The box office recovery at Imax continued during the first quarter amid a record-breaking box office performance in China and a strong slate of “Filmed for Imax” titles released into theaters, including Captain America: Brave New World and Ryan Coogler’s Sinners opening strongly last weekend.
Overall revenue at the cinema technologies company came to $86.7 million, up 10 percent from a year-earlier $79.1 million. That beat a Wall Street analyst projection of Imax posting Q1 revenues at $84.23 million.
Imax posted net income at $8.2 million, up 52 percent from a year-earlier $5.4 million. The adjusted net income per share in Q1 came to 13 cents, which fell 13 percent from a per-share loss of 15 cents in the same year-ago period.
Technology Products and Services revenues, or the proceeds from the sale, lease and maintenance of Imax’s theater systems network, rose 17 percent to $51 million. During the latest quarter, Imax installed 21 theater systems, compared to 15 systems in the same period of last year.
Content Solutions revenues — or business from agreements with the major studios and filmmakers — at $34 million, was up 1 percent from a year-earlier $32.1 million, on the strength of strong box office growth worldwide. Other big screen performers for Imax include Mickey and the Interstellar re-release.
The first quarter global box office at $298 million, up 12 percent year-on-year, was lifted by a record-breaking Chinese New Year holiday, which delivered $182 million in box office in China. Here the big performer was Ne Zha 2, which earned over $164 million on Imax screens in China, which marked the company’s highest ever grossing local language animated release in that market.
During an after-market analyst call, Imax CEO Rich Gelfond said China signaling it will reduce the number of Hollywood tentpoles screening in that market to retaliate against U.S. tariffs was not expected to greatly impact his company. “We’re highly confident that the ‘moderate reduction’ in Hollywood imports announced by the China Film Administration will largely target films with limited box office potential in the market and with smaller budgets, not the kind of films that drives Imax’s business,” he argued after talks with the Hollywood studios and exhibition partners in China.
The China Film Administration, the body that handles film releases and quotas in the country, recently said it would “moderately reduce” the number of American films the country imports in response to U.S.President Donald Trump’s tariffs, and will look to increase film imports from other countries.
“So we’re not letting the noise distract us from the opportunity ahead,” Gelfond added, as Imax also looks to screen more local language movie titles in China, Japan and India. The popularity of Hollywood films in China has eroded drastically in the past several years, but top U.S. tentpoles on which Imax depends to drive its release slate can still occasionally bring in substantial revenue.
Gelfond said Hollywood studios he had spoken to reported they expect all their buzzy tentpoles with top directors and stars to get into China, including Thunderbolts set to open in that Asian market next week. “I remain very confident about China in a lot of ways. And I don’t think that the moderate film reduction will have a material impact on Imax,” he added.
“If China suffered from small films, it’s of very little concern to me,” a bullish Gelfond argued as he appeared at one point during the conference call to get frustrated with a slew of questions from analysts over his company’s prospects in China. “I’m not even being ambiguous or covering myself. I just couldn’t be clearer about this.”
Gelfond also touted an increased supply of Hollywood movies on his screens that were shot with Imax cameras. Coogler’s Sinners, shot in Imax’s premium format, bowed in its own and standard theaters last weekend and blew past industry expectations by earnings $45.6 million domestically during the Easter box office race. Other Filmed for Imax releases set for this summer include Thunderbolts, Mission: Impossible — The Final Reckoning, How to Train Your Dragon, F1 and The Fantastic Four.
“As we open our content aperture, we continue to drive incremental box office with our growing slate of events and experiences,” Gelfond told analysts. He also weighed in on the evolving theatrical movie release windowing debate in Hollywood to help boost the recovery of North American exhibitors.
Gelfond argued endorsing exclusive windows of 30 to 45 days or longer had little or no impact on Imax, which typically plays movies on its screens for one or two week runs. “I know this is going to be controversial, but I think they (exhibitors) should really focus on the kind of content, and getting more content, which we’re trying to do with foreign language film and alternate things, and less on whether the window is 30 or 45 days,” he told analysts.
“I think way too much has been made of it. I don’t think that’s going to save the industry. I think more good content and more diversified content is much more important,” Gelfond added.