IMAX

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Transcript Summary

IMAX Corporation delivered a solid Q1 2026, reiterating its full-year guidance of a record $1.4 billion global box office. While revenue in Greater China declined 62% due to difficult year-over-year comparisons, the 'Rest of World' markets saw a 67% increase, driven by the overperformance of 'Project Hail Mary' and high demand for Hollywood tentpoles. The company is aggressively expanding its network, recently signing a major 10-system deal with HOYTS in Australia and continuing rapid growth in Japan. Management highlighted a strong multi-year slate including Christopher Nolan's 'The Odyssey' and Denis Villeneuve's 'Dune: Part 3', both of which feature exclusive IMAX sequences. IMAX is also diversifying into alternative content like Formula 1 and music projects. Despite a dip in Q1 EBITDA margins to 38%, the company remains confident in a 45% floor for the full year as marketing spend aligns with major releases. Financial health remains robust with $146 million in cash and low leverage (0.86x). Management dismissed new competitor branding from Disney as a marketing tactic, asserting that IMAX's proprietary camera technology and real-time quality control maintain its status as the premier platform for blockbuster cinema.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

IMAX Corporation: Masking Margin Compression with Variable Accruals and Heavy Share-Based Compensation

Full Earnings Call Transcript — Q1 • 2026-04-30

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the First Quarter 2026 IMAX Corporation Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Jennifer Horsley, Head of Investor Relations. Please go ahead.
Jennifer Horsley: Good afternoon, and thank you for joining us for IMAX's first quarter 2026 earnings conference call. On the call today to review the financial results are Natasha Fernandes, our Chief Financial Officer; and Rob Lister, our Chief Legal Officer. Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted on the Investor Relations section of our site. Our historical Excel model is posted to the website as well. I would like to remind you of the following information regarding forward-looking statements. Today's call as well as the accompanying slide deck may include statements that are forward-looking and that pertain to future results or outcomes. These forward-looking statements are subject to risks and uncertainties that could cause our actual future results to not occur or occurrences to differ. Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes. Any forward-looking statements that are made on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information, future events or otherwise. During today's call, references may be made to certain non-GAAP financial measures. Discussion of management's use of these measures and the definition of these measures as well as a reconciliation to non-GAAP financial measures are contained in this afternoon's press release and our earnings materials, which are available on the Investor Relations page of our website at imax.com. Before we begin, Rich would like to provide a brief update on his recovery, and then the call will turn over to Natasha.
Richard L. Gelfond: Thanks, Jennifer, and good afternoon, everyone. Thanks for joining us today. Natasha will handle today's call and Q&A session. But before I turn it over to her, I wanted to provide a brief update on my recovery from pneumonia. I'm happy to share that I'm making excellent progress, and I'm gradually resuming oversight of the business and involved in all key strategic decisions. Our management team is doing an outstanding job and will continue with their day-to-day responsibilities as well. I want to send my sincerest thanks for your well wishes and kind words of support over these past few weeks. I greatly appreciate it. And I appreciate your time and attention today. With the incredible start to the second quarter and a fantastic slate ahead, I'm as excited as I've ever been about the IMAX business. With that, I'll turn it over to Natasha.
Natasha Fernandes: Thanks, Rich. With the heart of our formidable slate now rolling out, we remain very confident in our 2026 guidance, including a record $1.4 billion in global box office this year. Our story is one of strong growing momentum. It is clearer than ever that IMAX is evolving into something bigger, a global platform for blockbuster films, events and experiences, with the most defined by our technology, relationships and brand, enabling a diversified dynamic content portfolio across Hollywood, local language, documentaries, music, sports, gaming and more. Project Hail Mary, a film for IMAX release delivered an emphatic conclusion to the first quarter and has now earned more than $90 million in IMAX, more than double our initial projections. This excellent performance alongside Avatar Fire and Ash lifted our global box office outside of China, up 67% year-over-year in Q1 and partially offset our lower Greater China box office, where we faced a significant comp against last year's massive Ne Zha 2. That includes growth of 75% in North America and 60% in rest of world markets. Our platform has kicked into high gear. IMAX global box office in the current quarter-to-date is over $100 million, up over 10% year-over-year. We scored 3 consecutive global opening weekends of over $20 million with 3 very different titles for very different audiences. This is the kind of strength across genres, demos and geographies that drove our record performance in 2025. We delivered over 18% of the global box office for Project Hail Mary, including 30% market share in China, proving again the strong indexing we command there for Hollywood's biggest blockbusters. The Super Mario Galaxy Movie was our second biggest animated debut of all time as we continue to grow with family audiences, one of the fastest-growing segments of the box office. And Michael delivered our biggest debut all time for a musical biopic with strong 14% indexing in North America. In local language, Toho's latest Detective Conan in Japan earned a franchise best $3.2 million in IMAX and Dhurandhar 2 notched our second biggest opening weekend ever in India. Our promising slate was on full display at the annual CinemaCon industry convention this month, including an exclusive look at Christopher Nolan's The Odyssey, the first film shot entirely with IMAX film cameras. Everything we've seen and know tells us that it will be something truly special and another incredible entry into our partnership with the Nolans that has yielded over $700 million in IMAX box office worldwide, and a sneak peek at the first 7 minutes of Dune: Part 3, which was also shot with IMAX film and looks to be visually stunning as anything Director Denis Villeneuve has brought to screen. Tickets to select IMAX 70-millimeter screenings of the film recently sold out in minutes, 9 months ahead of its release. Both filmmakers joined us for our recent CEO forum in April, perhaps the most successful in the 13-year history of the event. At the annual event and exclusive gathering of global exhibition CEOs representing at least 3/4 of the world's box office, we also hosted Tom Cruise, Timothee Chalamet and Jon Favreau. It has truly become a signature event for our company and the only C-level gathering where exhibitors, filmmakers and talent and studio chiefs from around the world can engage in strategic off-the-record dialogue about the industry. It also underscores the power of our team and our brand to connect and lead across the ecosystem and deliver value to our partners in countless ways beyond our technology. The Odyssey and Dune stand alongside Jon Favreau's The Mandalorian and Grogu and Greta Gerwig's Narnia at the top of a list of major tentpole films leaning heavily into IMAX in 2026. That includes 1 week run to launch highly anticipated releases, including film for IMAX release Mortal Kombat 2, Steven Speilberg's Disclosure Day, a return to Sci-Fi for the legendary director, Toy Story 5, which will look to continue Pixar's resurgence, Super Girl, also film for IMAX, a follow-up to last year's hit Superman, Minions & Monsters, the latest installment of this franchise phenomenon and the live-action version of Moana following the animated sequels billion-dollar performance in 2024. And we see great potential in other film for IMAX titles, including Zack Cregger's Resident Evil, Street Fighter and the End of Oak Street as well as upside in Tom Cruise's Digger and J.J. Abrams' The Great Beyond. We have a growing lineup of expected Chinese films this year, including 2 releases, Penghu and the film for IMAX title Once Upon a Time in the Middle East that shifted from Chinese New Year and are expected to release later in 2026. We also expect to play Spider-Man: Brand New Day and Avengers: Doomsday across our locations in Greater China and our first film for IMAX releases from Japan and India, Godzilla Minus Zero and Ramayana Part 1 and next year's Varanasi anchor an excellent local language slate internationally. We've also added several high profile releases to our slate, including the film for IMAX sequel to Brendan Frasers, The Money in 2027 and highly anticipated film for IMAX titles in 2028, including Paramount and Activision's live-action feature film, Call of Duty, directed by Peter Berg and written by Berg and Taylor Sheridan, Joe Kosinski's Miami Vice 85 starring Michael B. Jordan and Austin Butler and A24's Elden Ring video game adoption. We also continue to program experiences beyond feature films to strengthen our offering from Formula 1 to some supersonic music projects in the pipeline. Formula 1 is exceeding our expectations with strong presales heading into this weekend's first race in IMAX, The Miami Grand Prix. As we've seen with Project Hail Mary, Baz Luhrman's EPiC, Apple's Formula 1 coverage and The Mandalorian and Grogu, content owners are increasingly leaning on IMAX as a powerful global launch platform with exclusive advanced releases, previews and events. Audiences know that the IMAX experience begins well before and extends far beyond our immersive visual and sound technology. We work directly with the greatest filmmakers in the world on image capture with our proprietary film and certified digital cameras. We offer more picture through our exclusive IMAX expanded aspect ratio. We remaster every film, event and experience we distribute to ensure the highest quality presentation. We monitor all 1,865 of our locations around the world for quality control in real-time 24/7. And as a result, we have incredibly passionate loyal fan base. Our audience engagement scores consistently rival blue-chip brands like Netflix, Nike, Marvel and Amazon. In short, there is no better platform for blockbuster success than the IMAX global platform. This simple fact continues to drive strong global network growth. Last year, we grew IMAX's footprint by 4% in the U.S. and more than 8% in the rest of world markets. Our momentum reflects how exhibitors worldwide view IMAX and the long-term productivity of the network. With IMAX still less than 50% penetrated globally in our latest zoning analysis, we continue to see meaningful runway for growth. Year-to-date, we signed agreements for over 40 new and upgraded IMAX systems worldwide across 10 countries with 18 partners, most recently with our biggest deal ever in one of the most productive markets in the world, our 10-system agreement with HOYTS in Australia and New Zealand, which will nearly double our footprint in the region. Importantly, our sales activity is well distributed geographically with 3 domestic signings, 9 in Australia, over 10 in China, 7 in Japan and 7 across EMEA, including Spain, France, Germany, the Netherlands and Egypt. With more than half of our signings representing new IMAX locations, which are a meaningful driver to our network economics. At the same time, we are selectively upgrading high-performing locations where we see clear opportunities to drive incremental box office. We are seeing particular strength in key high box office markets like Japan, where we have already signed 7 systems year-to-date, continuing the momentum of our 13 signings in 2025. We also expanded our relationship with VieShow in Taiwan with upgrades that will transition the entire circuit to IMAX with laser. We continue to broaden our exhibitors onboarding new partners in Spain, Germany and France. And looking ahead, we are engaged in numerous additional opportunities with leading exhibitors across key markets. We look forward to keeping you updated on our progress. Let's turn now to our first quarter results. Starting with the bottom line, first quarter adjusted net income grew 33% to $10 million, while adjusted EPS grew $0.17, up $0.04 year-over-year. IMAX delivered revenues of $81.4 million, a decline of $5 million year-over-year, driven by decreased revenues in Greater China. Revenue outside of Greater China grew by $15 million. Gross margin declined to $46 million from $53 million in the prior year. Operating expenditures, which includes R&D and SG&A, excluding stock-based compensation, was $28 million for the quarter compared to $30 million in the prior year, reflecting our continued strong cost discipline and timing of spend. Adjusted EBITDA declined in line with revenue, down $6 million year-over-year to $31 million. As a result, adjusted EBITDA margin was 38% compared to 43% in the prior year. We remain confident in our forecast of total adjusted EBITDA margin of more than 50% in the coming year. In our Content Solutions segment, revenues declined 8% to $31 million due to the tough comp in China against last year's massive hit in Ne Zha 2. Box office grew significantly outside of China, including 90% growth in EMEA, while China box office declined 62% due to an exceptionally strong Q1 in the prior year and the timing of major releases this year. We expect IMAX box office in China to be more evenly spread throughout the year versus 2025, where 46% of our China box office came in the first quarter, well beyond the 30% we normally see. Content Solutions delivered gross profit of $18 million, a decline of $5 million driven by lower box office and gross margin declined to 58% versus 69% in the prior year. Turning to our Technology Products and Services segment. IMAX delivered revenues of $48 million, a decline of 4%, driven by lower box office-related system rental revenue in China. Gross profit margin of 56% was in line with gross profit margin of 57% the prior year. We're off to a solid start with system installations installing 19 systems in the first quarter compared to 21 in the prior year and 15 in Q1 of 2024. Of those 19 systems, 11 were joint revenue sharing systems and 8 were sales arrangements, 11 were upgrades and 8 were new locations. These new locations again showcased our diversifying network footprint spread across Japan, England, France, Singapore, South Africa, China and the U.S. Turning to cash flow and the balance sheet. IMAX cash flow from operations was $4 million compared to $7 million in the prior year and includes $8 million in higher year-over-year lease incentives provided to exhibitors to support the building of new IMAX auditoriums. This investment reflects the continued prioritization of our use of available capital to invest in growth, including partnering with exhibitors to expand and upgrade our network through joint revenue sharing arrangements. This strategy will empower IMAX to take full advantage of our expanding brand and market share and the promising slate that continues to take shape for the years ahead. We maintain a strong capital structure, thanks to our asset-light model, and focused execution as well as the work we did last year to refinance our convertible notes and expand our revolving facility. As of March 31, we held $146 million in cash and $300 million in debt with a net leverage of 0.86x. To conclude, the best is yet to come in what we believe will be a record year for IMAX, and our momentum is building. Our exhibitor partners share our excitement for IMAX, our slate and the value we deliver, which is why we've added more than 30 partners worldwide in the past 2 years and continue to dramatically diversify our footprint. As our global box office and network grows, our increased scale will drive expanding margins and cash flows. And we will remain focused on keeping operating expenses substantially flat. We remain very well positioned to achieve our 2026 guidance, including record global box office of $1.4 billion, 160 to 175 system installations worldwide and adjusted EBITDA margin in the [mid-40s percent] at -- with at least 45%. There has never been a better time to be in the IMAX business. We continue to deliver clear evidence that IMAX is not just outperforming the market, but helping to expand it, attracting audiences, growing incremental box office and driving value throughout the ecosystem. Thank you. And with that, I will turn the call over to the operator for Q&A.
Operator: [Operator Instructions] Our first question is going to come from Drew Crum with B. Riley Securities.
Andrew Crum: Rich, good to hear you on the call. Natasha, just on the adjusted EBITDA margin guidance with a floor of 45%, does that assume a global box office of $1.4 billion? And if so, just trying to understand how the margin would be flattish year-on-year with an incremental $100 million plus in box office?
Natasha Fernandes: Drew, so yes, margins really -- it does fluctuate normally quarter-to-quarter. But as you look at the whole year, $1.4 billion box office, I understand the incrementality will come through, but we've chatted about this even on the last call as well is that there's always a mix between the regions of box office, whether you have local language or Hollywood and the amount that we're investing into marketing in this year. There are a lot of Hollywood titles that are significantly larger titles than last year. And as we look towards that, our goal would be to lean in heavily into IMAX and marketing, the titles as well. And so that's where the margins can ebb and flow. And of course, you can capture more than the 45%, but this is just from a guidance perspective, providing that guidance with respect to the floor of the 45%. But of course, there's opportunity in that.
Andrew Crum: Okay. That makes sense. And then any disruptions created by the U.S.-Iran conflict during late 1Q or early 2Q? Anything -- you've seen anything contemplated in your annual outlook?
Natasha Fernandes: No, not at all. It's not for us. We know we have about 35 locations within the region in the Middle East and majority are continuing to operate. We haven't experienced anything significant that has -- will impact our plans for the year as well. And as you heard, we continue to expect to install 160 to 175 systems as well. So if you look at the way that we're building out our entire worldwide network, there's many countries that we're leaning into. And one of those is Australia that we just signed the deal with this week and announced as well.
Operator: Our next question will come from Michael Hickey with StoneX.
Michael Hickey: Rich, Natasha, congrats guys on a great quarter, good -- great start to the year. Obviously, a lot more to come. Just on the Australia deal, nice to see some growth from that region. Just curious if you could sort of frame it for us, Natasha, the growth opportunity network-wise in Australia and Japan? And then the follow-up, I'll give you now, just what you see from those regions as well in terms of relative PSAs and local language development in terms of films?
Natasha Fernandes: I think it was a really important deal for us. I mean, for the longest time, we had only about 2 locations this past year in 2025, we ramped up and installed some more locations in time for Avatar and started the year with about 10 locations and now adding this new deal. We're sitting with the potential to double -- more than double our footprint in Australia. Australia is one of the strongest performing regions and countries for us. Some of the locations have TSAs up to $4 million, which is absolutely amazing. And I think that that's the opportunity is the ticket price varies over there as well. And so knowing that you have the opportunity to have outsized performance from a mix of not only growing your network, but you're also getting the leaning into IMAX and the higher ticket prices. I mean it's been one of our priority markets as well. We're only about 13% penetrated. So there's a lot of growth and opportunity there. And as you look at Japan, we signed another 7 systems in Japan this quarter. Last year, we signed 13. And off of the success of Demon Slayer in local language in Japan, we're continuing to do that. I did announce in the prepared remarks, and it was heavily shown at CinemaCon as well, Godzilla Minus Zero, as our first local language film for IMAX title in Japan, which they're leaning in very heavy into IMAX with that as well. And Japan is only 47% penetrated. So a lot of opportunity there. And those per screen averages remain just as strong as they've ever been, which is very good because I think as we start to expand in Japan and continue to grow that network, you contemplate whether or not the per screen averages will move, but they've actually shown considerable strength there.
Operator: And the next question is going to come from Eric Handler with ROTH Capital.
Eric Handler: Natasha, starting at your Investor Day last year, you did mention how IMAX was selectively looking at opportunities to maybe put some more capital into their deals above and beyond just sort of like the cost of the screen installation. This $8 million of higher lease incentives, is that part of that strategy? How do you measure ROI with those investments?
Natasha Fernandes: It is, Eric, actually. it was a significant expenditure for us in the quarter, and I'm sure you saw that it impacted our cash from ops, but I see that as a good thing. Investing the $8 million to help grow the network faster ahead of the fantastic slate that we still have ahead of us coming and as well into '27 and '28, I think that's the opportunity for us. And we do value and really look at what the opportunity for a return on it is. So first of all, always using that capital for new locations and not simply for upgrades. So that would be new box office potential for us, but also in high-performing markets and with partners that we know that we can expand and have a greater penetration as well. And so -- and we know that they'll lean in. And all of those things working together, we've been able to value out what that arrangement will look like. And each arrangement does look different as well. But of course, all within the respect of making sure that we hit our return hurdles, and also just for the opportunity to continue to quickly expand the network, therefore, grow the box office. And as you know, that will continue to not only grow the box office, but then grow the network, and it works in a nice cycle from that perspective.
Eric Handler: And then I wonder, as you look further into markets like Australia, Japan, EMEA, are these more JV type deals? Or are you looking -- are they doing more -- are they more interested in like [ straight ] sales?
Natasha Fernandes: Actually, it's a mix, Eric. It can be -- it's dependent on the partner. It's dependent on the way the negotiation goes as well. But I think part of it is, we also like to have a good mix within our revenues and the way that we build out the network. So sometimes it's been JVs and others, it's been sales. Japan, for instance, hybrids are a really good opportunity there where not only do you cover the cost of the system, but then you get to participate in the box office performance. And that actually is a fantastic model for a lot of markets like Europe as well and Australia and France, in particular, in Europe has been very good for that, too. So I think that's a really good way to be able to capture the box office potential and the incrementality that can flow through our model.
Operator: And our next question is going to come from Chad Beynon with Macquarie Capital.
Chad Beynon: Rich, glad to hear you're progressing well and looking forward to talking to you soon. Natasha, with respect to China, the comment that you gave earlier just in terms of the weighting or I guess, what we saw last year, this year being more balanced. Consumer feels to be improving. Your indexing is strong. Can you roughly talk about the slate for the rest of the year, whether it's local language versus Hollywood? And really just what gives you the confidence that China will come through in '26?
Natasha Fernandes: For China, I think the best of it is that we're managing it on an annual global portfolio, and it gives us the ability to stack our slate for the best results. I mean you can have unexpected outsized performance, look at Ne Zha 2 last year, right, from a local language title or from other titles. I think the biggest thing to remember, Chad, is that as a company, we're not so much focused on the geographies as much as we're focused on the overall slate for our company. And what's great about this year is there's a lot of Hollywood titles that have strong potential in China, like the Odyssey and Dune, but also the local language slate is stacking up as well, and we do expect there to be several titles released into the summer. And the May holiday is coming upon us this weekend as well, and there's a couple of titles there, including World War, which is supposed to do -- which is tracking very well in China as well as obviously, The Devil Wears Prada and some Hollywood titles going there. So I think what's been good about China is that we're going to be able to create a good mix between both Hollywood and local language and in order to capture the wins this year. And then there's other IP that will perform well there as well, like Post Toy Story. And then, of course, we're going to look towards the rest of the world and other areas. What's really good, Chad, is that the rest of world regions, if you think about the fact that we've grown over 8% in the rest of world outside of China and domestically, we've grown over 4%, that's where you can also start to see that you capture box office from many regions, not simply focusing on China, but looking at how do we make sure we have a good mix globally and continue to capture those market shares. And it's enabled us to have a trailing 12-month market share of 3.8%. And with that, we've grown our rest of world market share as well in the quarter. So that's been great.
Chad Beynon: And then maybe takeaways from CinemaCon? It seems pretty positive from investor standpoint. But how are you guys feeling just in terms of the content beyond '26, whether it's the quality or just the number of titles that you took away from CinemaCon or CEO Forum?
Natasha Fernandes: CinemaCon, it was great this year. I mean -- we saw you there. And the -- I think the buzz around CinemaCon was so uplifting this year compared to last year. I think the industry is excited. It's going to be a great year for 2026. I think the best of the slate is definitely ahead of us for IMAX with lots of films for IMAX coming, including the Odyssey in June. But I think the other part is if you look out to the future years, I mean, what's very positive is that we have a strong demand and our slate and content visibility continues to strengthen, and we continue to make moves on that every day to strengthen and solidify that. I mean 2027 is already approaching 10 FFI titles. And there's some really large ones in there, too. In 2028, we actually have 5 announced FFI titles, plus we just confirmed today with Disney Pixar that Incredible 3 will be released as a film for IMAX title, and it will feature IMAX exclusive 143 aspect ratio. So I think what you're seeing is that exhibitors clearly are seeing our growing market share and the growing demand by consumers for IMAX across film genres and content. And there's just so much excitement about not only this year's slate, but also the slate going forward in '27 and '28.
Operator: And our next question is going to come from David Karnovsky with JPMorgan.
David Karnovsky: Natasha, with Disney's Infinity Vision announcement, there hasn't been a lot of details on this, I'm interested in your view. Is it your understanding they're trying to kind of unify PLF formats under a brand or is this just kind of specific to Avengers? And is there any kind of read-through that we should have to kind of your relationship with the studio?
Natasha Fernandes: David, from our view, we feel it's a pure marketing play to try and offset the fact that they don't have an IMAX platform or brand for Avengers Doomsday. It doesn't offer the consumer anything that they couldn't get yesterday. And so Marvel fans, we believe that they're among the savviest, most discerning moviegoers out there. And there's a reason why we're the undisputed leader in premium cinema worldwide. No one can match our relationship with filmmakers, our image capture with our proprietary film and digital cameras, our post-production and exclusive expanded aspect ratio. Essentially, we have the most immersive proprietary architecture in our auditoriums and consistent delivery of that across all of our 1,800 locations as we monitor that in real time and 24/7 for control and quality. And so I think the biggest part about it is the fact that we are a consistent platform and delivery for consumers. And that's sort of how we feel about the announcement with Infinity Vision.
David Karnovsky: And then I just want to ask one on gross margins for content. Obviously, the year-over-year is impacted by the box office, but there have been some quarters where you put up a higher margin on a similar level. So I just wanted to understand if there are any kind of unique puts and takes to think about it for Q1?
Natasha Fernandes: Sure. I think margin will fluctuate normally quarter-by-quarter, and it's similar to box office cadence. When you see the margin percent kind of moving with the box office, and of course, I know what you said about box office and our ability to still deliver on margins in other quarters. And I think part of that is we actually are focused this year on marketing. You've seen that the Dune tickets and the Odyssey tickets have all been moving and particularly in June, we put those out for sale already, which means we've been marketing. And so we are marketing titles well in advance right now for this year. And so in Q1, of course, we took some marketing charges ahead of time, but we think that those returns are in front of us. And as you heard, I did reiterate our guidance for adjusted EBITDA as well.
Operator: And the next question is going to come from Omar Mejias with Wells Fargo.
Omar Mejias Santiago: I want to give Rich my best wishes and in wishing him a speedy recovery. Natasha, maybe first on signings. I think 1Q this year had 23 signings versus last year, 95. Just curious, can you frame this, how much of this is timing related and if this has any impact on install cadence throughout the year?
Natasha Fernandes: Yes. I think we're seeing good pacing and ramping of installations and signings. I mean, year-to-date, actually, our signings are sitting at 42. And what's great is it's across 10 countries. And -- so that's fantastic. And I think there -- it's not indicative versus what we had last year. Last year was one large deal for AMC, and we did note that as well. And so for us, that's timing. I mean we are focused for installations, on getting installs in, and we had 19, which is a great number. It was across 8 countries in the first quarter. One thing that you can't see through our financials is how focused we are on getting installations in high-performing sites, but secondly, on getting installations in for film systems in advance of the Odyssey. And so we do expect to have 41 film system locations in for the Odyssey versus 30 that we had for Oppenheimer. It's about 40% more. And what's key about it is that you're not seeing that counted as installations because we're going into sites that already have a laser or digital system. But once the film is distributed, the productivity of these -- the locations will increase significantly. And so we've added a lot of key locations already for the film systems, and we're highly focused on that. And on the signings front, I mean, we have the 10-system deal with HOYTS, but then also, we've had over 10 signings in China, 7 in Japan, 7 in EMEA, including Spain, France, Germany, Netherlands, Egypt. I think what's great is that more than half of our signings actually represent new IMAX locations. So a meaningful driver for our network economics and includes some that will install this year as well.
Omar Mejias Santiago: That is very helpful. And maybe one more for me. There were some media reports talking about the $50 movie ticket as a ride for certain films in premium theaters. And just want to get your thoughts on how widespread is this? And how much more room for growth from a theaters perspective you think there is in this fund, especially for some of the biggest titles across some of the PLS locations?
Natasha Fernandes: Sure, Omar. I mean we've talked about this before, of course, too. We don't set ticket prices. Of course, we believe there's opportunity in the ticket prices, but it's not something that we do set. I mean we saw the Dune tickets go on sale and then all of a sudden, you saw them go on aftermarket sales as well, right? So I do think there's opportunity, but I think the -- it's a whole experience. And so exhibitors need to think through what's the opportunity for different films, for different days of the week, for different showtimes and a lot goes into that. It also goes into whether they're capable to do that with their systems that they operate as well. And so I think that's kind of the potential that you see before everyone as to how do you continue to grow box office as well.
Operator: And the next question will come from Eric Wold with Texas Capital Securities.
Eric Wold: Two questions. I guess, one, Natasha, as you look at the backlog, I know you've worked on in prior years cleaning up the backlog with agreements that maybe stay in there. Any remaining opportunities in the backlog to kind of work with exhibitors to accelerate installations, move locations around to other zones that may be earlier in kind of the queue or shrink zones going to drive new deals?
Natasha Fernandes: Yes. I think we -- obviously, we have good visibility into our backlog. We're at about 430 systems. We do come through that backlog. We actually did an exercise a couple of years ago, which I know we've talked about that we kind of walked through our backlog and made sure everything is -- that we're able to roll it out, and we've updated our plans, and we continue to do that. And so we feel good about our backlog. There is always opportunity. There are -- some of our exhibitors are global exhibitors. So they operate in different countries. And so there are opportunities when they sign deals that sometimes we'll shift it from one country to another, and we've done that very recently as well. And so I think that we're -- our team is very active and skilled in that. They are in constant communication with the exhibitors and are tracking a list. It's all list managed as well, and they have a lot of experience in that area.
Eric Wold: Got it. And then just last question, I'm not sure we discussed this in the past, I apologize if I missed it. But looking at the historical model that you put on the website, it looks like 30 or so systems in China were reclassified from hybrid JVs to STLs. Anything that -- I guess, what was the rationale behind that? Is that -- will that have any impact on your revenue share going forward from those agreements?
Natasha Fernandes: I think you saw that right in the documents. And from time to time, we always go through an assessment of locations and they might come up for upgrade or renewal and we decide whether or not we're -- both parties together decide whether or not we are ready for an upgrade or renewal or whether we want to wait a little longer for that. And at some point in time, we'll transfer the title. And so it will shift from a JV over to a sales type, but nothing that kind of changes the box office dynamic for us on that. And so I think from that perspective, nothing material that we would need to note from it.
Operator: And the next question is going to come from Steven Frankel with Rosenblatt Securities.
Steven Frankel: Natasha, India has been a market that's had a lot of potential, and you had some good progress with some local language content. But historically, there have been, let's call them, backlog conversion problems. It's taken longer than you thought to get some of these theaters open. Where are we in that process today?
Natasha Fernandes: Yes. I think we still have a lot of opportunity. I think we're only about 28% to 30% penetrated in India. So a lot of growth to be had. And you're not wrong, it does take long to install and get permits and complete an installation. But what you haven't maybe seen is that we have grown that network over the past few years. And we have been signing with different partners in India as well. And so that's been a good opportunity for us. One thing that, as you mentioned, is the local language. For us to be doing the Ramayana Part 1, there will be -- that's -- this year, there will be a Part 2 and then Varanasi, all film for IMAX titles in India. That's a really big deal because over 90% of their box office is local language. And so the big opportunity for us is to continue to show how well local language can perform in IMAX in India, and therefore, it will stir up that conversation for future growth there as well.
Steven Frankel: And then one quick follow-up on that. What are the ticket prices like on a film for IMAX title in India relative to traditional Indian ticket prices?
Natasha Fernandes: On that one, Steve, I may have to get back to you because we've never done a film for IMAX title yet in India. So we're going to see what they go for later on this year, but we will keep you updated on it.
Operator: And our last question will be coming from David Joyce with Seaport Research Partners.
David Joyce: A little bit more on the local language side. How do you expect the next couple of quarters to comp year-over-year with China box office and total local language box office versus the prior year? And overall, for this year, do you expect local language to be able to grow versus 2025? Or are the couple of really big titles last year a little bit too much of that hurdle?
Natasha Fernandes: David, I think the -- our local language underpinnings are strong. I mean the rest of world, our local language has continued to increase over the last few years. Of course, last year was very strong with the Ne Zha 2 effect. But if you actually take out China, you can see that our local language is growing. And even this year, we expect it to continue to grow. And there's a lot of diverse content. Within the past year, we've done 9 new countries, like -- local language coming from 9 new countries. Actually, this quarter, we had our first Taiwanese title as well. And so I think that there's a lot of opportunity. But I think what's even more important is that with the Hollywood slate, it is making sure you have the right mix to make sure that we penetrate into the right markets with the right type of film. And so if Hollywood is going to do better for a particular period, we will lean in, in that. And if it's not, then we'll lean in on the local language. And that's what's great about all of the different pieces of content that we have and all of our content partners worldwide. With having over 60 content partners worldwide, we have the ability to lean into alternative content. We've been doing music films as well. We did Epic this past quarter for Elvis, and we've done some other pieces of content. We have the F1 races coming this weekend and other opportunities of other local language that we've been doing. We've been doing a Japanese anime rollout as well and in South Korea been doing some content. So I think our whole goal is to make sure we're doing a whole portfolio between our Hollywood local language and alternative content to make sure we're maximizing box office and leaning in. And even on that, like this past week, we did a fan-first event and brought back Steve Racer for our fans and -- on a night or a couple of nights that we wouldn't have really had much box office brought in over $1 million. And so I think our whole goal is to look at utilization and maximizing box office, and we're highly focused on that.
David Joyce: Great. And if I could just tack on a short one. On the CapEx side, you invested $4 million in JV equipment this quarter. I think that was on maybe 11 installs. Is that a decent kind of ratio for future JVs? Or how else would you think that investment might trend this year?
Natasha Fernandes: A little bit of timing plays in there, too, David. Like sometimes we're investing this quarter, and it will come through on a cash outflow, but we might have installed the system already in April, for instance, right? And so I think you just look at the average prices that we've kind of worked through before. And I think that's the better -- best way to do it. But you're right, like looking at it from the installs is the first starting point and then kind of adding in a little bit for knowing that upcoming installations will happen too. But our whole goal this year, I mean, we've talked about even our CapEx for the year is somewhere between $30 million to $35 million and could be up by $10 million to $15 million just based on us investing in helping our exhibitors roll out faster as well. And we do have a very strong balance sheet to be able to achieve that. And in doing that, we'll be able to capture more box office as well.
Operator: Thank you. And I would like now to turn the call back over to Natasha for closing remarks.
Natasha Fernandes: Thank you again for joining us today. As you heard, we are hitting our stride at the right time and very bullish as we head into the summer blockbuster season. We've had strong year-over-year growth, and we've already seen that in April with over $105 million achieved in April and over 15% growth year-on-year. The fact that we've seen a slew of recent hits outperform at the box office and that we're continuing to drive strong market share with a variety of audiences and genres. These are all great signs as we unveil one of our strongest slates in history and build on that to grow our network worldwide. We look forward to keeping you updated, and we'll talk to you soon. Thank you.
Operator: This concludes today's conference call. Thank you for your participation.