Imax Corp: Form 10-Q for the period ended Jun 30, 2025

Presented below is Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) for IMAX Corporation (together with its consolidated subsidiaries, unless the context requires otherwise, “IMAX” or the “Company”) for the three and six months ended June 30, 2025 and 2024. This MD&A should be read in conjunction with Note 13, “Segment Reporting,” in the accompanying Condensed Consolidated Financial Statements in Item 1 as well as the Company’s audited consolidated financial statements and related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2024 included in the Company’s 2024 Annual Report on Form 10-K (the “2024 Form 10-K”).

As of June 30, 2025, the Company indirectly owned 71.72% of the outstanding equity interest in IMAX China Holding, Inc. (“IMAX China”), whose shares trade on the Hong Kong Stock Exchange. IMAX China is a consolidated subsidiary of the Company. For the six months ended June 30, 2025, net income attributable to IMAX China is $23.7 million, of which $17.0 million is attributable to the shareholders of the Company (2024 — $12.8 million and $9.1 million, respectively).

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements included in this quarterly report may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 or “forward-looking information” within the meaning of Canadian securities laws. These forward-looking statements include, but are not limited to, statements regarding business and technology strategies and measures to implement strategies, statements about the Company’s belief and expectations, competitive strengths, goals, market opportunity and penetration, including opportunities in and expected growth from international markets, momentum and runway for, expansion and growth of business, network, operations and technology, future capital expenditures (including the amount and nature thereof), the Company’s technological capabilities and the differentiation thereof, brand equity and brand awareness and the benefits thereof, industry prospects and consumer behavior, future industry developments, including expected releases and the timing and effects thereof, plans and references to the future success of the Company and expectations regarding its future operating, financial and technological results, including its box office guidance for 2025. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States, Canada, and China, including with respect to escalating and uncertain tariffs and other trade regulations, as well as economic and trade tensions, trade wars, and geopolitical conflicts and the effects thereof; risks related to the Company’s growth and operations in China; industry conditions in China affecting both the Company and its partners; risks related to the failure of the Company’s exhibitors being able to fulfill their contractual payment obligations; risks related to the Company’s failure to attract and retain its employee population; the performance of IMAX remastered films and other films released to the IMAX network; the signing of IMAX System agreements; conditions, changes and developments in the commercial exhibition industry; risks related to the Company’s inability to enter into new sales and lease agreements adversely affecting revenue; risks related to the Company’s operating results and cash flow increasing the volatility of the Company’s share price; risks related to currency fluctuations and foreign exchange controls; the potential impact of increased competition in the markets within which the Company operates, including competitive actions by other companies; the failure to respond to change and advancements in technology; risks relating to consolidation among commercial exhibitors and studios; risks related to brand extensions and new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cybersecurity and data privacy; risks related to the Company’s inability to protect its intellectual property and to avoid infringing, misappropriating, or violating the intellectual property rights of others; risks associated with the Company’s use of artificial intelligence (“AI”) and exploration of additional use cases of AI; risks related to climate change; risks related to weather conditions and natural disasters that may disrupt or harm the Company’s business; risks related to the Company’s indebtedness and compliance with its debt agreements; general economic, market or business conditions; risks related to sustained inflationary pressure; risks related to political, economic and social instability; the failure to convert system backlog into revenue and cash flows; changes in laws or regulations; any statements of belief and any statements of assumptions underlying any of the foregoing; other factors and risks outlined in the Company’s periodic filings with the United States Securities and Exchange Commission (the “SEC”) or in Canada, the System for Electronic Data Analysis and Retrieval (“SEDAR+”); and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this quarterly report are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. The forward-looking statements herein are made only as of the date hereof and the Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

IMAX®, IMAX 3D®, Experience It In IMAX®, The IMAX Experience®, DMR®, Filmed For IMAX®, IMAX Live®, IMAX Enhanced® and IMAX StreamSmartTM are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions.

The Company makes available, free of charge, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to such reports, as soon as reasonably practicable after such filings have been made with the SEC and Canadian securities regulators. Reports may be obtained free of charge through the SEC’s website at www.sec.gov (http://www.sec.gov) or the SEDAR+ website at www.sedarplus.ca (http://www.sedarplus.ca) and through the Company’s website at www.imax.com (http://www.imax.com) or by calling the Company’s Investor Relations Department at 212-821-0154.

The Company announces material information to the public through a variety of means, including filings with the SEC and Canadian securities regulators, press releases, public conference calls, and its website at www.imax.com (http://www.imax.com). The Company uses these channels to communicate with investors and the public about the Company, its products and services, and other matters. Therefore, investors are encouraged to review the information the Company makes public in these locations, as such information could be deemed to be material information. No information included on the Company’s website shall be deemed included or otherwise incorporated into this filing, except where expressly indicated. All references to the Company’s website are intended to be inactive textual references only.

OVERVIEW

IMAX Corporation (together with its consolidated subsidiaries, the “Company” or “IMAX”) is a Canadian corporation that was formed in March 1994 as a result of an amalgamation between WGIM Acquisition Corp. and the former IMAX Corporation (“Predecessor IMAX”). Predecessor IMAX was incorporated in 1967.

IMAX is a premier global technology platform for entertainment and events. Through its proprietary software, auditorium architecture, patented intellectual property, and specialized equipment, IMAX offers a unique end-to-end solution to create superior, awe-inspiring immersive content experiences for which the IMAX® brand is globally renowned. Top filmmakers, movie studios, artists, and creators utilize the cutting-edge visual and sound technology of IMAX to connect with audiences in innovative ways. As a result, IMAX is among the most important and successful global distribution platforms for domestic and international tentpole films. The Company’s global content portfolio includes blockbuster films, both from Hollywood and local language film industries worldwide; IMAX documentaries, both original and acquired (“IMAX Documentaries”); and IMAX events and experiences in emerging verticals, including music, gaming, and sports.

The Company leverages its proprietary technology and engineering in all aspects of its business, which principally consists of the digital remastering of films and other content into the IMAX format for distribution across the IMAX network (“IMAX Film Remastering”) and the sale or lease of premium IMAX theater systems (“IMAX System(s)”).

IMAX Systems are based on proprietary and patented image, audio and other technology developed over the course of the Company’s history. The customers for IMAX Systems are principally exhibitors that operate commercial multiplex theaters, and, to a much lesser extent, institutional locations, including museums and science centers, and destination entertainment sites. The Company does not own the locations in the IMAX network, except for one, and is not an exhibitor, but instead sells or leases the IMAX System to exhibitor customers along with licenses to use its trademarks and ongoing maintenance services for which there are annual payments by the exhibitors to IMAX.

IMAX has the largest global premium format network, more than double the size of its nearest competitor. As of June 30, 2025, there were 1,821 IMAX Systems in 89 countries and territories, including 1,750 commercial multiplexes, 11 commercial destinations, and 60 institutional locations in the Company’s global network. This compares to 1,780 IMAX Systems in 89 countries and territories as of June 30, 2024, including 1,705 commercial multiplexes, 12 commercial destinations, and 63 institutional locations in the Company’s global network. (Refer to the table under “IMAX Network and Backlog” for additional information on the composition of the IMAX network.)

IMAX Systems provide the Company’s exhibitor customers with a combination of the following benefits:

• the ability to exhibit content that has been enhanced through the IMAX Film Remastering process, which results in higher image and sound fidelity than conventional cinema experiences;
• advanced, high-resolution projectors with specialized equipment and automated theater control systems, which generate significantly more contrast and brightness than conventional theater systems;
• large screens and proprietary auditorium geometry, which result in a substantially larger field of view so that the screen extends to the edge of a viewer’s peripheral vision and creates more realistic images;
• advanced sound system components, which deliver more expansive sound imagery and pinpointed origination of sound to any specific spot in an auditorium equipped with an IMAX System;
• specialized theater acoustics, which result in a four-fold reduction in background noise than conventional cinema experiences;
• ongoing maintenance and extended warranty services; and
• a license to the globally recognized IMAX brand, as well as benefits from IMAX marketing of films being shown in its network and IMAX’s growing social media followership.

In addition, select movies shown in the IMAX network are filmed using proprietary IMAX film cameras or IMAX certified digital cameras, which along with IMAX’s customized guidance and a workflow process, provide filmmakers enhanced and differentiated image quality and an IMAX-exclusive film aspect ratio that delivers up to 26% more image onto a standard IMAX movie screen. In select IMAX locations worldwide, movies filmed with IMAX cameras have an IMAX-exclusive 1.43 film aspect ratio, delivering up to 67% more image.

The Company believes that these components cause audiences in IMAX locations to feel as if they are a part of the on-screen action, creating a more intense, immersive, and awe-inspiring experience than a conventional cinematic format.

As a result of the engineering and scientific achievements that are a hallmark of The IMAX Experience, the Company’s exhibitor customers typically charge a premium for films released in IMAX’s format versus films exhibited in their other auditoriums. The premium pricing, combined with the higher attendance levels associated with IMAX films, tends to generate incremental box office receipts (“box office”) for the Company’s exhibitor customers and for the movie studios releasing their films to the IMAX network. The incremental box office generated by IMAX films combined with IMAX’s leading global network footprint and scale has helped establish IMAX as a key premium distribution and marketing platform for Hollywood and foreign local language movie studios.

The Company achieved a box office record in the first half of 2025 of $579.2 million, including booking fees, a 24% increase over the prior year comparative period, from 54 new films and other content released during the period, highlighted by the performance of Ne Zha 2, a Chinese local language animation film, and strong performance from a number of Filmed for IMAX® releases including three titles (“Sinners,” “Mission: Impossible - The Final Reckoning,” and “F1 The Movie”) where IMAX delivered approximately 20% or more of the opening weekend domestic box office contributing to 19% second quarter year over year growth in global box office market share to 3.6%, with a footprint of less than 1% of screens. Prior to these three titles there were only five Hollywood movies in the Company’s history where IMAX accounted for over 20% of the opening weekend’s domestic box office.

As a premier global technology platform for entertainment and events, the Company strives to remain at the forefront of advancements in technology. The Company offers a suite of laser-based digital projection systems (“IMAX Laser Systems”), which deliver increased resolution, sharper and brighter images, deeper contrast, and the widest range of colors available to filmmakers today. The Company further believes that its suite of IMAX Laser Systems is helping facilitate the next major renewal and upgrade cycle for the global IMAX network.

The Company utilizes AI for image enhancement, streaming technology, and data analysis to improve various aspects of its business. Furthermore, the Company is actively exploring other global use cases for AI to save costs and to improve its products, operations, and efficiency.

The U.S. government has implemented substantial and rapidly evolving changes to U.S. trade policies, including increased tariffs on imports. These actions have resulted in retaliatory measures and uncertainty in global trade relationships. For a description of these risks, see “Risk Factors —The Company’s business may be materially adversely affected by the imposition of tariffs and other trade barriers and retaliatory countermeasures implemented by the United States and other governments.” in Part II, Item 1A of this Form 10-Q.

SOURCES OF REVENUE

The Company has organized its operating segments into the following two reportable segments: (i) Content Solutions, which principally includes content enhancement and distribution services, and (ii) Technology Products and Services, which principally includes the sale, lease, and maintenance of IMAX Systems. The Company’s activities that do not meet the criteria to be considered a reportable segment are disclosed within All Other (See Note 13 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1).

Content Solutions

The Content Solutions segment earns revenue from Film Remastering, including the distribution of this content across the IMAX global network. To a lesser extent, the Content Solutions segment also earns revenue from the distribution of large-format documentary films and IMAX events and experiences, including music, gaming, and sports, as well as the provision of film post-production services.

Film Remastering and Distribution

IMAX Film Remastering is a proprietary technology that digitally remasters films and other content into IMAX formats for distribution across the IMAX network. In a typical IMAX Film Remastering and distribution arrangement, the Company receives a percentage of the box office from a movie studio in exchange for converting a commercial film into the IMAX format and distributing it through the IMAX network. The fee earned by the Company in a typical IMAX Film Remastering and distribution arrangement averages approximately 12.5% of box office (i.e., gross box office (“GBO”) less applicable sales taxes), except for within Greater China, where the Company often receives a lower percentage of net box office due to tax.

IMAX Film Remastering digitally enhances the image quality and/or resolution for projection on IMAX screens while maintaining or enhancing the visual clarity and sound quality to levels for which The IMAX Experience is known. IMAX Film Remastering is completed for the image of films released to the IMAX network, creating a unique IMAX version that is optimized for IMAX’s proprietary digital projection systems and format. In addition, the original soundtrack of a film to be exhibited across the IMAX locations is remastered into a unique IMAX digital audio format. IMAX sound systems use proprietary loudspeaker systems, designs and proprietary surround sound configurations to ensure every seat in an auditorium is an optimal listening position.

IMAX films also benefit from enhancements made by individual filmmakers exclusively for the IMAX release of the film. Collectively, the Company refers to these enhancements as “IMAX DNA.” Filmmakers and movie studios increasingly seek to infuse more IMAX DNA in theatrical releases to realize a filmmaker’s creative vision more fully, while generating interest and excitement among moviegoers. Such enhancements include shooting films with IMAX cameras to increase the audience’s immersion in the film and to take advantage of the unique dimensions of the IMAX screen by projecting the film in a larger aspect ratio that delivers up to 26% more image onto a standard IMAX movie screen. In select IMAX locations worldwide, movies filmed with IMAX cameras have an IMAX-exclusive 1.43 film aspect ratio, delivering up to 67% more image. The Company’s Filmed For IMAX® program enables filmmakers to craft films from their inception to optimize The IMAX Experience and provides incremental and bespoke marketing support. The box office metrics demonstrate audiences respond extremely favorable to Filmed For IMAX® titles, resulting in a higher market share for IMAX.

Management believes that growth in international box office represents an important growth opportunity for the Company. The Company’s strategy to capitalize on this opportunity includes expanding the IMAX network into underpenetrated international markets and growing the number of local language films released, particularly in China, Japan, India, France, and South Korea. As the popularity of local language films has continued to increase, the Company has extended its content strategy to distribute local language content beyond native markets. For the first six months in 2025, local language films exhibited across the Company’s global network generated over $222 million in box office, representing 38% of the Company’s global box office, including the Chinese local language film, Ne Zha 2, which became the highest grossing IMAX release of all time in China.

The following table provides the number of new films and other content that were released to the Company’s global network during the three and six months ended June 30, 2025 and 2024:

The films distributed through the Company’s global network during the three and six months ended June 30, 2025 that generated the highest IMAX box office totals were Chinese local language film Ne Zha 2, Mission: Impossible - The Final Reckoning and Sinners. In addition, during the three and six months ended June 30, 2025, a number of alternative content films and events were distributed, including Becoming Led Zeppelin, Pink Floyd at Pompeii - MCMLXXII and One to One: John & Yoko.

In addition to the 54 IMAX films and alternative content experiences released on the Company’s global network during the six months ended June 30, 2025, the Company has announced the following additional 30 new films and alternative content experiences to be released throughout the remainder of 2025:

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The Company remains in active negotiations with studios for additional films to fill out its short- and long-term film slate for the IMAX network. The Company also expects to announce additional local language films and exclusive IMAX events and experiences to be released to its global network throughout 2025. The Company has announced that a record number of over 14 Filmed for IMAX titles will be released in 2025. The Company’s Hollywood film slate beyond 2025 is building, including major films such as: The Odyssey, Avengers: Doomsday, The Mandalorian and Grogu, Dune 3, Avengers: Secret Wars, Project Hail Mary, Toy Story 5, Supergirl Woman of Tomorrow, Moana, The Batman 2, Frozen 3, and Dynamic Duo. Additionally, in January 2025, the Company announced an agreement with Netflix, Inc. to debut Academy Award®-nominated director Greta Gerwig’s upcoming film, Narnia, exclusively across the IMAX network with a two-week run beginning Thanksgiving 2026.

Other Content Solutions

The Company distributes large-format documentary feature films through its global commercial network and institutional theaters. Traditionally, the Company receives as its distribution fee either a fixed amount or a fixed percentage of the theater box office and, following the recoupment of its costs, is typically entitled to receive an additional percentage of gross revenues as participation revenues. In 2025, the Company released the institutional 3D version of Blue Angels across select IMAX locations in North America, Europe, and Australia. Upcoming documentaries, which are currently in production, include The Lost Wolves of Yellowstone, which is expected to be released in 2025. Stormbound, a feature documentary produced by Academy Award-winning producer, Adam McKay, Patrouille de France and The Elephant Odyssey, a documentary in collaboration with Beach House Pictures Pte Ltd and China International Communications Group, are expected to be released in 2026.

The Company continues to believe that the IMAX network is a valuable global platform to launch and distribute original content, including documentaries. The ownership rights to such films may be held by the film sponsors, the film investors and/or the Company. As of June 30, 2025, the Company had distribution rights with respect to approximately 65 films, which cover subjects such as space, wildlife, music, sports, history and natural wonders.

In addition, the Company continues to evolve its platform to bring new, innovative IMAX events and experiences to audiences worldwide. As of June 30, 2025, the Company had a footprint of 266 connected locations in the IMAX network across North America, Europe, Africa, Australia, and Asia configured with connectivity to deliver live and interactive events with low latency and superior sight and sound.

In the six months ended June 30, 2025, the Company partnered with Sony Pictures for the exclusive release of Becoming Led Zeppelin, Magnolia Pictures for the exclusive release of One to One: John & Yoko and Trafalgar Releasing for the exclusive release of Pink Floyd at Pompeii - MCMLXXII, NBC Universal for the SNL50 The Homecoming Concert in select IMAX North American locations and DAZN for the PSG v Marseille Le Classique Match in select IMAX locations across France. In addition, the Company continued its partnership with A24 for one-night-only IMAX releases of classic A24 titles, including Talk to Me, Moonlight, and Spring Breakers. The Company collaborated with Fandango Media for the Fortnite Championship Series: Pro-Am screening in eight North American IMAX locations and with Wanda Film for the F1 Spanish Grand Prix screening across six IMAX locations in China.

The Company provides film post-production and quality control services for films, whether produced by IMAX or third parties, and digital post-production services. In addition, the Company provides IMAX film and digital cameras to content creators under the IMAX certified camera program.

Technology Products and Services

The Technology Products and Services segment earns revenue principally from the sale or lease of IMAX Systems, as well as from the maintenance of IMAX Systems. To a lesser extent, the Technology Products and Services segment also earns revenue from certain ancillary theater business activities, including after-market sales of IMAX Systems parts and 3D glasses.

Sales and Sales-Type Lease Arrangements

The Company provides IMAX Systems to exhibitors through sale arrangements or long-term lease arrangements that for accounting purposes are classified as sales-type leases. Under these arrangements, in exchange for providing the IMAX System, the Company earns initial fees and ongoing consideration, which can include fixed annual minimum payments and contingent fees in excess of the minimum payments, as well as maintenance and extended warranty fees (see “IMAX Maintenance” below). The initial fees vary depending on the system configuration and location of the IMAX System. Initial fees are paid to the Company in installments typically between the time of signing the arrangement and the time of system installation. Once an IMAX System is installed, the initial fees and the present value of future annual minimum payments, which are financing fees, are recognized as revenue. In addition, in sale arrangements, the present value of the estimated contingent fees that may become due if certain annual minimum box office receipt thresholds are exceeded is recorded as revenue in the period when the sale is recognized and is adjusted in future periods based on actual results and changes in estimates. Such variable consideration is only recognized on sales transactions to the extent the Company believes there is not a risk of significant revenue reversal. Finance income is recognized over the term of a financed sale or sales-type lease arrangement.

In sale arrangements, title to the IMAX System equipment generally transfers to the customer. However, in certain instances, the Company retains title or a security interest in the equipment until the customer has made all payments required by the agreement or until certain shipment events for the equipment have occurred. In a sales-type lease arrangement, title to the IMAX System equipment remains with the Company. The Company has the right to remove the equipment for non-payment or other defaults by the customer.

The revenue earned from customers under the Company’s IMAX System sale or sales-type lease agreements varies from quarter-to- quarter and year-to-year based on a number of factors, including the number and mix of IMAX System configurations sold or leased, the timing of installation of the IMAX Systems, the nature of the arrangement and other factors specific to individual contracts.

Joint Revenue Sharing Arrangements

The Company provides IMAX Systems to exhibitors through joint revenue sharing arrangements (“JRSAs”). Under the traditional form of these arrangements, the Company provides the IMAX System under a long-term lease in which the Company assumes the majority of the equipment and installation costs. In exchange for its upfront investment, the Company, primarily, earns rent based on a percentage of contingent box office receipts rather than requiring the customer to pay a fixed upfront fee or fixed annual minimum payments. Rental payments from the customer are required throughout the term of the arrangement and are typically due either monthly or quarterly. The Company retains title to the IMAX System equipment components throughout the lease term, and the equipment is returned to the Company at the conclusion of the arrangement.

Under certain other JRSAs, known as hybrid arrangements, the customer is responsible for making fixed upfront payments prior to the delivery and installation of the IMAX System in an amount that is typically half of what the Company would receive from a typical sale transaction. As with a traditional JRSA, the customer also pays the Company a percentage of contingent box office receipts over the term of the arrangement, although this percentage is typically half that of a traditional JRSA.

Under most JRSAs (both traditional and hybrid), the initial non-cancellable term is 10 years or longer and is renewable by the customer for one to two additional terms of between three to five years. The Company has the right to remove the equipment for non-payment or other defaults by the customer. The contracts are non-cancellable by the customer unless the Company fails to perform its obligations.

The revenue earned from customers under the Company’s JRSAs can vary from quarter-to-quarter and year-to-year based on a number of factors that drive box office levels including film performance, the mix of IMAX System configurations, the timing of installation of IMAX Systems, the nature of the arrangement, the location, size and management of the theater and other factors specific to individual arrangements.

JRSAs also require IMAX to provide maintenance and extended warranty services to the customer over the term of the lease in exchange for a separate fixed annual fee. These fees are reported within IMAX Maintenance, as discussed below.

JRSAs have been an important factor in the expansion of the Company’s commercial system network. JRSAs allow commercial theater exhibitors to install IMAX Systems without the significant initial capital investment required in a sale or sales-type lease arrangement. JRSAs drive recurring cash flows and earnings for the Company as customers under these arrangements pay the Company a portion of their ongoing box office receipts. The Company funds its investment in equipment for JRSAs through cash flows from operations. As of June 30, 2025, the Company had 899 locations under JRSAs in its global commercial multiplex network. The Company also had contracts in backlog for 336 systems under JRSAs as of June 30, 2025, including 138 upgrades to existing locations and 198 new locations.

IMAX Maintenance

IMAX System arrangements also include a requirement for the Company to provide maintenance services over the life of the arrangement in exchange for an extended warranty and annual maintenance fee paid by the exhibitor. Under these arrangements, the Company provides preventative and emergency maintenance services to ensure that each presentation is up to the highest IMAX quality standard. Annual maintenance fees are paid throughout the duration of the term of the system agreements.

All Other

IMAX Enhanced | Streaming and Consumer Technology

IMAX’s Streaming and Consumer Technology (“SCT”) segment now offers a single unified program: IMAX Enhanced. This umbrella program builds on IMAX’s brand and proprietary VisionScience™ technology to deliver The IMAX Experience to fans across streaming platforms and consumer devices. The new ‘IMAX Enhanced’ program for partners includes three core elements:

1. IMAX Enhanced Live: Real-time enhancement for sports, concerts, and events using SCT’s proprietary technology to measure, enhance, optimize, and validate premium color, contrast, and clarity at the speed of live.

2. IMAX Enhanced On-Demand: Quality preservation and optimization for films and series to preserve creative intent with IMAX-calibrated fidelity and remastering, offering viewers a differentiated, premium IMAX-assured experience. IMAX Enhanced on-demand content is currently available for fan-favorite titles across leading services such as Disney+, Sony Pictures Core, and Tencent Video.

3. Device Certification & Calibration: Establishes IMAX quality standards for consumer devices to ensure playback meets IMAX benchmarks. It assures that the enhancement and preservation of quality applied upstream for both Live and On-Demand workflows is maintained faithfully and experienced as intended on consumer devices. As of June 30, 2025, over 15 million IMAX Enhanced certified devices are in-market with partners including Sony Electronics, Hisense, TCL, LG, and Philips.

The SCT products previously branded as StreamSmart™ (encoding optimization) and StreamAware™ (quality assurance and monitoring) have now been fully streamlined and integrated into the IMAX Enhanced program, improving operational efficiency, reducing overhead, and enabling partners to deliver differentiated, premium, and monetizable viewing experiences validated through IMAX’s proprietary approach to visual quality.

IMAX’s Streaming and Consumer Technology is part of the Company’s next evolutionary step to extend the IMAX brand and technology into new use cases and programming, including live events, series, and fully leveraging consumer electronics to deliver premium experiences for fans at home.

Other

All Other also includes revenues from sources including one owned and operated IMAX System in Sacramento, California; a commercial arrangement with one theater resulting in the sharing of profits and losses; the provision of management services to three other theaters; and offering production advice and technical assistance to both documentary and Hollywood filmmakers.

IMAX NETWORK AND BACKLOG

IMAX Network

The following table provides detailed information about the IMAX network by type and geographic location as of June 30, 2025 and 2024. For additional information regarding the composition of the IMAX network, see “Marketing and Customers” in Part I, Item 1 of the Company’s 2024 Form 10-K.

(See “Risk Factors – The Company faces risks in connection with its significant presence in China and the continued expansion of its business there,” “Risk Factors – The Company may not convert all of its backlog into revenue and cash flows,” and “Risk Factors – General political, social and economic conditions can affect the Company’s business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems” in Part I, Item 1A of the Company’s 2024 Form 10-K.)

IMAX currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which there are 1,750 IMAX Systems operating as of June 30, 2025, representing a market penetration of only 48%. The Company believes that the majority of its future growth will come from international markets. As of June 30, 2025, 76% of IMAX Systems in the global commercial multiplex network were located within international markets (defined as all countries other than the United States and Canada). Revenues and GBO derived from international markets continue to exceed revenues and GBO from the United States and Canada. Risks associated with the Company’s international business are outlined in “Risk Factors – The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales and future growth prospects” in Part I, Item 1A of the Company’s 2024 Form 10-K.

The following tables provide detailed information about IMAX Systems operating in multiplex locations by arrangement type and geographic location as of June 30, 2025 and 2024:

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Backlog

The following tables provide detailed information about the Company’s backlog by arrangement type and geographic location as of June 30, 2025 and 2024:

The backlog reflects the minimum number of commitments for IMAX Systems according to signed contracts. The Company believes that the contractual obligations for IMAX System installations that are listed in backlog are valid and binding commitments. From time to time, in the normal course of its business, the Company will have customers who are unable to proceed with an IMAX System installation for a variety of reasons, including the inability to obtain certain consents, approvals or financing.

Certain of the Company’s contracts contain options for the customer to elect to upgrade system type during the term or to alter the contract structure (for example, from a JRSA to a sale) after signing, but before installation. Current backlog information reflects all known elections.

Approximately 74% of IMAX System arrangements in backlog as of June 30, 2025 are scheduled to be installed in international markets (2024 — 82%).

(See “Risk Factors – The Company may not convert all of its backlog into revenue and cash flows.” in Part I, Item 1A of the Company’s 2024 Form 10-K.)

Signings and Installations

The following tables provide detailed information about IMAX System signings and installations for the three and six months ended June 30, 2025 and 2024:

RESULTS OF OPERATIONS

The Company’s business and future prospects are evaluated by Richard L. Gelfond, its Chief Executive Officer (“CEO”), using a variety of factors and financial and operational metrics, including: (i) IMAX box office performance and the securing of new IMAX films and alternative content to be exhibited across the IMAX network; (ii) the signing, installation, and financial performance of IMAX System arrangements; (iii) the success of the Company’s investments in business evolution and brand extensions into streaming and consumer technology; (iv) revenues and gross margins earned by the Company’s segments; (v) consolidated earnings (loss) from operations, as adjusted for unusual items; (vi) the continuing ability to invest in and improve the Company’s technology to enhance the differentiation of The IMAX Experience versus other out-of-home experiences; (vii) the overall execution, reliability, and consumer acceptance of The IMAX Experience; and (viii) short- and long-term cash flow projections.

Results of Operations for the Three Months Ended June 30, 2025 and 2024

Net Income and Adjusted Net Income Attributable to Common Shareholders

The following table presents the Company’s net income attributable to common shareholders and the associated per diluted share amounts, as well as adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share for the three months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars, except per diluted share amounts)

Revenues and Gross Margin

During the three months ended June 30, 2025, the Company’s revenues and gross margin increased by $2.7 million, or 3%, and $9.7 million, or 22%, respectively, when compared to same period in 2024 principally due to a higher number of installations and stronger IMAX box office performance driven by the Hollywood film slate.

The following table presents the Company’s revenue, gross margin, and gross margin percentage by reportable segment for the three months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars)

Content Solutions

Content Solutions segment results are influenced by the level of commercial success and box office performance of the films and other content released to the IMAX network, as well as other factors, including the timing of the releases, the timing of documentary downstream sales, the length of play across the IMAX network, the box office share take rates under the Company’s Film Remastering and distribution arrangements, the level of marketing spend associated with the releases in the year, and fluctuations in the value of foreign currencies versus the U.S. Dollar.

For the three months ended June 30, 2025, Content Solutions segment revenues and gross margin decreased by $1.1 million, or 3%, and increased by $6.3 million, or 39%, respectively, when compared to the same period in 2024. The decrease in revenue compared to the prior period was primarily driven by revenue earned from the completion of the sale of the worldwide commercial and streaming rights of the Company’s original documentary, The Blue Angels, to Amazon Content in the second quarter of 2024.

The documentary sale impact on revenue was mostly offset in the second quarter of 2025 by stronger IMAX box office performance year over year. In the second quarter of 2025, box office generated by IMAX films, including booking fees, totaled $281.1 million, an $81.3 million, or 41% increase versus the prior year comparative period of $199.8 million. The growth was primarily driven by the stronger IMAX box office performance of the IMAX Hollywood film slate during the quarter, compared to the second quarter of 2024 box office performance which had fewer large blockbusters due to the Hollywood strikes. In the second quarter of 2025, IMAX box office was generated by the exhibition of 22 films and other content (21 new films and 1 film originally released in a prior year), including the following Hollywood titles, Mission: Impossible - The Final Reckoning ($75 million), Sinners ($40 million), F1 The Movie ($32 million) and Thunderbolts ($31 million). In the second quarter of 2025, local language films exhibited across the Company’s global network generated $19.8 million in box office, representing 7% of its global box office. In the second quarter of 2024, IMAX box office was generated by the exhibition of 34 films (27 new films and 7 films originally released in a prior year).

In the second quarter of 2025, the Company released six movies that were filmed with IMAX proprietary cameras (Filmed For IMAX): Sinners, Thunderbolts, Final Destination: Bloodlines, Mission: Impossible - The Final Reckoning, How To Train Your Dragon and F1 The Movie. Filmed For IMAX movies traditionally perform disproportionately well at the box office, and for three of these films (Sinners, Mission: Impossible - The Final Reckoning and F1 The Movie), IMAX delivered approximately 20% or more of the opening weekend domestic box office, despite accounting for only 1% of available screens.

In addition to the level of revenues, Content Solutions segment gross margin is influenced by the costs associated with films and other content (documentaries, live, alternative and other) exhibited in the period. The costs associated with films and other content can include production, post-production, distribution and marketing, which are expensed as incurred. For the three months ended June 30, 2025, gross margin percent was 66% compared to 46% in the prior year period. The increase in gross margin was driven by higher level of IMAX box office and a lower mix of self-produced content compared to the prior period.

Technology Products and Services

The primary drivers of Technology Products and Services segment results are the number of IMAX Systems installed in a period, the costs associated with each installation, lease payments tied to the box office performance of the films released to the IMAX network, as well as the associated maintenance contracts that accompany each installation. The average revenue and gross margin per IMAX System under sale and sales-type lease arrangements vary depending upon the number of IMAX System commitments with a single respective exhibitor, an exhibitor’s location, the type of IMAX System sold, and various other factors. The installation of IMAX Systems in theaters or multiplexes, which make up a large portion of the Company’s system backlog, depends primarily on the timing of the construction of those projects, which is not under the Company’s control.

The following table provides information about IMAX Systems installed and the associated revenue recognized at that time, except for traditional JRSAs as revenue is recognized over the lease term, during the three months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars, except number of systems)

For the three months ended June 30, 2025, Technology Products and Services segment revenue increased by $4.7 million, or 9%, while gross margin increased by $4.4 million, or 17%, when compared to the same period in 2024. The higher level of revenue is primarily driven by a higher level of rental revenues, which is box office driven. Rental revenues increased by $5.1 million, as IMAX GBO earned from the Company’s JRSAs increased by $24.1 million in the second quarter of 2025 when compared to the prior year comparative period, from $101.0 million to $125.1 million. Also contributing to the increase in revenue was the higher number of systems recognized under sales and sales-type lease arrangements, per the table above.

The increase in revenues described above were partially offset by a $4.7 million decrease in revenue contribution from the impact of amendments, renewals and other agreements to existing IMAX Systems arrangements.

For the three months ended June 30, 2025, gross margin percent was 54% compared to 51% in the prior period, which primarily reflects the higher level of revenues generated from stronger IMAX box office performance, as described above.

All Other

For the three months ended June 30, 2025, All Other revenue and gross margin decreased by $0.9 million and $1.0 million, respectively, when compared to the same period in 2024. All Other primarily reflects the results of the Company’s Streaming and Consumer Technology business.

Selling, General and Administrative Expenses

The following table presents information about the Company’s Selling, General and Administrative Expenses for the three months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars)

For the second quarter of 2025, the lower level of Selling, General and Administrative Expenses year-over-year reflects management’s continued focus on operational efficiencies, including workforce reductions. Additionally, in the period, the Company recognized $2.5 million in benefits resulting from an Employee Retention Credit as a reduction to Selling, General and Administrative expenses, partially offset by higher annual incentive compensation costs.

Research and Development

For the three months ended June 30, 2025, Research and Development expenses were $1.5 million, compared to an expense of $2.0 million during the same period in the prior year. The reduction year-over-year was primarily driven by the capitalization of film camera costs in accordance with the achievement of technological feasibility in 2024. The Company continues to expense its investment in other projects, including in the development of new Streaming and Technology product offerings and improvements to its existing IMAX System product suite.

Credit Loss (Reversal) Expense, Net

For the three months ended June 30, 2025, the Company recorded a credit loss reversal of $0.2 million, as compared to a credit loss expense of $0.1 million recognized in the prior year.

Stronger box office performance in the year has contributed to a notable improvement in collections. The resurgence in theatrical attendance, driven by a robust film slate, has increased and accelerated cash inflows from studio and exhibitor customers. This trend reflects both the sustained consumer demand for premium cinematic experiences and the effectiveness of our strategic initiatives in global distribution and exhibition.

Management’s judgments regarding expected credit losses are based on the facts available to management at the time that the Condensed Consolidated Financial Statements are prepared and involve estimates about the future. As a result, the Company’s judgments and associated estimates of credit losses may ultimately prove, with the benefit of hindsight, to be incorrect. (Refer to Note 3 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1.)

Interest Expense and Interest Income

For the three months ended June 30, 2025, interest expense was $1.9 million, representing an decrease of $0.4 million, or 16% when compared to interest expense of $2.3 million during the same period of the prior year primarily due to a lower level of borrowings under the Credit Facility in the current period. For the three months ended June 30, 2025 and 2023, interest income was $1.1 million and $0.6 million, respectively.

Income Taxes

For the three months ended June 30, 2025, the Company recorded an income tax expense of $1.2 million (2024 — tax benefit of $4.0 million). The Company’s effective tax rate of 8.9% for the three months ended June 30, 2025, reflects the geographic allocation of income earned in taxing jurisdictions and reflects a decrease in the valuation allowance.

During the three months ended June 30, 2024, the Company completed an internal asset sale to more closely align its intellectual property ownership with its operations. In order to effect this internal asset sale, transactions between entities within the group resulted in capital gains for tax purposes. The tax expense related to the capital gain was partially offset by the reversal of the valuation allowance. Net deferred tax assets were also recorded on the transaction, resulting in a net tax benefit of $7.7 million.

Non-Controlling Interests

For the three months ended June 30, 2025, the net income attributable to non-controlling interests of the Company’s subsidiaries was $1.0 million, a decrease of $0.5 million, when compared to the same period in 2024, primarily due to lower revenues recognized from sales arrangements and renewals in Greater China.

Restructuring and Other Charges

For the three months ended June 30, 2025, the Company recorded $0.8 million (2024 — $nil) of restructuring and other charges. These charges are associated with continued strategic initiatives aimed at enhancing operational efficiency, reducing costs, and optimizing the Company’s organization structure. Specifically, the Company incurred $0.5 million in connection with the continued implementation of its plan to optimize its organizational structure, including the elimination of redundant roles, addressing spans and layers to capture efficiencies and centralize certain operational roles. Additionally, the Company incurred $0.3 million of non-recurring fees relating to the 2024 internal asset sale.

Results of Operations for the Six Months Ended June 30, 2025 and 2024

Net Income and Adjusted Net Income Attributable to Common Shareholders

The following table presents the Company’s net income attributable to common shareholders and the associated per diluted share amounts, as well as adjusted net income attributable to common shareholders* and adjusted net income attributable to common shareholders per diluted share for the six months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars, except per diluted share amounts)

Revenues and Gross Margin

For the six months ended June 30, 2025, the Company’s revenues and gross margin increased by $10.3 million, or 6%, and $16.0 million, or 18%, respectively, when compared to same period in 2024, principally due to a higher number of installations and stronger IMAX box office performance driven by a record Chinese New Year period and the summer Hollywood box office.

The following table presents the Company’s revenue, gross margin, and gross margin percentage by reportable segment for the six months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars)

Content Solutions

Content Solutions segment results are influenced by the level of commercial success and box office performance of the films and other content released to the IMAX network, as well as other factors, including the timing of the releases, the timing of documentary downstream sales, the length of play across the IMAX network, the box office share take rates under the Company’s Film Remastering and distribution arrangements, the level of marketing spend associated with the releases in the year, and fluctuations in the value of foreign currencies versus the U.S. Dollar.

For the six months ended June 30, 2025, Content Solutions segment revenues and gross margin decreased by $0.9 million, or 1%, and increased by $7.7 million, or 20%, respectively, when compared to the same period in 2024. The decrease in revenue compared to the prior period is primarily driven by revenue earned from the completion of the sale of the worldwide commercial and streaming rights of the Company’s original documentary, The Blue Angels, to Amazon Content in the first half of 2024.

The positive impact of The Blue Angels documentary in 2024 on revenue was mostly offset by higher box office generated across the IMAX network for the six months ended June 30, 2025, when compared to the prior year period. In the six months ended June 30, 2025, box office generated by IMAX films, including booking fees, totaled $579.2 million, a $112.1 million, or 24%, increase versus the prior year comparative period of $467.2 million. This growth was primarily driven by the stronger IMAX box office performance of the IMAX local language film slate in 2025. During the six months ended June 30, 2025, IMAX box office was generated by the exhibition of 56 films and other content (54 new films and 2 re-releases), including the following Hollywood titles, Mission: Impossible - The Final Reckoning ($75 million), Sinners ($39 million), F1 The Movie ($31 million) and Thunderbolts ($31 million). In addition, in the six months ended June 30, 2025, local language films exhibited across the Company’s global network generated over $222 million in box office, representing 38% of its global box office. The Chinese local language film, Ne Zha 2, became the highest grossing IMAX release of all time in China ($166 million, including booking fees) and contributed to the highest grossing Chinese New Year in the Company’s history. In the six months ended June 30, 2024, IMAX box office was generated by the exhibition of 60 films (46 new films and 14 films originally released in a prior year).

In the first half of 2025, the Company released six movies that were filmed with IMAX proprietary cameras (Filmed For IMAX): Sinners, Thunderbolts, Final Destination: Bloodlines, Mission: Impossible - The Final Reckoning, How To Train Your Dragon and F1 The Movie. Filmed For IMAX movies traditionally perform disproportionately well at the box office, and for three of these films (Sinners, Mission: Impossible - The Final Reckoning and F1 The Movie), IMAX delivered approximately 20% or more of the opening weekend domestic box office, despite accounting for only 1% of available screens.

In addition to the level of revenues, Content Solutions segment gross margin is influenced by the costs associated with films and other content exhibited in the period. These costs can include production, post-production, distribution, and marketing, which are expensed as incurred. For the six months ended June 30, 2025, gross margin percent was 67% compared to 55% in the prior quarter period. This increase was driven by a higher level of IMAX box office, a lower mix of self-produced content expensed compared to the prior period.

Technology Products and Services

The primary drivers of Technology Products and Services segment results are the number of IMAX Systems installed in a period, the costs associated with each installation, lease payments tied to the box office performance of the films released to the IMAX network, as well as the associated maintenance contracts that accompany each installation. The average revenue and gross margin per IMAX System under sale and sales-type lease arrangements vary depending upon the number of IMAX System commitments with a single respective exhibitor, an exhibitor’s location, the type of IMAX System sold, and various other factors. The installation of IMAX Systems in theaters or multiplexes, which make up a large portion of the Company’s system backlog, depends primarily on the timing of the construction of those projects, which is not under the Company’s control.

The following table provides information about IMAX Systems installed and the associated revenue recognized at that time, except for traditional joint revenue sharing arrangements as revenue is recognized over the lease term, during the six months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars, except number of systems

Included in the table above are three IMAX Systems that were relocated from their original locations (2024 ― two IMAX Systems). When a system under a sale or sales-type lease arrangement is relocated, the amount of revenue earned by the Company may vary from transaction to transaction and is usually less than the amount earned for a new sale. In certain situations when a system is relocated, the original location is upgraded to an IMAX Laser System.

For the six months ended June 30, 2025, Technology Products and Services segment revenue and gross margin increased by $12.2 million, or 13%, and $9.9 million, or 20%, respectively, when compared to the same period in the prior year. The higher level of revenue is primarily driven by a higher level of rental revenues, which is box office dependent. Rental revenues increased by $5.2 million, driven by IMAX GBO from joint revenue sharing arrangements which increased by $38.8 million in the six months ended June 30, 2025 when compared to the prior year comparative period, from $226.4 million to $265.2 million. Also contributing to the increase in revenue was the number of systems recognized under sales and sales-type lease arrangements, per the table above.

The increases in revenue were partially offset by a $4.2 million decrease in revenue contribution from the impact of amendments, renewals and other agreements to existing IMAX Systems arrangements.

For the six months ended June 30, 2025, gross margin percent was 56% compared to 52% in the prior period, which primarily reflects the higher level of revenues, as described above.

All Other

For the six months ended June 30, 2025, All Other revenue and gross margin decreased by $1.0 million, and $1.7 million, respectively, when compared to the same period in 2024. All Other primarily reflects the results of the Company’s Streaming and Consumer Technology business.

Selling, General and Administrative Expenses

The following table presents information about the Company’s Selling, General and Administrative Expenses for the six months ended June 30, 2025 and 2024:

(In thousands of U.S. Dollars)

For the six months ended June 30, 2025, the lower level of Selling, General and Administrative Expenses year-over-year reflects management’s continued focus on operational efficiencies, including workforce reductions. Additionally, in the period, the Company recognized $2.5 million in benefits resulting from an Employee Retention Credit as a reduction to Selling, General and Administrative expenses, partially offset by higher annual incentive compensation costs.

Research and Development

For the six months ended June 30, 2025, Research and Development expenses were $2.9 million, representing a decrease of $1.4 million, or 32%, when compared to Research and Development expenses of $4.2 million during the same period in the prior year. The reduction year-over-year was primarily driven by the capitalization of film camera costs in accordance with the achievement of technological feasibility in 2024. The Company continues to expense its investment in other projects, including in the development of new Streaming and Technology product offerings and improvements to its existing IMAX System product suite.

Credit Loss (Reversal) Expense, Net

For the six months ended June 30, 2025, the Company recorded a credit loss reversal of $0.3 million, as compared to a credit loss expense of $0.2 million recognized in the prior year.

Stronger box office performance in the year has contributed to a notable improvement in collections. The resurgence in theatrical attendance, driven by a robust film slate, has increased and accelerated cash inflows from studio and exhibitor customers. This trend reflects both the sustained consumer demand for premium cinematic experiences and the effectiveness of our strategic initiatives in global distribution and exhibition.

Management’s judgments regarding expected credit losses are based on the facts available to management at the time that the Condensed Consolidated Financial Statements are prepared and involve estimates about the future. As a result, the Company’s judgments and associated estimates of credit losses may ultimately prove, with the benefit of hindsight, to be incorrect. (Refer to Note 3 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1).

Interest Expense and Interest Income

For the six months ended June 30, 2025, interest expense was $3.7 million, representing a decrease of $0.5 million, or 12%, as compared to $4.2 million during the same period of the prior year primarily due to a lower level of borrowings under the Credit Facility in the current period. For the six months ended June 30, 2025 and 2024, interest income was $1.7 million and $1.1 million, respectively.

Income Taxes

For the six months ended June 30, 2025, the Company recorded an income tax expense of $8.5 million (2024 — tax expense of $1.2 million). The Company’s effective tax rate of 29.4% for the six months ended June 30, 2025, reflects the geographic allocation of income earned in taxing jurisdictions and also reflects an increase in the valuation allowance, withholding taxes and a tax benefit related to share-based compensation.

Non-Controlling Interests

For the six months ended June 30, 2025, the net income attributable to non-controlling interests of the Company’s subsidiaries was $6.8 million, an increase of $3.2 million, when compared to the same period in 2024, which reflects a higher level of IMAX box office earned in Greater China.

Restructuring and Other Charges

For the six months ended June 30, 2025, the Company recorded $0.8 million (2024 — $nil) of restructuring and other charges. These charges are associated with continued strategic initiatives aimed at enhancing operational efficiency, reducing costs, and optimizing the Company’s organization structure. Specifically, the Company incurred $0.5 million in connection with the implementation of its plan to optimize its organizational structure, including the elimination of redundant roles, addressing spans and layers to capture efficiencies and centralize certain operational roles. Additionally, the Company incurred $0.3 million of non-recurring fees relating to the 2024 internal asset sale.

CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

The discussion below summarizes our cash flows from operating, investing, and financing activities as reflected in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024.

(In thousands of U.S. Dollars)

Net cash provided by the Company’s operating activities increased $6.1 million in the six months ended June 30, 2025, compared to the corresponding prior year period, primarily due to an increase in the net income earned in the current period. This increase was partially offset by an decrease in cash provided by working capital expenditures. (Refer to Note 9 to Condensed Consolidated Financial Statements in Item 1. for more information on the Company’s change in other operating assets and liabilities.)

Net cash used in investing activities increased $6.4 million in the six months ended June 30, 2025, compared to the corresponding prior year period, primarily due to an increase in the level of investment in equipment contributed to the Company’s JRSAs with exhibitor customers and capital expenditures. In the six months ended June 30, 2025, the Company installed 31 systems under JRSAs compared to 23 systems in the prior year comparative period.

Net cash provided by financing activities decreased $6.1 million in the six months ended June 30, 2025, compared to the corresponding prior year period, mainly driven by a decrease in net borrowings under the revolving credit facilities, an increase in cash paid for taxes withheld on employee stock awards vested, offset by a decease in share repurchases.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2025, the Company’s principal sources of liquidity included: (i) its balances of cash and cash equivalents of $109.3 million; (ii) the anticipated collection of trade accounts receivable, which includes amounts owed under JRSAs and Film Remastering and distribution agreements with movie studios; (iii) the anticipated collection of financing and variable consideration receivables due in the next 12 months under sale and sales-type lease arrangements for systems currently in operation; and (iv) installment payments expected in the next 12 months under sale and sales-type lease arrangements in backlog. Under the terms of the Company’s typical sale and sales-type lease agreements, the Company receives substantial cash payments before it completes the performance of its contractual obligations.

In addition, as of June 30, 2025, the Company had $252.0 million in available borrowing capacity under its Sixth Amended and Restated Credit Agreement (the “Credit Agreement”), $26.5 million in available borrowing capacity under the IMAX (Shanghai) Multimedia Technology Co., Ltd. (“IMAX Shanghai”) revolving credit facility with the Bank of China (the “Bank of China Facility”), and $27.9 million in available borrowing capacity under IMAX Shanghai’s revolving credit facility with HSBC Bank (China) Company Limited, Shanghai Branch (the “HSBC China Facility”). On July 14, 2025, the Company entered into the New Credit Agreement, which increases the Company’s borrowing capacity to $375.0 million. (Refer to “Borrowings — Revolving Credit Facility Borrowings, Net” in Note 6 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 for a description of the material terms of the Credit Agreement, the Bank of China Facility, and the HSBC Facility.)

The Company’s $109.3 million balance of cash and cash equivalents as of June 30, 2025 (December 31, 2024 — $100.6 million) included $100.9 million in cash held outside of Canada (December 31, 2024 — $85.4 million), of which $61.5 million was held in the People’s Republic of China (the “PRC”) (December 31, 2024 — $47.5 million). Management reassessed its strategy with respect to the most efficient means of deploying the Company’s capital resources globally and determined that historical earnings of certain foreign subsidiaries in excess of amounts required to sustain business operations would no longer be indefinitely reinvested. During the six months ended June 30, 2025, no historical earnings from a subsidiary in the PRC were distributed (2024 — $nil) and, as a result, no foreign withholding taxes were paid to the relevant tax authorities (2024 — $nil). As of June 30, 2025, the Company’s Condensed Consolidated Balance Sheets included a deferred tax liability of $12.5 million for the applicable foreign withholding taxes associated with the remaining balance of non-repatriated historical earnings that will not be indefinitely reinvested outside of Canada. These taxes will become payable upon the repatriation of any such earnings.

The Company forecasts its future cash flow and short-term liquidity requirements on an ongoing basis. These forecasts are based on estimates and may be materially impacted by factors that are outside of the Company’s control (including the factors described in “Risk Factors” in Part I, Item 1A of the Company’s 2024 Form 10-K as supplemented by “Risk Factors” in Part II, Item 1A of this Form 10-Q). As a result, there is no guarantee that these forecasts will come to fruition and that the Company will be able to fund its operations through cash flows from operations. In particular, the Company’s operating cash flows and cash balances will be adversely impacted if management’s projections of future signings and installations of IMAX Systems and box office performance of IMAX content are not realized.

The Company also has certain significant contractual obligations and commitments that have been disclosed in “Contractual Obligations” in Part II, Item 7 of the Company’s 2024 Form 10-K. There are no material changes to these obligations and commitments as of June 30, 2025.

Based on the Company’s current cash balances and operating cash flows, management expects to have sufficient capital and liquidity to fund its anticipated operating needs and capital requirements during the next twelve-month period following the date of this report.

OFF-BALANCE SHEET ARRANGEMENTS

There are currently no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the Company’s financial condition.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements and related disclosures in accordance with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the Company’s Condensed Consolidated Financial Statements and accompanying notes. Management’s judgments, assumptions, and estimates are based on historical experience, future expectations, and other factors that are believed to be reasonable as of the date of the Company’s Condensed Consolidated Financial Statements. Actual results may ultimately differ from the Company’s original estimates, as future events and circumstances sometimes do not develop as expected, and the differences may be material. For more information on the Company’s critical accounting estimates refer to the section entitled “Critical Accounting Estimates” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2024 Form 10-K.

RECENTLY ISSUED ACCOUNTING STANDARDS

Refer to Note 2 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 for a discussion of recently issued accounting standards and their impact on the Company’s Condensed Consolidated Financial Statements.

NON-GAAP FINANCIAL MEASURES

GAAP refers to generally accepted accounting principles in the United States of America. In this report, the Company presents financial measures in accordance with GAAP and also on a non-GAAP basis under the SEC regulations. Specifically, the Company presents the following non-GAAP financial measures as supplemental measures of its performance:

• Adjusted net income or loss attributable to common shareholders;
• Adjusted net income or loss attributable to common shareholders per basic and diluted share;
• EBITDA;
• Adjusted EBITDA per Credit Facility; and
• Adjusted Selling, general and administrative expenses.

Adjusted net income or loss attributable to common shareholders and adjusted net income or loss attributable to common shareholders per basic and diluted share exclude, where applicable: (i) share-based compensation; (ii) realized and unrealized investment gains or losses; (iii) restructuring and other charges; and (iv) employee retention credits, and as well as the related tax impact of these adjustments.

The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company’s financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net income attributable to common shareholders. Although share-based compensation is an important aspect of the Company’s employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.

Reconciliations of net income attributable to common shareholders and the associated per share amounts to adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share are presented in the tables below.

(In thousands of U.S. Dollars, except per share amounts)

58

(In thousands of U.S. Dollars, except per diluted share amounts)

In addition to the non-GAAP financial measures discussed above, management also uses “EBITDA,” as such term is defined in the Credit Agreement, and which is referred to herein as “Adjusted EBITDA per Credit Facility.” As defined in the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Accordingly, this non-GAAP financial measure is presented to allow a more comprehensive analysis of the Company’s operating performance and to provide additional information with respect to the Company’s compliance with its Credit Agreement requirements, when applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company’s industry to evaluate, assess and benchmark the Company’s results.

EBITDA is defined as net income or loss excluding: (i) income tax expense or benefit; (ii) interest expense, net of interest income; (iii) depreciation and amortization, including film asset amortization; and (iv) amortization of deferred financing costs. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) realized and unrealized investment gains or losses; (iii) restructuring and other charges; and (iv) write-downs, net of recoveries, including asset impairments and credit loss expense or reversal.

Reconciliations of net income attributable to common shareholders, which is the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA per Credit Facility are presented in the tables below:

(In thousands of U.S. Dollars)

(In thousands of U.S. Dollars)

The Company also adjusts Selling, General and Administrative Expenses to exclude a portion of share-based compensation and related payroll taxes. Management uses non-GAAP and other financial measures such as this, internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. IMAX believes that this non-GAAP measure provides useful information about operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to key metrics used by management and its financial and operational decision making.

A reconciliation of Selling, General and Administrative Expenses, the most directly comparable GAAP measure presented in the Condensed Consolidated Statement of Operations in Part I, Item 1, to Adjusted Selling, General and Administrative Expenses is presented in the table below.

(In thousands of U.S. Dollars)

The Company cautions users of its financial statements that these non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered in isolation, or as a substitute for, or superior to, the comparable GAAP amounts.

The Company is exposed to market risk from foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. Market risk is the potential change in an instrument’s value caused by, for example, fluctuations in interest and currency exchange rates. The Company’s primary market risk exposure is the risk of unfavorable movements in exchange rates between the U.S. Dollar, the Canadian Dollar, and Chinese Renminbi (“RMB”). The Company does not use financial instruments for trading or other speculative purposes.

Foreign Exchange Rate Risk

A majority of the Company’s revenue is denominated in U.S. Dollars while a significant portion of its costs and expenses is denominated in Canadian Dollars. A portion of the Company’s net U.S. Dollar cash flows is converted to Canadian Dollars to fund Canadian Dollar expenses through the spot market. In addition, IMAX films generate box office in 89 different countries, and therefore unfavorable exchange rates between applicable local currencies and the U.S. Dollar could have an impact on the GBO generated by the Company’s exhibitor customers and its revenues. For example, the impact of changes in foreign currency valuations versus the U.S. Dollar led to a decrease in IMAX GBO of approximately $64 million as compared to those in 2019. The Company has incoming cash flows from its revenue generating IMAX network and ongoing operating expenses in China through its majority-owned subsidiary IMAX Shanghai. In Japan, the Company has ongoing Yen-denominated operating expenses related to its Japanese operations. Net RMB and Japanese Yen cash flows are converted to U.S. Dollars through the spot market. The Company also has cash receipts under leases denominated in RMB, Japanese Yen, British Pound Sterling, Euros and Canadian Dollars.

The Company manages its exposure to foreign exchange rate risks through its regular operating and financing activities and, when appropriate, through the use of derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures as well as reduce earnings and cash flow volatility resulting from shifts in market rates.

Certain of the Company’s PRC subsidiaries held approximately RMB 436.6 million ($61.0 million) in cash and cash equivalents as of June 30, 2025 (December 31, 2024 — RMB 341.1 million or $47.5 million) and are required to transact locally in RMB. Foreign currency exchange transactions, including the remittance of any funds into and out of the PRC, are subject to controls and require the approval of the China State Administration of Foreign Exchange to complete. Any developments relating to the Chinese economy and any actions taken by the Chinese government are beyond the control of the Company; however, the Company monitors and manages its capital and liquidity requirements to ensure compliance with local regulatory and policy requirements. (Refer to “Risk Factors – The Company faces risks in connection with its significant presence in China and the continued expansion of its business there” in Part I, Item 1A. of this Form 10-Q.)

Management also monitors the macroeconomic environment as part of its continuous assessment of credit risk. This includes consideration of developments in the U.S. and global banking sectors, which informs management’s assessment of any potential direct and indirect impacts on the Company. There are no concentrations of cash and cash equivalents in any regional banking institutions, such that management considers there to be any material risk in this regard.

For the three and six months ended June 30, 2025, the Company recorded a foreign exchange net gain of $0.2 million and net loss of $0.2 million respectively, resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities (2024 — net losses of $0.2 million and $0.5 million, respectively).

The Company has entered into a series of foreign currency forward contracts to manage the risks associated with the volatility of foreign currencies. Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continue to meet hedge effectiveness tests as of June 30, 2025, with settlement dates throughout 2025 and 2026. Foreign currency derivatives are recognized and measured on the Condensed Consolidated Balance Sheets at fair value. Changes in the fair value (i.e., gains or losses) are recognized in the Condensed Consolidated Statements of Operations except for derivatives designated and qualifying as foreign currency cash flow hedging instruments. The Company currently has cash flow hedging instruments associated with Selling, General and Administrative Expenses. For foreign currency cash flow hedging instruments related to Selling, General and Administrative Expenses, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported within Accumulated Other Comprehensive Income (Loss) and reclassified to the Condensed Consolidated Statements of Operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the Condensed Consolidated Statements of Operations.

The notional value of foreign currency cash flow hedging instruments that qualify for hedge accounting as of June 30, 2025 was $51.3 million (December 31, 2024 — $48.4 million). Gains of $2.5 million and $1.8 million were recorded to Other Comprehensive Income with respect to the change in fair value of these contracts for the three and six months ended June 30, 2025, respectively (2024 — losses of $0.4 million and $1.3 million, respectively). Losses of $0.3 million and $1.6 million were reclassified from Accumulated Other Comprehensive Loss to Selling, General and Administrative Expenses for the three and six months ended June 30, 2025, respectively (2024 — loss of $0.1 million and $0.1 million, respectively). The Company currently does not hold any derivatives which are not designated as hedging instruments.

For all derivative instruments, the Company is subject to counterparty credit risk to the extent that the counterparty may not meet its obligations to the Company. To manage this risk, the Company enters into derivative transactions only with major financial institutions.

As of June 30, 2025, the Company’s Financing Receivables and working capital items denominated in Canadian Dollars, RMB, Japanese Yen, Euros and other foreign currencies translated into U.S. Dollars was $167.8 million. Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates as of June 30, 2025, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been $16.8 million. A significant portion of the Company’s Selling, General, and Administrative Expenses is denominated in Canadian Dollars. Assuming a 1% change appreciation or depreciation in foreign currency exchange rates as of June 30, 2025, the potential change in the amount of Selling, General, and Administrative Expenses would be $0.1 million.

Interest Rate Risk Management

The Company’s earnings may also be affected by changes in interest rates due to the impact those changes have on its interest income from cash, and its interest expense from variable-rate borrowings that may be made under the Credit Facility.

As of June 30, 2025, the Company had drawn down $48.0 million on its Credit Facility (December 31, 2024 — $37.0 million), and $nil on its HSBC China Facility (December 31, 2024 — $nil) and $nil on its Bank of China Facility (December 31, 2024 — $nil), which are subject to variable effective interest rates.

The Company had variable rate debt instruments representing 10% and 8% of its total liabilities as of June 30, 2025 and December 31, 2024, respectively. If the interest rates available to the Company increased by 10%, the Company’s interest expense would increase by $0.3 million and interest income from cash would increase by $0.3 million. These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances as of June 30, 2025.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the specified time periods and that such information is accumulated and communicated to management, including the CEO and Chief Financial Officer (“CFO”), to allow timely discussions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

The Company’s management, with the participation of its CEO and its CFO, has evaluated the effectiveness of the Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of June 30, 2025 and has concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective. The Company will continue to periodically evaluate its disclosure controls and procedures and will make modifications from time to time as deemed necessary to ensure that information is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting which occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

This Form 10-Q should be read together with, and supplement, the risk factors in Item 1A “Risk Factors” in the Company’s 2024 Form 10-K, which describes various risks and uncertainties to which the Company is or may become subject. The risk factor below updates certain risk factors included in the Company’s 2024 Form 10-K in light of recent events. The below risk factor and the risk factors included in the Company’s 2024 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect its business, financial condition and/or operating results.

The Company’s business may be materially adversely affected by the imposition of tariffs and other trade barriers and retaliatory countermeasures implemented by the United States and other governments.

Recently, the U.S. government has implemented substantial and rapidly evolving changes to U.S. trade policies, including increased tariffs and changes in U.S. participation in multilateral trade agreements, while other countries, China and Canada in particular, have undertaken retaliatory measures in response to such changes. These changes could adversely impact the Company’s operations, costs and expenses applicable to revenues, and cash flows. While the Company does not believe these changes will materially impact its results for 2025, there can be no guarantees that further changes to U.S. trade policy and/or retaliatory actions by other countries will not occur.

Additionally, uncertainty about global trade relationships has and may continue to increase market volatility, currency exchange rate fluctuation, and economic instability, which may adversely impact the Company’s results of operations. Furthermore, any resulting downturn or increase in geopolitical tensions may adversely impact consumers’ discretionary income and/or adversely affect consumer purchasing behavior, which could have a material adverse effect on box office receipts and on our results of operations and financial condition.

The extent and duration of increased tariffs, retaliatory actions, and the resulting impact of both on general economic conditions around the world and on the global filmed entertainment industry in particular, are uncertain and depend on numerous factors, such as the responses of and negotiations among the affected countries. As such, we cannot predict the impact to our business from any future changes to the trading relationships between the U.S. and other countries or the impact of new laws or regulations adopted by the U.S. or other countries. Furthermore, any adverse development in these areas could exacerbate risks discussed in “Risk Factors – The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales, and future growth prospects,” “Risk Factors –The Company faces risks in connection with its significant presence in China and the continued expansion of its business there,” and “Risk Factors –General political, social and economic conditions can affect the Company’s business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems” in Part I, Item 1A of the Company’s 2024 Form 10-K.