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IMAX Q4 Earnings Miss, Revenues Rise Y/Y on Box Office Gain
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IMAX Corporation (IMAX - Free Report) reported fourth-quarter 2024 adjusted earnings of 27 cents per share, which missed the Zacks Consensus Estimate by 6.9% but increased 58.8% year over year.
Total revenues of $92.6 million missed the Zacks Consensus Estimate by 11.56% but increased 7.7% year over year.
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
Category-wise, image Enhancement & Maintenance Services, technology rentals and finance income were up 20.4%, 6.5% and 34% year over year to $42.7 million, $13.7 million and $2.9, respectively. Technology sales revenues were down 6.2% year over year to $33.1 million.
Segment-wise, Content Solutions revenues increased 33.6% year over year to $25.5 million in the fourth quarter of 2024, driven by higher box office, and highlighted by a record Thanksgiving weekend box office of $24 million.
Technology Products and Services revenues rose 2.5% year over year to $64.04 million, driven by higher box office-related rental revenues that more than offset a lower level of sales type system installations year over year. All Other revenues declined 29.7% year over year to $3.11 million.
IMAX Corporation Price, Consensus and EPS Surprise
Within Content Solutions Business, Film Remastering and Distribution revenues increased 35.4% year over year to $22.8 million. Other content solutions revenues surged 20.2% year over year to $2.68 million.
The fourth-quarter box office of $204 million increased 20% year over year and helped propel IMAX to near-record annual domestic box office. Top-grossing fourth-quarter titles included Gladiator 2 ($31 million), Venom: The Last Dance ($31 million), Mufasa: The Lion King ($26 million) and Interstellar ($20 million).
Technology Products and Services Details
Within the Technology Products and Services segment, System Sales were $31.5 million, down 4.3% year over year. System Rental revenues increased 6.4% year over year to $13.7 million.
Maintenance revenues were $15.7 million, up 9.7% year over year. Finance Income revenues were $2.97 million in the reported quarter, up 34% year over year.
Network Growth Statistics
During the fourth quarter of 2024, IMAX installed 58 systems compared with 69 systems in the fourth quarter of 2023, resulting in 146 system installations in the full year versus 128 system installations in the prior year. Of those, 28 systems in the fourth quarter and 63 in the full year were under sales arrangements compared with 35 and 70 systems in the prior year, respectively.
As of Dec. 31, 2024, there were 1,807 IMAX Systems operating in 90 countries and territories, including 1,735 commercial multiplexes, 11 commercial destinations and 61 institutional locations in the company’s global network.
IMAX currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which there are 1,735 IMAX Systems operating as of Dec. 31, 2024, representing a market penetration of only 48%.
As of Dec. 31, 2024, IMAX had 809 IMAX Systems operating in Greater China with an additional 237 systems in backlog. The company’s backlog in Greater China as of Dec. 31, 2024, represents 54% of its total backlog, including system upgrades. IMAX has a partnership in China with Wanda and as of Dec. 31, 2024, through the company’s partnership with Wanda, there were 384 IMAX Systems operational in Greater China, of which 334 are under the parties’ joint revenue-sharing arrangements.
Commercial network growth continues with the number of IMAX locations increasing 2.5% year over year to 1,735 systems. The company ended 2024 with a backlog of 440 IMAX systems.
Operating Details
Gross margin expanded 140 basis points (bps) to 52.2% in the fourth quarter of 2024. Content Solutions gross margin contracted 450 bps to 46.4%, while Technology Products and Services gross margin expanded 560 bps to 53.4% in the fourth quarter. All other gross margin came in at 74%, down from 92.4% in the year-ago quarter.
Adjusted EBITDA per credit facility was $34.2 million, up 48.6% year over year.
Selling, general & administrative expenses decreased 7.6% year over year to $32.4 million. Research & development expenses were down 57.8% to $1.15 million.
IMAX reported an operating income of $9.51 million, which surged 247.3% year over year.
Balance Sheet & Cash Flow
Net cash provided by operating activities for 2024 was $71 million compared with $59 million in the prior-year period, reflecting improvements in working capital driven by higher collections.
As of Dec. 31, 2024, IMAX’s available liquidity was $418 million. The company’s liquidity includes cash and cash equivalents of $101 million, $263 million in available borrowing capacity under the Credit Facility, and $54 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs, was $269 million as of Dec. 31, 2024.
In 2021, the company issued $230 million of 0.500% Convertible Senior Notes due 2026 (“Convertible Notes”). In connection with the pricing of the Convertible Notes, IMAX entered into privately negotiated capped call transactions with an initial cap price of $37.2750 per share of the company’s common shares.
The weighted average basic and diluted shares outstanding in the fourth quarter of 2024 were 52.8 million and 54.7 million, respectively, compared to 54.0 million and 55.0 million in the fourth quarter of 2023, representing a decrease of 2.2% and 0.5%, respectively.
For the year ended Dec. 31, 2024, IMAX repurchased 1,166,370 common shares at an average price of $13.99 for a total of $16 million, excluding commissions.
The company is authorized under its share-repurchase program, expiring June 30, 2026, to repurchase up to $400 million of its common shares, of which approximately $151 million remains available.
Guidance
IMAX expects to deliver a record box office of more than $1.2 billion in 2025, along with a total adjusted EBITDA margin of 40%+ and system installations of 145 to 160.
Image: Bigstock
IMAX Q4 Earnings Miss, Revenues Rise Y/Y on Box Office Gain
IMAX Corporation (IMAX - Free Report) reported fourth-quarter 2024 adjusted earnings of 27 cents per share, which missed the Zacks Consensus Estimate by 6.9% but increased 58.8% year over year.
Total revenues of $92.6 million missed the Zacks Consensus Estimate by 11.56% but increased 7.7% year over year.
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
Category-wise, image Enhancement & Maintenance Services, technology rentals and finance income were up 20.4%, 6.5% and 34% year over year to $42.7 million, $13.7 million and $2.9, respectively. Technology sales revenues were down 6.2% year over year to $33.1 million.
Segment-wise, Content Solutions revenues increased 33.6% year over year to $25.5 million in the fourth quarter of 2024, driven by higher box office, and highlighted by a record Thanksgiving weekend box office of $24 million.
Technology Products and Services revenues rose 2.5% year over year to $64.04 million, driven by higher box office-related rental revenues that more than offset a lower level of sales type system installations year over year. All Other revenues declined 29.7% year over year to $3.11 million.
IMAX Corporation Price, Consensus and EPS Surprise
IMAX Corporation price-consensus-eps-surprise-chart | IMAX Corporation Quote
Content Solutions Business Details
Within Content Solutions Business, Film Remastering and Distribution revenues increased 35.4% year over year to $22.8 million. Other content solutions revenues surged 20.2% year over year to $2.68 million.
The fourth-quarter box office of $204 million increased 20% year over year and helped propel IMAX to near-record annual domestic box office. Top-grossing fourth-quarter titles included Gladiator 2 ($31 million), Venom: The Last Dance ($31 million), Mufasa: The Lion King ($26 million) and Interstellar ($20 million).
Technology Products and Services Details
Within the Technology Products and Services segment, System Sales were $31.5 million, down 4.3% year over year. System Rental revenues increased 6.4% year over year to $13.7 million.
Maintenance revenues were $15.7 million, up 9.7% year over year. Finance Income revenues were $2.97 million in the reported quarter, up 34% year over year.
Network Growth Statistics
During the fourth quarter of 2024, IMAX installed 58 systems compared with 69 systems in the fourth quarter of 2023, resulting in 146 system installations in the full year versus 128 system installations in the prior year. Of those, 28 systems in the fourth quarter and 63 in the full year were under sales arrangements compared with 35 and 70 systems in the prior year, respectively.
As of Dec. 31, 2024, there were 1,807 IMAX Systems operating in 90 countries and territories, including 1,735 commercial multiplexes, 11 commercial destinations and 61 institutional locations in the company’s global network.
IMAX currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which there are 1,735 IMAX Systems operating as of Dec. 31, 2024, representing a market penetration of only 48%.
As of Dec. 31, 2024, IMAX had 809 IMAX Systems operating in Greater China with an additional 237 systems in backlog. The company’s backlog in Greater China as of Dec. 31, 2024, represents 54% of its total backlog, including system upgrades. IMAX has a partnership in China with Wanda and as of Dec. 31, 2024, through the company’s partnership with Wanda, there were 384 IMAX Systems operational in Greater China, of which 334 are under the parties’ joint revenue-sharing arrangements.
Commercial network growth continues with the number of IMAX locations increasing 2.5% year over year to 1,735 systems. The company ended 2024 with a backlog of 440 IMAX systems.
Operating Details
Gross margin expanded 140 basis points (bps) to 52.2% in the fourth quarter of 2024. Content Solutions gross margin contracted 450 bps to 46.4%, while Technology Products and Services gross margin expanded 560 bps to 53.4% in the fourth quarter. All other gross margin came in at 74%, down from 92.4% in the year-ago quarter.
Adjusted EBITDA per credit facility was $34.2 million, up 48.6% year over year.
Selling, general & administrative expenses decreased 7.6% year over year to $32.4 million. Research & development expenses were down 57.8% to $1.15 million.
IMAX reported an operating income of $9.51 million, which surged 247.3% year over year.
Balance Sheet & Cash Flow
Net cash provided by operating activities for 2024 was $71 million compared with $59 million in the prior-year period, reflecting improvements in working capital driven by higher collections.
As of Dec. 31, 2024, IMAX’s available liquidity was $418 million. The company’s liquidity includes cash and cash equivalents of $101 million, $263 million in available borrowing capacity under the Credit Facility, and $54 million in available borrowing capacity under IMAX China’s revolving facilities. Total debt, excluding deferred financing costs, was $269 million as of Dec. 31, 2024.
In 2021, the company issued $230 million of 0.500% Convertible Senior Notes due 2026 (“Convertible Notes”). In connection with the pricing of the Convertible Notes, IMAX entered into privately negotiated capped call transactions with an initial cap price of $37.2750 per share of the company’s common shares.
The weighted average basic and diluted shares outstanding in the fourth quarter of 2024 were 52.8 million and 54.7 million, respectively, compared to 54.0 million and 55.0 million in the fourth quarter of 2023, representing a decrease of 2.2% and 0.5%, respectively.
For the year ended Dec. 31, 2024, IMAX repurchased 1,166,370 common shares at an average price of $13.99 for a total of $16 million, excluding commissions.
The company is authorized under its share-repurchase program, expiring June 30, 2026, to repurchase up to $400 million of its common shares, of which approximately $151 million remains available.
Guidance
IMAX expects to deliver a record box office of more than $1.2 billion in 2025, along with a total adjusted EBITDA margin of 40%+ and system installations of 145 to 160.
Zacks Rank & Stocks to Consider
IMAX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Consumer Discretionary sector are Camping World (CWH - Free Report) , fuboTV (FUBO - Free Report) and Golden Entertainment (GDEN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Camping World have dropped 13.1% year to date. CWH is set to report fourth-quarter 2024 results on Feb. 25.
Shares of fuboTV have skyrocketed 100% year to date. FUBO is slated to report fourth-quarter 2024 results on Feb. 28.
Shares of Golden Entertainment have declined 8.7% year to date. GDEN is set to report fourth-quarter 2024 results on Feb. 27.