0001628280-26-028960
SEC filingQ1 2026 revenue declined 6% YoY to $81.4M, driven by lower Greater China box office, partially offset by domestic and international growth.
For the three months ended March 31, 2026, IMAX reported total revenue of $81.4 million, a decrease of 6% compared to $86.7 million in the prior-year period. The decline was primarily driven by a 13% drop in global box office to $259.6 million, largely attributable to weaker local language film performance in Greater China, which faced an exceptionally strong prior-year comparison from the breakout hit Ne Zha 2. This was partially offset by strong growth in domestic (up 75%) and other international markets (up 60%), supported by Hollywood titles such as Avatar: Fire and Ash and the Filmed For IMAX release Project Hail Mary.
Gross profit fell 14% to $45.8 million, and gross margin contracted to 56% from 61% in the prior year. The margin decline was most pronounced in the Content Solutions segment, where gross margin dropped to 58% from 69%, reflecting lower box office in Greater China, a lower mix of higher-margin local language films, and increased marketing spend for upcoming tentpole releases. Technology Products and Services gross margin remained relatively stable at 56% versus 57%.
Net income attributable to common shareholders rose to $4.2 million ($0.07 per diluted share) from $2.3 million ($0.04 per diluted share) in the prior year, benefiting from lower SG&A expenses (down 3% to $32.5 million) and a $0.5 million credit loss reversal. Adjusted net income attributable to common shareholders increased to $9.6 million ($0.17 per diluted share) from $7.2 million ($0.13 per diluted share), reflecting management's focus on operational efficiencies.
Content Solutions revenue declined 8% YoY to $31.4 million, with gross margin falling sharply to 58% from 69%. The segment was impacted by a 13% decrease in global box office, driven by the absence of a major Chinese New Year breakout title in 2026. Local language box office accounted for 24% of global box office ($62 million), led by Pegasus 3 ($34 million). The segment also faced higher marketing costs for upcoming large tentpole releases.
Technology Products and Services revenue decreased 4% YoY to $48.3 million, driven by a $2.6 million decline in rental revenues (box-office-dependent) from JRSAs, particularly in Greater China. This was partially offset by a $3.1 million increase from amendments, renewals, and other adjustments to existing system arrangements. System installations totaled 19 (8 sales-type and 11 traditional JRSAs), compared to 21 in the prior year.
All Other revenue was essentially flat at $1.7 million, reflecting the repositioning of the Streaming and Consumer Technology business under the IMAX Enhanced brand.
Management highlighted a robust upcoming film slate with 34 new films and content experiences announced for the remainder of 2026, including several Filmed For IMAX titles such as The Mandalorian and Grogu, Supergirl, The Odyssey, and Avengers: Doomsday. The company continues to expand its local language strategy, with 17 releases across 9 countries in Q1 2026, and expects to announce additional local language films and exclusive events. Backlog stood at 435 IMAX systems as of March 31, 2026, with 73% scheduled for international markets. Management expects sufficient liquidity to fund operations for the next twelve months, supported by $146.0 million in cash and $382.4 million in available borrowing capacity. However, the company cautioned that future results may be affected by the timing and performance of major film releases, the mix of Hollywood and local language content, and broader macroeconomic conditions.
As of March 31, 2026, IMAX held $146.0 million in cash and cash equivalents (down from $151.2M at year-end 2025). Total debt stood at $290.8 million net of unamortized costs, comprising $46.7M in revolving credit facility borrowings (net of issuance costs) and $244.1M in convertible notes and other borrowings (net). The revolving facility has $326.0M available undrawn. The company's Senior Secured Net Leverage Ratio was a low 0.02x, well below the 3.25x covenant. Shareholders' equity was $427.6M, and deferred revenue was $56.1M.
Note 7 (Commitments, Contingencies and Guarantees) describes non-cancelable payment obligations in the ordinary course but does not provide a quantified table of purchase commitments or off-balance-sheet arrangements. The company discloses financial guarantees under its credit agreement, director/officer indemnifications, and other indemnifications, but no material amounts have been accrued. No specific purchase commitments (e.g., supply agreements) were disclosed.
Buybacks: IMAX has a $500M authorized share repurchase program (extended to June 30, 2026), with $250.7M remaining. No shares were repurchased in Q1 2026. IMAX China also has a separate repurchase authorization (up to 10% of shares) but no activity. Dividends: No dividends declared. Debt: Net debt increased $12.2M primarily from higher revolver borrowings ($49M drawn vs $37M at year-end). During Q1, $0.2M of 2026 convertible notes were converted (settled April 1), and the remaining 2026 notes were settled on April 1, 2026, with the associated capped call terminated. Capex: Total capital expenditures were $6.9M (purchases of PP&E $2.1M, investment in JRSA equipment $4.0M, intangible assets $0.8M), representing 8.5% of total revenues.
The company reports two primary segments in Note 13: Content Solutions and Technology Products and Services.
Geographic revenue (Note 13): United States $29.4M (36%), Greater China $20.6M (25%), Asia (ex-China) $12.2M (15%), Western Europe $11.2M (14%), Latin America $2.5M, Canada $2.2M, Rest of World $3.2M. The largest customer accounted for 11% of total revenues.
CFO of $4.0M was below net income of $6.1M, driven by significant working capital outflows. Key detractions: lease incentives to exhibitors ($8.7M), film assets ($5.4M), and inventories ($3.4M), partially offset by deferred revenue increase ($5.8M). Capex of $2.1M (PP&E) plus $4.0M in equipment for revenue sharing arrangements resulted in total investing outflows of $6.9M. Free cash flow was negative $2.9M after deducting capex from CFO. No share repurchases or dividends were paid. The cash balance decreased by $5.2M to $146.0M. Overall, cash generation weakened due to working capital intensification and higher investment in revenue sharing equipment.