Imax Corporation

Good day and thank you for standing by. Welcome to IMAX's fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would like to hand the conference over to speaker today. Jennifer Horsney, please go ahead.

Good afternoon and thank you for joining us for IMAX's fourth quarter 2025 earnings conference call. On the call today to review the financial results are Rich Gelfand, Chief Executive Officer, and Natasha Fernandez, our Chief Financial Officer. Rob Lister, Chief Legal Officer, is also joining us today. Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted on the investor relations section of our site. Our historical Excel model is posted to the website as well. I would like to remind you of the following information regarding forward-looking statements. Today's call as well as the accompanying slide deck may include statements that are forward-looking and that pertain to future results or outcomes. These forward-looking statements are subject to risks and uncertainties that could cause our actual future results to not occur or occurrences to differ. Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information, future events, or otherwise. During today's call, references may be made to certain non-GAAP financial measures. Discussion of management's use of these measures and the definition of these measures, as well as a reconciliation to non-GAAP financial measures, are contained in this afternoon's press release and our earnings materials, which are available on the Investor Relations page of our website at imax.com. With that, let me now turn the call over to Mr. Richard Gelfand. Rich?

Thanks, Jennifer. And thanks, everyone, for joining us today as we review our results for a record-breaking year and look ahead to a very promising 2026. 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, including two of our top five in NEJA 2 and Demon Slayer Infinity Castle. And we drove significant network growth with agreements for 166 new and upgraded IMAX systems and 160 systems installed worldwide, including 8% network growth in the rest of the world. We are an unqualified winner in a complex entertainment landscape. Signs of our impact are everywhere. Studios put IMAX front and center in their marketing campaigns, driving record indexing and enormous media value for our brand. The New York Times, Wall Street Journal, and Los Angeles Times have all published features highlighting our unique success. Our stock is among the best performers in global media and entertainment, up over 44% in 2025. And IMAX releases earned 58 Academy Award nominations, including five of the 10 Best Picture nominees. Every one of Warner Brothers' 30 nominations was for a film that played in IMAX, including Sinners, which was shot with IMAX film cameras, and One Battle After Another, which received an IMAX 70 millimeter film run. We delivered at least 20% of the domestic opening for Sinners, One Battle After Another, and F1. Our financial results reflect our progress and the strength and incrementality in our model. We beat projections across almost every key financial metrics, setting several company records. We delivered a record $410 million in total revenue in 2025. We achieved double digit percentage beats on original consensus estimates for adjusted EBITDA and EPS with $185 million and $1.45 respectively for the full year. We delivered a 45% EBITDA margin, a record and our first time breaking 40 since 2019. Record operating cash flow of 127 million for the full year. And in the fourth quarter, we delivered record box office and over 50% growth in adjusted EBITDA and adjusted EPS. 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. We believe we are far from our peak, but rather in a period of evolution and growth. With superior immersive technology and unmatched scale, iMatch is the premier global platform for blockbuster content. And blockbuster content is continues to grow in importance across the global ecosystem. The world's greatest filmmakers, studios, and even streamers are leaning into blockbuster theatrical releases as drivers of IP and value throughout the chain. As this trend accelerates, IMAX becomes an increasingly valuable player. We're the only game in town with a global platform content portfolio and well-recognized brand. We're able to leverage the shift to premium and consumer demand for great out-of-home experiences. And with a very strong slate booking all the way into 2029 and an expanding total addressable market for IMAX systems, we are capitalizing on our strong position and delivering for our shareholders. The slate for 26 is arguably the strongest we've ever seen, highlighted by massive Film for IMAX 10 polls headlining a record of at least 12 Film for IMAX releases worldwide, including Christopher Nolan's The Odyssey, the first theatrical feature shot entirely with IMAX film cameras. Tickets for select IMAX 70mm showings sold out a full year in advance. and we will have 40 film locations for Odyssey's debut in July. The Mandalorian and Grogu, the big screen debut of the massively popular Disney Plus former TV series from director Jon Favreau, who crafted the film with cutting-edge technology specifically for IMAX screens. Dune Part 3, the next installment in Denis Villeneuve's franchise, and the first of the series shot with IMAX film cameras. And next month's Project Hail Mary, a film for IMAX Space Adventure that is earning excellent buzz and will screen in IMAX 70 millimeter across 16 locations, an indicator of strong indexing for recent releases. Highly anticipated family releases and a time when family films are leading the box office and IMAX is capturing a greater box office share of family films than ever before, including Super Mario Galaxy Movie, which we're hearing is testing extremely well, Minions 3, and Toy Story 5. The previous installments of these films all gross near or above a billion dollars. A diverse collection of distinctive and filmmaker-driven releases that we believe hold real upside, from Michael to Zach Krieger's Resident Evil. Another strong offering of local language films from around the world, including the eagerly awaited sequel Godzilla Minus Zero from Japan and the Indian epic Ramayana. And finally, Barbie director Greta Gerwig's Narnia, a pioneering partnership with Netflix that we believe will deliver creativity greater value to our exhibition partners. Furthermore, we were already 60% booked for 2027 with blockbusters including Top Gun Maverick and F1 director Joe Kaczynski's Miami Vice, which will be filmed for IMAX. Star Wars Starfighter from Deadpool and Wolverine director Sean 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 four-film event. With two months down and 26, We feel good about our projected box office for the year as we enter one of the most promising periods. Our global box office in January was up 16% year over year. 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. The Chinese New Year holiday delivered $28 million on the strength of Pegasus III, our biggest Chinese title since Nezha II. And we continue to diversify our content slate, securing an agreement with Apple to stream live broadcasts of Formula One World Championship races, to IMAX locations this season and delivering a very successful exclusive opening of Baz Luhrmann's Elvis doc, Epic. We also continue to drive strong system sales and network growth worldwide, particularly in under-penetrated, high-value, rest-of-the-world markets, where we installed a record 118 systems in 2025. We now work with more exhibition partners globally than ever before, 257 in total last year, up 28% over 2019. 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. To capture that opportunity, we're executing against a four-pronged strategy. 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. Second, continuing to unlock new opportunities in North America. Domestic is an engine of growth for us, with new and existing partners alike, dispelling the notion that this is a fully mature market. In 2025 alone, we struck agreements with each of the biggest exhibitors in the US, AMC, Cinemark, and Regal, that advanced key strategic priorities, including new locations in Los Angeles, and New York with Regal, and three new IMAX 70-millimeter film locations with Cinemark. Third, identifying opportunities to add a second IMAX location in high-performing zones. For all our success with marquee locations in major metropolitan areas, we are still deeply underpenetrated in many, presenting an opportunity to grow within our best market centers. For instance, We have only five 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. And we see a lot of opportunities in metropolitan areas, including Chicago, Boston, San Antonio, and San Jose, among others. And lastly, finally, we continue to explore innovative deal structures that leverage our liquidity. Given our strong balance sheet and momentum, we can help our partners get more IMATs into their circuits quickly. Through upfront capital expenditures that pay for themselves given our strong market share gains and the impressive film slate lying ahead. In sum, 2025 was a transformational, record-breaking year for IMAX. We exceeded our targets for financial performance and finished with a strong fourth quarter. We drove great results for our exhibition partners, breaking box office records as fans, filmmakers, and studios clamor for more of the IMAX experience. We continued network expansion with significant runway to grow further, even as we capture a record share of the global box office. In every way, we've leveled up our performance. With an incredibly promising slate locked in for the next several years, we continue to believe the best is yet to come. We're focused on strengthening our position, executing with financial discipline, providing the most immersive entertainment experience on the planet, and delivering for our shareholders. Thank you all, and now I'll turn it over to Natasha.