IMAX Reports Record Q2 Box Office Surge

IMAX Corporation (NYSE:IMAX) reported Q2 2025 results on July 24, 2025, delivering record domestic box office results. The company achieved a 41% year-over-year increase in global box office, and adjusted EBITDA margin exceeded 42% for the second quarter in a row.

Management raised full-year 2025 system installation guidance to 150-160, reflecting surging demand, and confirmed a replenished backlog with robust installation slate visibility through 2027. The key insights below focus on IMAX's network expansion, competitive dynamics, and sustained profitability drivers.

IMAX installations and signings accelerate global reach

System installations grew 50% year over year with 36 new installations. Geographic expansion was highlighted by France, the Netherlands, and Japan achieving their largest single-year growth. The company signed 124 new and upgraded systems year to date, nearly matching full-year 2024 signings in just six months.

"Given the demand for IMAX systems, moving higher in our range for full-year installations to between 150 and 160 systems worldwide. And we've now completed agreements for 124 new and upgraded IMAX systems worldwide year to date compared to 130 in all of 2024."
-- Richard Gelfond, Chief Executive Officer

This accelerated pace of installations and new signings expands the addressable market, drives future recurring revenue, and demonstrates management’s ability to convert strategic demand into tangible network growth,

IMAX box office and market share hit all-time highs

IMAX delivered its highest-grossing domestic box office quarter ever, achieving a 3.6% share of global box office on less than 1% of active movie screens, with U.S. and China ticket-sale market shares at 5.3% and 6%, respectively.

Major releases such as "Mission Impossible: The Final Reckoning" and "F1: The Movie" saw IMAX capture over 20% of opening weekend box office receipts. This is an exceptional achievement, with an average opening-weekend share of about 15% for recent major releases.

"With all seven of these films to date, we've averaged about 15% of the North American box office on opening weekend on just 400 IMAX screens, soaring as high as 20% on Mission Impossible: The Final Reckoning, Thinners, and F1 during opening weekend. That's a feat we've only achieved eight times in our entire history. And three of those milestones came in this second quarter."
-- Richard Gelfond, Chief Executive Officer

This consistent box office outperformance reinforces the brand’s status as a must-have premium format for tentpole releases, firmly differentiating it from non-IMAX premium large format (PLF) competitors.

Improving operating leverage and capital discipline drive profitability

Gross profit grew 22% year over year to $54 million, with consolidated gross margin hitting 58%, driven by box office outperformance, high-margin revenue mix, and tight control of infrastructure expenses. Year-to-date operating cash flow increased 25% year over year to just over $30 million, while adjusted EBITDA margin climbed to 42.6%, up 780 basis points year over year, alongside an expanded $375 million credit facility announced in July 2025.

"We've talked about this before, but exceeding box office levels over $250 million in each quarter, essentially, every dollar beyond that flows right through down to EBITDA and to cash at about an 85% conversion rate. And so that's what will continue to generate the cash flow."
-- Natasha Fernandes, Chief Financial Officer

This strong margin and cash flow conversion indicate that incremental box office is largely accretive, offering substantial upside leverage as the network and slate scale, while prudent investment and low-cost capital structure further protect long-term shareholder value.

Looking Ahead

Management raised full-year 2025 installation guidance to 150-160 systems and projects adjusted EBITDA margin (non-GAAP) in the low-forties percent range for the full year. Visibility into the film slate now extends through 2027 with a record number of “film for IMAX” titles secured, supporting confidence in sustained global box office and installation growth.

The company reports a replenishing system backlog and expects to set a new annual record for local language box office within Q3 2025.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems and human editors. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.