IMAX CORP 10-K

Item 1. Business 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. As of December 31, 2024, the Company indirectly owned 71.40% of IMAX China Holding, Inc. (“IMAX China”), whose shares trade on the Hong Kong Stock Exchange. IMAX China is a consolidated subsidiary of the Company. GENERAL 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 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 December 31, 2024, there were 1,807 IMAX Systems operating in 90 countries and territories, including 1,735 commercial multiplexes, 11 commercial destinations, and 61 institutional locations in the Company’s global network. This compares to 1,772 IMAX Systems operating in 90 countries and territories as of December 31, 2023, including 1,693 commercial multiplexes, 12 commercial destinations, and 67 institutional locations in the Company’s global network. Additional information on the composition of the IMAX network is provided in the discussion under the caption “Marketing and Customers.” 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. 4 Table of Contents 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’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 achieved its second highest year for domestic (United States and Canada combined) box office in 2024. The year was highlighted by blockbusters including Dune: Part Two , Deadpool & Wolverine , Godzilla x Kong: The New Empire and Alien: Romulus. Additionally, local language films exhibited across the Company’s global network represented 15% of its total box office, including the Chinese films Pegasus 2 and Yolo, the Japanese film Haikyu!!, and the Korean concert film, IM Hero: The Stadium . A cornerstone of the IMAX brand for almost 60 years, IMAX relaunched its IMAX Documentaries strategy to focus on a new generation of narrative-driven original and acquired documentary films, as well as downstream revenue opportunities through partnerships with leading streaming platforms. In 2024, Amazon Content LLC (“Amazon Content”) acquired the worldwide rights to the Company’s original documentary, The Blue Angels . Additional forthcoming IMAX Documentaries include The Elephant Odyssey , Stormbound, Patrouille de France, and The Last Wolves of Yellowstone. The Company has also continued to evolve its platform to bring new, innovative events and experiences to audiences worldwide. During the year ended December 31, 2024, the Company partnered with Pathé Live for the exclusive release of Queen Rock Montreal , which became one of its highest grossing concert films ever. In addition, the Company entered into a partnership with A24 for a monthly one-night-only IMAX release of classic A24 titles, hosted multiple IMAX Live events, including screening the National Basketball Association (“NBA”) finals across select IMAX locations in the Asia Pacific region. Additionally, in partnership with the NBC television network, the Company extended its live coverage of the 2024 Paris Olympics Opening Ceremony and the White Out Game Live in IMAX : Washington vs. Penn State to select IMAX locations throughout the United States. In addition, IMAX programmed its first ever esports event by live streaming the League of Legends world championship, in partnership with CJ CGV Co. Ltd., and Wanda Film (“Wanda”), to over 150 locations across China and South Korea, with an average capacity of over 90%. As of December 31, 2024, the Company had a footprint of 265 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. For more information on the Company’s content, see the section titled “FILM DISTRIBUTION, PRODUCTION AND POST-PRODUCTION” below. 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’s Streaming and Consumer Technology business unit, formed in 2023, focuses on in-home entertainment technology. Included in the product offerings are AI-driven video quality solutions for media and entertainment companies, to deliver the highest quality images on any screen, while also enabling cost efficiencies for streaming companies, broadcasters and other companies that transmit visual data — to create opportunities for new, recurring revenue and grow its global leadership in entertainment technology. The business unit includes the streaming technology acquired in the SSIMWAVE Inc. (“SSIMWAVE”) acquisition (completed in 2022) as well as IMAX Enhanced ® products. 5 Table of Contents The Company utilizes AI for image enhancement, streaming technology, and data analysis to improve various aspects of its business. It is actively exploring other global use cases for AI to improve its products, operations, and efficiency. IMAX NETWORK The IMAX network is the most extensive premium network in the world with 1,807 IMAX Systems operating in 90 countries and territories, including 1,735 commercial multiplexes, 11 commercial destinations and 61 institutional locations as of December 31, 2024. The Company currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which there are 1,735 IMAX Systems operating as of December 31, 2024, representing a market penetration of only 48%. IMAX grew its network by over 2.0% in 2024 driven by 77 new system installations and ended the year with a backlog (as defined and discussed under the caption “IMAX SYSTEMS” below) of 440 IMAX Systems. The Company believes that the majority of its future network growth will come from international markets (defined as all countries other than the United States and Canada). As of December 31, 2024, 76% of IMAX Systems in the global commercial multiplex network were located within international markets. Revenues and gross box office (“GBO”) derived from international markets continue to exceed revenues and GBO from the United States and Canada combined. As of December 31, 2024, the Company had 809 IMAX Systems operating in Greater China with an additional 237 systems in backlog. The Company’s backlog in Greater China as of December 31, 2024, represents 54% of its total backlog, including system upgrades. The Company has a partnership in China with Wanda and as of December 31, 2024, through the Company’s partnership with Wanda, there were 384 IMAX Systems operational in Greater China, of which 334 are under the parties’ joint revenue sharing arrangements (“JRSA”). A main factor in the Company’s global box office being lower in 2024 versus 2023 was the weaker-than-expected performance of films in China, particularly with regard to local language blockbuster titles. Less than two months into 2025, however, the movie industry has seen a very significant turnaround in China. Led by the Mandarin-language blockbuster Ne Zha 2 , IMAX screens in China have broken all previous box office records for the Chinese New Year period, and have already surpassed the Company’s best-ever Q1 box office in China (from 2019). In fact, in less than 3 weeks in February 2025, IMAX screens in China generated more local language box office than IMAX China did in the entire year of 2024. (Refer to “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,” “– The Company faces risks in connection with its significant presence in China and the continued expansion of its business there,” “– 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,” and “– The Company may not convert all of its backlog into revenue and cash flows” in Part I, Item 1A.) PRINCIPAL PRODUCTS AND SERVICES The Company is an innovator in entertainment technology, combining proprietary software, auditorium architecture, and specialty projection and sound system equipment to deliver what it believes is the most immersive in-theater experience in the world while also distributing a significant and growing portfolio of films and other content across its global network. The Company’s principal products and services are as follows: • IMAX Film Remastering – The digital remastering of films and other content into IMAX formats for distribution to the IMAX network. • Film Distribution and Post-Production – The distribution of large-format documentary films, primarily to institutional theaters, and, increasingly, the distribution of exclusive IMAX events and experiences including music, gaming, and sports, as well as the provision of film post-production services. • IMAX Systems – The sale or lease of premium IMAX Systems to exhibitor customers. • IMAX Maintenance – The provision of preventative and emergency maintenance services and quality monitoring to the IMAX network. • Other – Principally includes the Company’s streaming and consumer technology business, including its streaming technology and IMAX Enhanced product services, as well as other ancillary activities. 6 Table of Contents The Company assesses and evaluates its performance based on the operating results of the Content Solutions and Technology Products and Services segments, which largely reflect the different customer bases the Company serves. The Content Solutions segment principally focuses on content enhancement and distribution services for the Company’s movie studio customers and content creators. The Technology Products and Services segment primarily consists of products and services for the Company’s exhibitor customers, including the sale, lease and ongoing maintenance of IMAX Systems. The Company’s segment information is provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 20 to “Consolidated Financial Statements” in Part II, Item 8. IMAX FILM REMASTERING IMAX Film Remastering is a proprietary technology that digitally remasters films into IMAX formats. IMAX Film Remastering digitally enhances the image resolution of films for projection on IMAX screens while maintaining or enhancing the visual clarity and sound quality to levels for which The IMAX Experience is known. In addition, the original soundtrack of a film to be exhibited across the IMAX network is remastered for IMAX digital sound systems. IMAX remastered soundtracks are uncompressed and full fidelity. IMAX sound systems use proprietary loudspeaker systems and proprietary surround sound configurations that ensure every seat in an auditorium is an optimal listening position. The IMAX Film Remastering process can involve: • scanning, at the highest possible resolution, each individual frame of the film and converting it into a digital image; • optimizing the image using proprietary image enhancement tools; • enhancing the digital image using techniques such as sharpening, color correction, grain and noise removal and the elimination of unsteadiness and removal of unwanted artifacts; • recording the enhanced digital image into an IMAX digital cinema package format or onto IMAX 15/70-format film; and • specially remastering the soundtrack to take full advantage of the unique sound system of IMAX Systems. 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 have sought IMAX-specific enhancements in recent years to generate interest in and excitement for their films. 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 screen. In select IMAX locations worldwide, movies filmed with IMAX cameras have an IMAX-exclusive 1.43 film aspect ratio, with up to 67% more image. The Company has a Filmed For IMAX ® program under which filmmakers craft films from their inception in various ways in order to optimize The IMAX Experience . The program includes incremental and bespoke marketing support, which box office metrics have demonstrated audiences respond favorably to, and has driven higher market share for IMAX. Management believes that growth in international box office remains an important driver of growth for the Company. To support continued growth in international markets, the Company is focused on the expansion of the IMAX network and has sought to bolster its international film strategy, supplementing its slate of Hollywood films with appealing local language films released in select markets, including China, Japan, India, France and South Korea. More recently, the Company has further expanded its strategy by distributing local language content beyond native markets. 7 Table of Contents The following table provides the number of new films and other content released to the Company’s global network during the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Hollywood film releases 40 36 Local language film releases: China 25 28 Japan 14 11 India 11 8 South Korea 6 9 Thailand 2 1 Malaysia 1 1 Indonesia 1 — France 1 1 Total local language film releases 61 59 Other content experiences 17 3 Total film releases (1) 118 98 (1) For the year ended December 31, 2024, the films released to the Company’s global network included ten with IMAX DNA (2023 — eight). To date, in 2025, 21 titles have been released to the global IMAX network, including three titles with IMAX DNA, and the Company has announced the following additional 31 titles to be released in 2025: 8 Table of Contents Title Studio Scheduled Release Date (1) IMAX DNA Moonlight A24 February 2025 — Mickey 17 Warner Bros. Pictures March 2025 — Spring Breakers A24 March 2025 — Snow White Walt Disney Studios March 2025 — Alto Knights Warner Bros. Pictures March 2025 — A Minecraft Movie Warner Bros. Pictures April 2025 — The Amateur Walt Disney Studios April 2025 — One to One: John & Yoko Magnolia Films April 2025 — Sinners Warner Bros. Pictures April 2025 Filmed for IMAX Ambulance (2) Muvi Studios April 2025 — Thunderbolts Marvel Studios May 2025 Filmed for IMAX Final Destination: Bloodlines Warner Bros. Pictures May 2025 Filmed for IMAX Mission Impossible - The Final Reckoning Paramount Pictures May 2025 Filmed for IMAX How to Train Your Dragon Universal Pictures June 2025 Filmed for IMAX F1 Warner Bros. Pictures June 2025 Filmed for IMAX Jurassic World: Rebirth Universal Pictures July 2025 — Superman Warner Bros. Pictures July 2025 Filmed for IMAX The Fantastic Four: First Steps Marvel Studios July 2025 Filmed for IMAX Untitled Paul Thomas Anderson Title Warner Bros. Pictures August 2025 — The Conjuring: Last Rites Warner Bros. Pictures September 2025 — Untitled Crunchyroll/Sony Title (2) Sony Pictures September 2025 — Him Universal Pictures September 2025 — The Bride! Warner Bros. Pictures September 2025 Filmed for IMAX Michael Lionsgate/Universal Pictures October 2025 — Tron: Ares Walt Disney Studios October 2025 Filmed for IMAX Mortal Kombat 2 Warner Bros. Pictures October 2025 Filmed for IMAX Predator: Badlands Walt Disney Studios November 2025 — The Running Man Paramount Pictures November 2025 — Wicked: For Good Universal Pictures November 2025 — Zootopia 2 Walt Disney Studios November 2025 — Avatar: Fire and Ash Walt Disney Studios December 2025 — (1) The scheduled release dates in the table above are subject to change, may vary by territory, and may not reflect the date(s) of limited premiere events. (2) Denotes local language release. 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, and has announced that 2025 will feature at least 12 Filmed for IMAX titles. The Company’s Hollywood film slate beyond 2025 has started to fill in including major films such as: Avengers: Doomsday , The Mandalorian and Grogu , Toy Story 5 , The Odyssey , Narnia , Moana , Supergirl Woman of Tomorrow , Avengers: Secret Wars , The Batman 2 , Frozen 3, and Dynamic Duo. FILM DISTRIBUTION, PRODUCTION AND POST-PRODUCTION The Company continues to believe that the IMAX network is a valuable global platform to launch and distribute original content, including documentaries. The Company distributes large-format documentary films, primarily to institutional customers. The Company receives as its distribution fee either a fixed amount or a fixed percentage of the box office receipts and, following the recoupment of its costs, is typically entitled to receive an additional percentage of gross revenues as participation revenues. 9 Table of Contents The ownership rights to such content may be held by the film sponsors, the film investors and/or the Company. As of December 31, 2024, the Company had distribution rights with respect to approximately 62 films, which cover subjects such as space, wildlife, music, sports, history and natural wonders. In May 2024, Amazon Content completed its acquisition of the worldwide rights to the Company’s original documentary, The Blue Angels , filmed with IMAX certified digital cameras and produced in collaboration with Dolphin Entertainment, Bad Robot Productions, and Zipper Bros Films. The feature-length documentary was released to select commercial locations across the IMAX network and, in January 2025, a 40-minute 3D version was released to IMAX institutional locations. Additionally, in 2024, the Company had limited commercial network releases of the documentaries Skywalkers: A Love Story The IMAX Experience and Fly: The IMAX Experience , in partnership with XYZ Films and National Geographic, respectively. Upcoming documentaries, which are currently in production, include Stormbound , a feature documentary produced by Academy Award ® -winning producer, Adam McKay, The Lost Wolves of Yellowstone , and Patrouille de France, all of which are expected to be released in 2025, and The Elephant Odyssey , a documentary in collaboration with Beach House Pictures Pte Ltd and China International Communications Group, which is expected to be released in 2026. In addition, the Company continues to evolve its platform to bring new, innovative IMAX events and experiences to audiences worldwide. As of December 31, 2024, the Company had a footprint of 265 connected locations in the IMAX network across the United States, Canada, Europe, Africa, Australia, and Asia configured with connectivity to deliver live and interactive events with low latency and superior sight and sound. Furthermore, the Company used its live streaming technologies to deliver events to an additional 166 locations around the world in 2024. In 2024, the Company partnered with Pathé Live, Mercury Studios, and Queen Films for the exclusive release of Queen Rock Montreal , which became one of the Company’s highest grossing concert films. In addition, the Company entered into a partnership with A24 for a monthly one-night-only IMAX release of classic A24 titles, including Midsommar , Hereditary , and Alex Garland’s highly-acclaimed film Stop Making Sense . In 2024, the Company hosted numerous IMAX Live screening events including: • Andre 3000: New Blue Sun; • the NBA finals across select IMAX locations in the Asia Pacific region; • The Beach Boys: IMAX Live Experience ; • a special advance screening and live event for Megalopolis: The Ultimate IMAX Experience ; • a live pre-show Q&A with the cast of Twisters ; • live coverage of the 2024 Paris Olympics Opening Ceremony in partnership with the NBC television network; and • the White Out Game Live in IMAX: Washington vs. Penn State for select IMAX locations throughout the United States. In addition, IMAX programmed its first ever esports event by live streaming the League of Legends world championship, in partnership with CJ CGV Co. Ltd. and Wanda, to over 150 locations across China and South Korea, capturing an average attendance capacity of over 90%. 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 also provides IMAX film and digital cameras to content creators under the IMAX certified camera program. IMAX SYSTEMS The Company’s primary products are its various digital projection systems, which are either sold or leased to exhibitor customers along with a license for the use of the globally recognized IMAX brand. The Company’s digital projection systems include a projector that offers superior image quality and stability and a digital theater control system; a digital audio system delivering up to 12,000 watts of sound; a screen with a proprietary coating technology, and, in certain situations, 3D glasses and cleaning equipment. IMAX’s digital projection systems also operate without the need for analog film prints. The Company’s digital projection systems provide a premium and differentiated experience to audiences that is consistent with what they have come to expect from the IMAX brand, while providing exhibitor customers with the compelling economics and flexibility that digital technology affords. 10 Table of Contents As part of the arrangement to sell or lease an IMAX System, the Company provides extensive advice on auditorium planning and design, as well as supervision of installation services. The terms of each sale or lease arrangement vary according to the configuration of the IMAX System, as well as the cinema and film distribution markets relevant to the geographic location of the customer. Revenue from the sale or lease of an IMAX System may be recognized at a different time from when cash is collected from the exhibitor customer. Further discussion of the Company’s revenue recognition policies is provided in “Critical Accounting Estimates” in Part II, Item 7 and “Summary of Significant Accounting Policies — Revenue Recognition ” in Note 2 to “Consolidated Financial Statements” in Part II, Item 8. The following table presents the number of IMAX Systems that were in the network and in backlog, by configuration, as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 System Network Base New Backlog Upgrade Backlog System Network Base New Backlog Upgrade Backlog IMAX Laser Systems 607 250 85 466 238 68 IMAX Xenon Systems 1,178 105 — 1,276 144 — IMAX Film Systems (1) 44 — — 50 — — (1) In certain IMAX commercial locations, IMAX Film Systems operate alongside an IMAX Laser System or IMAX Xenon System and are interchanged depending on the format of the content being shown. IMAX Laser Systems The Company currently sells or leases two different configurations of its laser systems. The Company believes that IMAX Laser Systems present greater brightness and clarity, higher contrast, a wider color gamut and deeper blacks, consume less power and last longer than other digital projection technologies, and are capable of illuminating the largest screens in the IMAX network. IMAX Xenon Systems In 2008, the Company introduced its digital IMAX Xenon System. Prior to 2008, all of the IMAX Systems offered by the Company were film-based and required analog film prints. The Company believes that IMAX Xenon Systems deliver higher quality imagery when compared with IMAX Film Systems. While the Company continues to support the Xenon network base, it is no longer offering this system for new installations. IMAX Film Systems IMAX Film Systems include various configurations, including 2D and 3D systems, and screen sizes. Following the introduction of the digital IMAX Xenon System in 2008, the number of IMAX Film Systems in the IMAX network has decreased significantly. However, IMAX’s proprietary format, the IMAX 70mm Film System continues to be a sought-after IMAX viewing experience. The existing network of 44 unique locations are being actively supported and leveraged for special event releases throughout the year such as with the 2023 release of Oppenheimer in IMAX 70mm film, which garnered significant consumer interest and demand for this format. The IMAX Film Systems were recently in use for the re-release of Interstellar , and are expected to be available for the release of Sinners in April 2025 and Christopher Nolan’s The Odyssey in July 2026. 11 Table of Contents The following table provides information about the Company’s backlog by deal type as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Number of Systems Dollar Values Number of Systems Dollar Values (In thousands of U.S. Dollars, except number of systems) New Upgrade New Upgrade New Upgrade New Upgrade Sales Arrangements (1) 153 11 $ 151,913 $ 9,340 148 16 $ 158,318 $ 16,068 Hybrid JRSA (2) 94 — 71,723 — 102 1 76,173 910 Traditional JRSA (2)(3) 108 74 425 3,601 132 51 425 1,975 Total 355 85 $ 224,061 $ 12,941 382 68 $ 234,916 $ 18,953 (1) Includes Sales, Hybrid Sales, and Sales-Type Lease deal types. (2) The consideration owed under traditional JRSAs is typically a percentage of contingent box office receipts rather than a fixed upfront fee or fixed annual minimum payments. Accordingly, such arrangements do not usually have a dollar value in backlog; however, hybrid lease arrangements typically provide for contracted upfront payments and therefore carry a backlog value based on those payments. (3) Includes 31 IMAX Systems (2023 ― 30) where certain of the Company’s contracts contain options for the customer to elect to upgrade system type 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. “Backlog” reflects the minimum number of commitments for IMAX Systems according to the signed contracts. The dollar value fluctuates depending on the number of new arrangements signed from year-to-year, which adds to backlog, and the installation and acceptance of IMAX Systems and the settlement of contracts, both of which reduce backlog. The dollar value of backlog typically represents the fixed contracted revenue according to the signed IMAX System sale and lease agreements that the Company expects to recognize as revenue upon installation and acceptance of the associated system, as well as an estimate of variable consideration in sales arrangements. The value of backlog does not include amounts allocated to maintenance and extended warranty revenues or revenue from IMAX Systems in which the Company has an equity interest, operating leases, and long-term conditional theater commitments. The Company believes that the contractual obligations for IMAX System installations that are listed in the 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. Once the determination is made that the customer is unable to proceed with installation, the agreement with the customer may be terminated or amended. If the agreement is terminated and there are no future obligations under the agreement, all or a portion of the initial rents or fees that the customer previously made to the Company are recognized as revenue. (Refer to “Risk Factors ― The Company may not convert all of its backlog into revenue and cash flows.”) Certain of the Company’s contracts contain options for the exhibitor customer to elect to upgrade the system type configuration during the term or to alter the contract structure (for example, from a joint revenue sharing arrangement to a sale) after signing, but before installation. Backlog information as of December 31, 2024, reflects all known elections as of such date. 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. (Refer to “Maintenance and Extended Warranty Services” below.) OTHER PRODUCTS AND SERVICES Streaming and Consumer Technology Streaming and Consumer Technology includes the Company’s Streaming Technology software offerings and IMAX Enhanced products and services. Streaming Technology consists of several software products including: • IMAX StreamSmart ― works within existing video compression workflows to reduce bitrates and retain picture quality across all devices and formats and deliver significant cost savings for both on-demand and live content. 12 Table of Contents • IMAX StreamAware On-Demand ― all-in-one quality assurance and quality control to automate and standardize checks for comprehensive content integrity and regulatory compliance for third-party content libraries, across an entire video compression workflow • IMAX StreamAware On-Air ― real-time monitoring software for live streams, which enables users to monitor video quality across their networks and to identify and address streaming issues. These products are powered by IMAX VisionScience ® , an AI technology that allows streaming platforms and broadcasters to automate workflows. The Company believes that these products allow users to deliver higher quality viewing experiences to their subscribers while reducing costs. IMAX Enhanced is a solution to bring The IMAX Experience into the home. IMAX Enhanced provides end-to-end premium technology across streaming content and entertainment devices, offering consumers high-fidelity playback of image and sound in the home and beyond, including the following features: • IMAX’s expanded aspect ratio, which is available on select titles and streaming platforms; • IMAX’s proprietary remastering technology, which produces more vivid, higher-fidelity 4K HDR images on premium televisions; and • IMAX’s signature sound, which was specially recreated and calibrated for the home to unlock more immersive audio. To be certified as IMAX Enhanced, leading consumer electronics manufacturers spanning 4K/8K televisions, projectors, A/V receivers, loudspeakers, soundbars, smartphones, personal computers, tablets, and more must meet a carefully prescribed set of audiovisual performance standards, set by a certification committee along with some of Hollywood’s leading technical specialists. At present, certified global device partners include Sony Electronics, Hisense, TCL, LG, Phillips, Hewlett Packard, Sound United and Honor, among others. As of December 31, 2024, more than 300 IMAX Enhanced titles had been released across five of the biggest streaming platforms worldwide: Disney+, Sony Bravia CORE, Tencent Video, iQiyi and Rakuten TV. Over 15 million IMAX Enhanced certified devices are estimated to be in use today. IMAX Streaming and Consumer Technology is part of the Company’s next evolutionary step to extend the IMAX brand and technology further into new use cases, including streaming entertainment and the consumer electronics market. (Refer to “Risk Factors ― Failure to respond adequately or in a timely fashion to changes and advancements in technology could negatively affect the Company’s business.”) Other The Company derives a small portion of its revenue from other 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; renting the Company’s proprietary large-format film cameras; and also offering production advice and technical assistance to both documentary and Hollywood filmmakers. MARKETING AND CUSTOMERS The Company markets IMAX Systems through a direct sales force and marketing staff located in offices in Canada, the United States, Greater China, Europe, and Asia. In addition, the Company has agreements with consultants, business brokers and real estate professionals to locate potential customers and system locations for the Company on a commission basis. IMAX currently estimates a worldwide commercial multiplex addressable market of 3,619 locations, of which there were 1,735 commercial IMAX Systems operating as of December 31, 2024, representing a market penetration of only 48%. Commercial multiplex systems are the largest part of the IMAX network, comprising 1,735, or 96%, of the 1,807 IMAX Systems in the IMAX network as of December 31, 2024. The Company’s institutional customers include science and natural history museums, zoos, aquariums, and other educational and cultural centers. The Company also sells or leases IMAX Systems to commercial destinations such as theme parks, private home theaters, tourist destination sites, fairs, and expositions. As of December 31, 2024, approximately 75% of all open and operational IMAX Systems were in locations outside of the United States and Canada. The following table provides detailed information about the IMAX network by system type and geographic location as of December 31, 2024 and 2023: 13 Table of Contents December 31, 2024 December 31, 2023 Commercial Multiplex Commercial Destination Institutional Total Commercial Multiplex Commercial Destination Institutional Total United States 370 4 24 398 363 4 24 391 Canada 44 1 5 50 42 1 7 50 Greater China (1) 796 — 13 809 791 — 16 807 Asia (excluding Greater China) 185 1 2 188 166 2 2 170 Western Europe 135 4 8 147 126 4 8 138 Latin America (2) 62 1 7 70 60 1 8 69 Rest of the World 143 — 2 145 145 — 2 147 Total (3) 1,735 11 61 1,807 1,693 12 67 1,772 (1) Greater China includes China, Hong Kong, Taiwan, and Macau. (2) Latin America includes South America, Central America, and Mexico. (3) Period-to-period changes in the table above are reported net of the effect of permanently closed locations. The Company has a partnership in China with Wanda, which is its largest exhibitor customer. As of December 31, 2024, Wanda represented 21% of the Company’s commercial network (2023 ― 22%) and 12% of the Company’s backlog (2023 ― 4%) as well as 9% of its revenues for the year ended December 31, 2024 (2023 ― 10%). A geographic breakdown of the Company’s revenue is provided in Note 20 to “Consolidated Financial Statements” in Part II, Item 8. INDUSTRY OVERVIEW Competition The out-of-home entertainment industry is very diverse with numerous companies vying for the public’s leisure time, and the Company faces competition as a consequence. Within the theatrical space, exhibitors and entertainment technology companies have introduced their own branded, large-screen 3D auditoriums or other proprietary theater systems, some of which include laser-based projectors, and in many cases, have marketed those auditoriums or theater systems as having similar quality or attributes to an IMAX System. The Company also faces in-home competition from a number of alternative film distribution channels such as subscription streaming services, transactional video-on-demand (both rentals and sales), advertiser-supported video-on-demand, internet, and broadcast and cable television. The Company further competes for the public’s leisure time and disposable income with other forms of entertainment, including gaming, sporting events, concerts, live theater, social media, and restaurants. Furthermore, the Company may continue to face competition in the future from companies in the entertainment industry with new technologies and/or greater capital resources to develop and support them. The Company believes that its competitive strengths include the value of the IMAX brand name, the premium IMAX consumer experience and consumer loyalty, its relationships with prominent Hollywood and international filmmakers and other content creators (a number of whom desire to film their movies and events with IMAX cameras), the tailored distribution and marketing support by dedicated IMAX teams worldwide, and the return on investment of an IMAX System for exhibitors. Furthermore, from a technological perspective, the Company believes that its competitive strengths include the design, quality, and historic reliability rate of IMAX Systems (including the IMAX Laser Systems), the IMAX immersive sound system, the level of the Company’s service and maintenance and extended warranty efforts, the number and quality of IMAX films that it distributes, the availability of Hollywood and international films to the IMAX network through IMAX Film Remastering technology, and the availability of unique and innovative events and experiences such as live streaming of sporting events, esports, distributed concerts, special theatrical screenings, and live Q&A sessions with top content creators. The Company believes that these alternative formats deliver overall experiences that are inferior to The IMAX Experience and do not have IMAX’s brand trust, filmmaker endorsement, loyal fan base, or global footprint and scale. Exhibitor and Studio Consolidation The Company’s primary customers are commercial multiplex exhibitors and studios. The commercial exhibitors and studios industry have undergone significant consolidation, including AMC Entertainment Holdings Inc.’s (“AMC”) acquisition of Carmike 14 Table of Contents Cinemas and Odeon & UCI Cinemas Group (“Odeon”), which includes Nordic Cinema Group (“Nordic”), Cineworld Group plc’s (“Cineworld”) acquisition of Regal Entertainment Group (“Regal”), The Walt Disney Company’s (“Disney”) acquisition of certain studio assets from Twenty First Century Fox (“Fox”), and the expected acquisition of Paramount Global (“Paramount”) by Skydance Media, LLC (“Skydance”). The Company believes that such consolidation in the entertainment industry has helped facilitate the growth of the IMAX network. The Company has historically enjoyed strong relationships with large commercial exhibitor chains, which have greater capital to purchase, lease, or otherwise acquire IMAX Systems, and major Hollywood studios. The Company believes that consolidation can help strengthen existing relationships and add expanded opportunities. For example, as larger commercial chains such as AMC and Cineworld have purchased smaller chains, those smaller chains have in turn become part of the IMAX network. For instance, following AMC’s acquisition of Odeon and Nordic, the Company and AMC entered into an agreement for 25 new IMAX Systems across the Odeon and Nordic network. The Company believes that continued consolidation could facilitate further signings and other strategic benefits going forward. However, exhibitor consolidation has also resulted in individual exhibitor chains constituting a material portion of the Company’s revenue and network. Continued industry consolidation may present risks to the Company. (Refer to “Risk Factors – Consolidation among commercial exhibitors and studios reduces the breadth of the Company’s customer base, and could result in a narrower market for the Company’s products and reduced negotiating leverage. A deterioration in the Company’s relationship with key partners could materially and adversely affect the Company’s business, financial condition or results of operation. In addition, an adverse economic impact on a significant customer’s business operations could have a corresponding material adverse effect on the Company.” in Part I, Item 1A.) THE IMAX BRAND IMAX is a premier global technology platform for entertainment and events. The Company relies on its brand to communicate its leadership and singular goal of creating entertainment experiences that exceed all expectations. Top filmmakers, studios, and other content creators use the IMAX brand to message that a film will connect with audiences in unique and extraordinary ways. The Company has a Filmed for IMAX ® program through which filmmakers partner closely with IMAX to craft films that fully leverage IMAX technology and where every frame, from inception, is intentionally designed for The IMAX Experience . Box office metrics have demonstrated that audiences respond favorably to Filmed for IMAX titles. To capture content in a resolution appropriate for IMAX screens, filmmakers utilize IMAX 65mm film cameras or IMAX-certified digital cameras with leading brands including ARRI, Panavision, RED Digital Cinema and Sony. When this content is paired with IMAX’s proprietary post-production process, the resulting craftsmanship enthralls fans in 1,800+ IMAX locations around the world. The IMAX brand is a promise to deliver what today’s audiences crave, which is a memorable, more emotionally engaging, more thrilling and shareable experience. IMAX commissions ongoing third-party consumer research to measure the strength of its brand in numerous markets. The Company’s latest 2024 studies show that the IMAX brand has achieved near universal consumer awareness, is uniquely recognized as a leading, ultra-premium brand, and offers one of the most differentiated movie-going experiences. The IMAX brand has also shown to signal a special, must-see event. Based on Brand Tracking Research, the IMAX brand ranged from two to 10 times more powerful than other entertainment technology brands across various measures of brand equity and health. The Company believes that its strong brand equity supports consumers’ predisposition to choose IMAX over competing brands and to pay a premium for The IMAX Experience now and into the future. RESEARCH AND DEVELOPMENT The Company believes that it is a premier global technology platform for awe-inspiring entertainment and events with significant proprietary expertise in digital and film-based projection and sound system component design, engineering, and imaging technology, particularly in laser-based technology. A significant portion of the Company’s research and development efforts has been focused on the IMAX Laser Systems, which the Company believes are capable of illuminating the largest screens in the IMAX network and provides greater brightness and clarity, higher contrast, a wider color gamut and deeper blacks, while consuming less power and lasting longer than existing digital technology, to ensure that the Company continues to provide the highest quality, premier cinematic experience available to consumers. The Company has continued research and development aimed at creating more affordable laser-based solutions with various screen sizes for its commercial multiplex customers. The Company intends to continue research and development to further evolve its end-to-end technology. This includes bringing connectivity to the Company’s global network to support live and interactive events worldwide; further improving its proprietary Film 15 Table of Contents Remastering and distribution process for the delivery of content for both theatrical (including local language content) and home entertainment; and further improving the reliability of its projectors, as well as enhancing the Company’s image and sound quality. The Company also continues to invest in new film cameras and other related technologies to bring bespoke capabilities and innovative technology to its differentiated 15/65mm camera fleet. The Company recently completed the first of its all-new fleet of IMAX 65mm film cameras. The Company’s engineering team spent two years developing new film cameras that offer spectacular image quality while incorporating new electronics and software, a more modern design, improved functionality and reduced noise by 30%. Within the Company’s Streaming and Consumer Technology business, there is ongoing research and development in perceptual metrics including novel measurement and optimization techniques. Investments are also being made to expand existing and/or develop new technologies that are expected to foster innovative content creation, enhance video quality, support delivery at scale, and ensure premium presentation of content across consumer electronic devices. Furthermore, the Company intends to invest in activities that will capture opportunities to create/build AI and automation into its operations and processes. As of December 31, 2024 and 2023, 89 and 86 of the Company’s employees were connected with research and development projects, respectively. MANUFACTURING AND SERVICE Projector Component Manufacturing The Company assembles IMAX System projectors at its facility in Mississauga, Ontario, Canada (near Toronto). With a few exceptions, the Company develops and designs all of the key elements of the proprietary technology involved in this component. The fabrication of a majority of parts and sub-assemblies is subcontracted to a group of carefully pre-qualified third-party suppliers. Manufacture and supply contracts are signed for the delivery of the component on an order-by-order basis. The Company believes its significant suppliers will continue to supply quality products in quantities sufficient to satisfy its needs. The Company inspects all parts and sub-assemblies, completes the final assembly, and then subjects the projector to comprehensive testing individually and as a system prior to shipment. Historically, these projectors have had reliability rates based on scheduled shows of approximately 99%. Sound System Component Manufacturing The Company develops, designs, and assembles the key elements of the theater sound system component. The standard IMAX sound system component consists of parts from a variety of sources, with approximately 50% of the materials of each sound system attributable to proprietary parts provided under original equipment manufacturers agreements with outside vendors. These proprietary parts include custom loudspeaker enclosures and horns, specialized amplifiers, and signal processing and control equipment. The Company inspects all parts and sub-assemblies, completes the final assembly, and then subjects the sound system to comprehensive testing as a system. Screen and Other Components The Company purchases its screen components and glasses cleaning equipment from third parties. The standard screen system component consists of a projection screen manufactured to IMAX specifications and a frame to hang the projection screen. The glasses cleaning machine is a stand-alone unit that is connected to the theater’s water and electrical supply to automate the cleaning of 3D glasses. Maintenance and Extended Warranty Services The Company provides ongoing maintenance and extended warranty services to IMAX Systems. These arrangements are usually for a separate fee. The maintenance and extended warranty arrangements include service, maintenance, and replacement parts for IMAX Systems. To support the IMAX network, the Company has personnel stationed in major markets throughout the world who provide periodic and emergency maintenance and extended warranty services on existing IMAX Systems. The Company provides various levels of maintenance and warranty services, which are priced accordingly. Under full-service programs, Company personnel typically visit each IMAX location every six to twelve months to provide preventative maintenance, cleaning and inspection services and emergency visits to resolve problems and issues with the system. Under some arrangements, customers can elect to participate in a service partnership program whereby the Company trains a customer’s technician to carry out certain aspects of maintenance. Under such shared maintenance arrangements, the Company participates in certain of the customer’s maintenance checks each year, provides a specified number of emergency visits, and provides spare parts, as necessary. 16 Table of Contents PATENTS AND TRADEMARKS The Company’s inventions cover various aspects of its proprietary technology and many of these inventions are protected by Letters of Patent or applications filed throughout the world, most significantly in the United States, Canada, China, India, Japan, France, Germany, and the United Kingdom. The subject matter covered by these patents and applications includes auditorium design and geometry, audio and display technology, mechanisms employed in projectors and projection equipment (including 3D projection equipment), stereoscopic (3D) imaging, digital remastering, dynamic range and contrast of projectors, seaming or superimposing images from multiple projectors, and other inventions relating to imaging technology, digital projectors, laser projection, and video quality assessment. Included in the Company’s patent portfolio are patent families acquired from the Eastman Kodak Company covering laser projection technology. In addition, the Company acquired more than 15 patent families in connection with the acquisition of SSIMWAVE in September 2022. The Company has been and will continue to be diligent in the protection of its proprietary interests. As of December 31, 2024, the Company held 94 patents and had 19 patents pending in the United States and has corresponding patents or filed applications in many countries throughout the world. While the Company considers its patents to be important to the overall conduct of its business, it does not consider any particular patent essential to its operations. Certain of the Company’s patents expire between 2025 and 2041. The Company owns or otherwise has rights to trademarks and trade names used in conjunction with the sale of its products, systems, and services. The following trademarks are considered significant in terms of the current and contemplated operations of the Company: IMAX ® , IMAX 3D ® , Experience It In IMAX ® , The IMAX Experience ® , DMR ® , Filmed For IMAX ® , IMAX Live ® , IMAX Enhanced ® , and IMAX StreamSmart TM . These trademarks are widely protected by registration or common law throughout the world. HUMAN CAPITAL The Company recognizes that effective human capital management is essential to its success. The Company’s objectives are centered on cultivating a culture and employee experience that transcends the ordinary. By doing so, the Company aims to achieve higher levels of employee engagement, which positively impacts workforce retention, enhances performance, and drives greater innovation. As of December 31, 2024, the Company employed 700 people, with approximately 475 working outside of the United States. People Strategy To achieve these objectives, the Company’s people strategy focuses on the following areas: • The Company is committed to building a compelling employee brand that attracts top talent. • The Company connects employees with its purpose and values, giving them opportunities to make meaningful contributions. • The Company’s competitive Total Rewards Program recognizes and rewards employee contributions. • The Company maintains a strong emphasis on safety to ensure a secure and supportive work environment. Recruiting Talent The Company believes that a team of committed employees with unique backgrounds and experiences is critical to meeting the demands of its clients, partners, and moviegoers. To achieve this, the Company seeks to facilitate fair and equitable interview and hiring processes and provides training for all hiring managers. The Company’s outreach efforts include utilizing global job boards, engaging with community associations, partnering with universities, actively monitoring personnel developments in its industry and maintaining connections with IMAX alumni. The Company has also adopted and continues to review technologies and solutions to improve the hiring experience and enhance talent management. Engaging Employees The Company believes a strong organizational culture and positive employee experience contribute to higher engagement and performance. In 2024, the Company created a comprehensive plan to foster an environment that enables it to fulfill its mission, reflect 17 Table of Contents its values, and exceed annual goals. In 2024, the Company also updated its performance management process and launched an employee training program to foster high performance, rolled out leadership development programs to build stronger manager and leader capabilities, and facilitated succession planning to build a strong bench of future leaders. The Company’s CEO and NEO succession planning was discussed in detail with its Board of Directors. The Company also created an employee value proposition and updated its vision, mission, and values to align teams and employees with a common purpose. In 2024, the Company deployed a listening strategy with pulse surveys and global virtual focus groups to check in on employee engagement and identify opportunities for improvement. Offering Competitive Total Rewards The Company’s Total Rewards Program is designed to attract, retain, and motivate a highly skilled and diverse workforce. By offering competitive compensation and benefits, the Company strives to create an environment where employees feel engaged, valued, and supported in achieving their personal and professional goals. The Total Rewards Program delivers a well-rounded package that includes base salary, short-term and long-term incentives, and comprehensive benefits, with a strong focus on employee well-being. Key initiatives to strengthen this program include the following: • In 2024, the Company transformed its Canadian benefits program to provide employees with greater flexibility and choice. To support this significant change, the Company launched a comprehensive communication strategy, earning an award at Benefits Canada ’s 2024 Workplace Benefits Awards for its educational campaign during the transition to the new flexible benefits plan. • To better understand and address employee needs, the Company hosted global virtual focus groups, leveraging advanced crowdsourcing technology to gather rich data-driven insights. These sessions provided employees with a platform to share their experiences and expectations, shaping future initiatives and fostering a more inclusive workplace culture. • A robust well-being strategy was created in direct response to employee feedback, prioritizing mental health as an integral aspect of overall wellness. This strategy emphasizes emotional, physical, financial, and social well-being. • The Company conducted a thorough review of incentive compensation practices across organizational levels. This analysis will inform the development of future strategies to ensure incentive plans align with long-term goals, drive high performance, and equitably reward employees for their contributions. Employee Safety The Company acknowledges that risks to employee safety are present in various aspects of the Company’s work. The Company has implemented a comprehensive workplace safety management system that provides a framework for assessing risks and implementing controls. The Company’s internal responsibility system includes safety committees of employee representatives at all workplaces. Every employee is responsible for participating in safety planning activities, and managers are accountable for implementing safety programs within their respective functions. AVAILABLE INFORMATION 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. Reports may be obtained free of charge through the SEC’s website at www.sec.gov and through the Company’s Investor Relations website at www.imax.com/investor-relations 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, press releases, public conference calls, and its website. 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 Form 10-K. All references to the Company’s website are intended to be inactive textual references only.