY26. Management confirmed a 45%-55% sales-to-JV mix guidance, with the JV portion capturing more ongoing box-office economics in high-PSA markets. The decision to lean into JV in markets like Japan, Australia, and France reflects the structural opportunity to participate in the box-office indexing rather than just capture upfront system-sale revenue.

Q: "On STL installs and upgrades this year. Is there any insight you can give us on expectations regarding market mix? You've been talking about more opportunities in the U.S. and whatnot. Should we expect revenue per install and revenue per upgrade to be relatively stable year-over-year?"
— Kiscada Hastings (for David Karnovsky), JPMorgan

A: "So generally, yes, I think that we have a standard sort of selling price. Now the opportunity is that the box office grows, and you would have seen it in the incrementality in our model in 2025, the JV systems, we have the ability to capture more box office there and as our box office grows. … I think the mix, we did guide towards 160 to 175 systems with a mix of 45% to 55% sales to JV mix. So I think we're still tracking towards that. … I think the opportunity, though, is looking at how do we capture more from those JV locations as the box office grows there as well."
— Natasha Fernandes, CFO

Assessment: The 45-55% sales-to-JV mix is consistent with the company's evolving network-growth strategy — leaning into JV in high-PSA markets where the box-office economics can be captured over a 10-year contract horizon. The mix structure supports the through-2028 revenue compounding thesis.

What They're NOT Saying

1. Specific FY26 quarterly cadence beyond "Q1 lowest." Management acknowledged Q1 will be the lowest box-office quarter (lapping Ne Zha 2 China comp), but did not provide quarterly granularity. We model Q1 box office at ~$255-275M (vs. $300M in Q1 2025).
2. Specific buyback authorization or framework. The convert refinancing was characterized as a share-buyback-equivalent, but no explicit buyback authorization was announced. We expect this to remain optionality preserved for tactical deployment.
3. Specific 2027/2028 FFI title list beyond the named projects. Management referenced "60% booked" for 2027 and a 2028 pipeline; specific title-by-title visibility for the back-end of the framework horizon is preserved for future updates.
4. Specific Apple/Amazon/Netflix economics articulation. The streamer-IMAX partnership trajectory is articulated qualitatively, but the per-deal economics (revenue share, marketing co-investment, exclusive-window terms) are not disclosed.
5. Specific dividend framework. Capital allocation framework references network investment, buyback optionality, and dividend optionality — but no formal dividend policy is articulated. This is consistent with the growth-investment-priority framework.
6. FY26 cash flow guide specifics. The through-2028 framework cites "~50% FCF conversion in 2026 and growing"; specific dollar guidance is not provided.
7. Specific tariff/macro-related risks. The CEO acknowledged "we have about 35 locations within the region in the Middle East" in response to the US-Iran conflict question but framed the impact as minimal. Broader macro-related risks (recession risk, consumer-spending softness) are not explicitly modeled into the guide.
8. Specific 2026 streamer deal economics beyond Apple F1 broadcast. The Project Hail Mary and Narnia revenue share with Amazon and Netflix is not disclosed; the deal economics are inferred to be favorable to IMAX but not specifically quantified.

Market Reaction

• Pre-print setup: IMAX closed February 26 at ~$36. Stock had grinding higher through November-February on the Investor Day catalyst delivery, the convert refinancing announcement, and the strong Avatar: Fire and Ash early-cycle performance. YTD ~+9%; trailing 30-day +5%; trailing 12-month +60%+.
• After-hours / next-session move: Stock indicated +4-7% pre-print on the magnitude of the FY25 beat and the FY26 guide articulation. The FY26 guide at $1.4B is at the lower end of the bull-case range, but the multi-year framework articulation supports continued multiple expansion.
• Volume: Pre-market volume elevated to ~2.5x average.
• Peers: AMC, Cinemark, Regal Holdings all trading sideways to slightly positive. The broader theatrical exhibition group benefits from the indexing-validation narrative IMAX is articulating.

Interpretive read: The FY25 print is the cleanest validation of the IMAX inflection thesis we have seen at the full-year level. The market is digesting the FY26 guide vs. the bull-case scenario (which had FY26 box office at $1.45-1.55B); the $1.4B starting point allows for the company's history of beating guidance. The through-2028 framework articulation and the convert refinancing combine to support continued multiple expansion. We expect the stock to grind toward $40+ over the coming weeks, with the next major catalyst being the Q1 2026 print in late April. The lone tactical headwind is the Q1 2026 China comp lapping Ne Zha 2 — this is a known headwind that is fully reflected in the FY26 guide framing.

Street Perspective

Debate 1: Is the FY26 Guide of $1.4B Conservative, or Has the Slate Visibility Tightened?

Bull view: The FY26 guide represents +9% box-office growth off a +40% FY25 base — a structurally conservative pacing. The Odyssey, Dune Part 3, Mandalorian and Grogu, Project Hail Mary, and Narnia each have indexing characteristics that should drive above-guidance contributions. The streamer-launch dynamics and the FFI cadence at 12+ titles support upside to $1.45-1.55B. Management has consistently beaten guidance through this cycle; the $1.4B starting point follows the same pattern.

Bear view: The FY25 base was exceptionally strong on multiple fronts (Ne Zha 2 in China generated $160M+ in a single quarter; the 7-FFI summer indexing run was extraordinary). FY26 may not have a single-title equivalent to Ne Zha 2, and the indexing peaks of the FY25 FFI summer may not repeat. The +9% guidance pacing reflects management acknowledgment of these dynamics rather than conservatism for its own sake.

Our take: The guide is genuinely conservative. Our base case is FY26 box office of $1.45-1.55B, with the variance driven by Odyssey indexing (could be exceptional) and streamer-launch dynamics (Hail Mary, Narnia). The lapping of Ne Zha 2 in Q1 2026 China is a known headwind that the company has internalized; the H2 2026 China slate (Penghu, Once Upon a Time in the Middle East, both delayed from CNY) is supportive. The base case for FY26 EBITDA is $215-230M (mid-40s margin on the upper end of the box-office range).

Debate 2: Is the Through-2028 Framework Credible, or Is the 50%+ EBITDA Margin Target Optimistic?

Bull view: The 50%+ EBITDA margin target is achievable given (a) the structural ~85% incremental EBITDA conversion above the $250M quarterly box-office threshold; (b) the deliberate flat-OpEx posture (FY25 OpEx grew 1% on +16% revenue); (c) the structural improvement in Content Solutions gross margin (66% FY25 vs. 53% FY24); (d) the high-margin contribution of Roundel/Target Plus-equivalent attached revenue (advertising, etc.). At a 2028 revenue base of $520-560M, the implied EBITDA of $275-310M at 50%+ margin requires only modest additional operating leverage.

Bear view: The 50%+ EBITDA margin target assumes continued operating-leverage flow-through at the current rate, which is a very strong assumption over a 3-year horizon. Marketing investment will compound (Odyssey-level releases require significant marketing dollars); SG&A inflation will normalize at some level even with productivity initiatives; the streamer-deal economics may compress as the streamer-IMAX market normalizes. The 47-48% range is more realistic than 50%+.

Our take: The 50%+ EBITDA margin is achievable but requires multiple structural conditions to hold. We model FY28 EBITDA margin at 48-50% — close enough to the framework that we treat the target as credible rather than aspirational. The combination of (a) continued operating leverage, (b) flat-OpEx discipline, and (c) margin-accretive mix shift to local-language and streamer-launch economics supports the framework. The risk is that one or more of these conditions weakens; our 48-50% modeling vs. management's 50%+ accommodates that risk.

Debate 3: Does the Convert Refinancing Eliminate the Capital-Structure Risk, or Just Move It Forward?

Bull view: The $250M new convert at 0.75% with $57 capped-call effective conversion price is exceptional execution. The $46M cash outlay to retire the old convert above the $37 strike effectively bought back ~1.3M shares of dilution; the new conversion price provides meaningful equity headroom before any new dilution materializes. The April 2026 convert overhang has been eliminated and the new convert maturity extends multi-year. There is no near-term capital-structure overhang on the equity story.

Bear view: The new convert at $250M (vs. $230M old) is slightly larger; the 0.75% coupon (vs. 0.5% old) is slightly more expensive. The maturity is multi-year but not infinite; the convert overhang has been pushed forward rather than eliminated. If IMAX trades above the $57 capped-call price before maturity, dilution will materialize at the next refinancing window.

Our take: The convert refinancing is the cleanest piece of capital allocation execution from the IMAX team and effectively eliminates the near-term overhang. The $57 capped call provides 50%+ headroom from current trading levels for further equity appreciation before dilution attaches. The bear point is technically correct (convert overhang exists somewhere in the future) but practically immaterial for the next 2-3 years. The capital structure is no longer a thesis-relevant risk.

Model Implications & Thesis Scorecard

Model Update

• FY25 estimates (actual): Revenue $410M (+16%); EBITDA $185M (45% margin); EPS $1.45 (+53%); Operating cash flow $127M (record); Box office $1.28B
• FY26 estimates (raised): Revenue ~$475-490M (+16-19%); EBITDA ~$215-225M (mid-40s margin); EPS ~$1.85-2.00 (+28-38%); Box office ~$1.45-1.55B
• FY27 estimates: Revenue ~$520-545M (+10-11%); EBITDA ~$245-265M (mid-to-high 40s margin); EPS ~$2.20-2.45 (+19-22%); Box office ~$1.55-1.65B
• FY28 estimates: Revenue ~$560-590M (+8-9%); EBITDA ~$280-305M (50%+ margin); EPS ~$2.55-2.85 (+16-17%); Box office ~$1.6-1.75B
• Long-term framework: High-single-to-low-double-digit revenue CAGR through 2028; operating margin 50%+ by 2028 (per company framework); FCF conversion ~50% in 2026 growing to 55-60% at maturity

Thesis Scorecard

Rating & Action

Maintaining Outperform. The FY25 print and the FY26 guide deliver on every dimension of our initiation and Q3 maintain. The Investor Day framework articulated the multi-year trajectory at a level of specificity that supports continued multiple expansion. The convert refinancing eliminates the lone capital-structure overhang. The through-2028 framework (high-single-to-low-double-digit revenue CAGR, 50%+ margin, 2x EPS:revenue growth, ~50% FCF conversion) defines a structurally higher-quality business than was visible at the start of 2025.

Fair value range widens to $40-$52 (from $36-$46). The widening reflects (a) the through-2028 framework articulation that supports a higher terminal value; (b) the cleaner capital structure post the convert refinancing; (c) the multi-year FFI slate visibility through 2028 (Beatles 4-film event, Incredibles 3 animated FFI, Miami Vice, Star Wars: Starfighter); (d) the established streamer-theatrical flywheel as a structural revenue category. Stock at ~$36 pre-print; we expect 5-8% post-print move and continued grinding higher through 2026.

What would change our view:

• Upgrade further (toward Conviction Pick framework): Q1 2026 box office above $300M (despite Ne Zha 2 lapping); The Odyssey indexing above 18% globally; FY26 install pace at 180+ implying potential FY26 install guide raise; new streamer partnership announcement at major-IP level; explicit buyback authorization. Combination of these would support a $52-62 fair value range.
• Downgrade to Hold: Q1 2026 box office below $250M (suggesting Ne Zha 2 lapping is more severe than modeled); The Odyssey indexing below 14% globally (suggesting FFI premium compression); convert refinancing-equivalent dilution materializes if equity trades above $57 capped-call; macro-driven consumer spending softness impacting theatrical baseline.

Key watch items into Q1 2026 (April-May 2026):

• Q1 2026 box office trajectory (Avatar carryover into January-February; Pegasus 3 China; Project Hail Mary March; early Project Hail Mary indexing)
• Project Hail Mary IMAX indexing on opening weekend (FFI title from Amazon)
• Avatar: Fire and Ash final box-office finish and IMAX share contribution
• FY26 guidance updates (any incremental FFI title confirmations)
• Network install pace (Q1 2026 cadence vs. Q1 2025)
• Signings momentum (HOYTS Australia 10-system deal completed; what's next)
• Streamer partnership announcements (Narnia trailer, additional streamer-FFI titles)
• 2027 FFI title pipeline expansion
• Capital allocation execution (any incremental capital deployment in JRSA partnerships)