Box Office Slowdown Hits Imax As Quarterly Revenue Falls

Imax released its fourth quarter earnings on Tuesday, and posted slightly lower net earnings on falling overall revenues.

That came amid tentpoles like Aquaman and the Lost Kingdom, Taylor Swift: The Eras Tour and Wonka playing on the cinema technology company’s big screens. Overall fourth-quarter revenue came to $86 million, down 12 percent from a year-earlier $98 million when Imax was experiencing a rapid reopening of cinemas in China.

The large-format exhibitor recorded net income of $2.5 million, which compared to a profit of $2.6 million in the same period last year. During the latest quarter, the adjusted per-share profit in Q4 came to 11 cents, down 11 percent from a year-earlier per-share profit of 19 cents.

That beat a Zacks Consensus Estimate projection that Imax would post quarterly per-share earnings of 10 cents, but missed on a forecast for overall revenues to reach $89.59 million.

Amid a box office recovery for Hollywood coming out of the pandemic, Imax is looking to leverage increasing demand for new and upgraded theater systems around the world. The Toronto-based company in 2023 signed agreements for 129 new and upgraded Imax systems worldwide, with 36 different exhibition clients across 26 territories worldwide.

Over the last year, Imax said it delivered its highest number of signings ever in key European and Asian markets like France, Thailand, Indonesia and Malaysia.

Other 2023 highlights include record North American box office of $393 million, and a global box office of nearly $1.1 billion last year. That’s the second-highest grossing year ever for Imax and up 25 percent over 2022 and 2 percent over its 2017-2019 average and included the Imax film camera shot-Oppenheimer earning over $185 million globally for Imax.

Imax CEO Richard Gelfond on an after-market analyst call to discuss his latest financial results predicted strong box office after the upcoming premiere of Dune: Part Two on Imax screens. “The film was shot entirely with Imax cameras and will receive a limited run in Imax 70mm film,” he said.

“Although the 2024 Hollywood slate has clearly been impacted by the strikes, we remain optimistic given the strong indexing we’re driving on a title-by-title basis and a consistently high share of box office we capture in the post-pandemic world,” Gelfond added.

And record local language box office of $227 million was reached in global ticket receipts from films across China, India, France and Japan, as well as Malaysia and Thailand. On the analyst call, Gelfond talked up local language box office for the rest of 2024 as “very promising,” especially in China where “we expect the summer season to be our best ever.”

He also touched on the continuing box office recovery in China, where Gelfond remains optimistic. “I have a pretty positive outlook over the next couple years. The macro trends appear good and movies are still an economically affordable luxury, and Imax particularly even at a premium price point has done very well,” he told analysts, even as the Imax boss added “there’s still a few variables that have to sort themselves out.”

Imax is also targeting other Asian markets like India, Korea and beyond for increased local language film play this year. “I’ll think we’ll have more movies than we had last year,” Gelfond forecast.