IMAX CORP 10-Q

Item 1. Financial Statements Page The following unaudited Condensed Consolidated Financial Statements are filed as part of this Report: Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 4 Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 5 Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024 6 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 7 Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2025 and 2024 8 Notes to Condensed Consolidated Financial Statements 9 3 Table of Contents IMAX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. Dollars, except share amounts) (Unaudited) June 30, December 31, 2025 2024 Assets Cash and cash equivalents $ 109,251 $ 100,592 Accounts receivable, net of allowance for credit losses 126,949 107,669 Financing receivables, net of allowance for credit losses 121,122 119,885 Variable consideration receivables, net of allowance for credit losses 83,276 82,593 Inventories 36,699 32,840 Prepaid expenses 13,171 13,121 Film assets, net of accumulated amortization 10,309 8,686 Property, plant and equipment, net of accumulated depreciation 243,672 240,133 Other assets 23,356 22,441 Deferred income tax assets, net of valuation allowance 13,630 14,499 Goodwill 52,815 52,815 Other intangible assets, net of accumulated amortization 34,332 35,124 Total assets $ 868,582 $ 830,398 Liabilities Accounts payable $ 31,721 $ 19,803 Accrued and other liabilities 85,322 100,916 Deferred revenue 55,924 52,686 Revolving credit facility borrowings, net of unamortized debt issuance costs 47,547 36,356 Convertible notes and other borrowings, net of unamortized discounts and debt issuance costs 230,474 229,901 Deferred income tax liabilities 12,521 12,521 Total liabilities 463,509 452,183 Commitments, contingencies and guarantees (see Note 7) Non-controlling interests 691 680 Shareholders’ equity Capital stock common shares — no par value. Authorized — unlimited number. 53,782,520 issued and outstanding (December 31, 2024 — 52,946,200 issued and outstanding) 415,142 401,420 Other equity 175,901 185,268 Statutory surplus reserve 4,219 4,051 Accumulated deficit ( 261,261 ) ( 274,675 ) Accumulated other comprehensive loss ( 13,589 ) ( 16,598 ) Total shareholders’ equity attributable to common shareholders 320,412 299,466 Non-controlling interests 83,970 78,069 Total shareholders’ equity 404,382 377,535 Total liabilities and shareholders’ equity $ 868,582 $ 830,398 (See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.) 4 Table of Contents IMAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. Dollars, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Revenues Technology sales $ 18,842 $ 20,420 $ 32,366 $ 28,324 Image enhancement and maintenance services 50,854 52,189 101,607 102,537 Technology rentals 19,116 14,043 38,427 32,644 Finance income 2,872 2,309 5,951 4,579 91,684 88,961 178,351 168,084 Costs and expenses applicable to revenues Technology sales 9,352 9,222 16,575 13,989 Image enhancement and maintenance services 21,376 29,089 40,821 50,284 Technology rentals 7,354 6,723 14,177 12,995 38,082 45,034 71,573 77,268 Gross margin 53,602 43,927 106,778 90,816 Selling, general and administrative expenses 35,302 37,564 68,764 68,821 Research and development 1,542 2,031 2,860 4,218 Amortization of intangible assets 1,809 1,321 3,540 2,664 Credit loss (reversal) expense, net ( 183 ) 139 ( 309 ) 174 Restructuring and other charges 786 — 843 — Income from operations 14,346 2,872 31,080 14,939 Realized and unrealized investment gains 33 32 65 62 Retirement benefits non-service expense ( 133 ) ( 107 ) ( 203 ) ( 214 ) Interest income 1,114 561 1,654 1,095 Interest expense ( 1,927 ) ( 2,282 ) ( 3,728 ) ( 4,227 ) Income before taxes 13,433 1,076 28,868 11,655 Income tax (expense) recovery ( 1,198 ) 3,997 ( 8,483 ) ( 1,162 ) Net income 12,235 5,073 20,385 10,493 Net income attributable to non-controlling interests ( 980 ) ( 1,490 ) ( 6,803 ) ( 3,636 ) Net income attributable to common shareholders $ 11,255 $ 3,583 $ 13,582 $ 6,857 Net income per share attributable to common shareholders: Basic $ 0.21 $ 0.07 $ 0.25 $ 0.13 Diluted $ 0.20 $ 0.07 $ 0.25 $ 0.13 Weighted average shares outstanding (in thousands): Basic 53,751 52,633 53,448 52,568 Diluted 55,161 53,428 55,064 53,386 (See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.) 5 Table of Contents IMAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. Dollars) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Net income $ 12,235 $ 5,073 $ 20,385 $ 10,493 Other comprehensive income (loss) before tax Unrealized net gain (loss) from cash flow hedging instruments 2,520 ( 365 ) 1,805 ( 1,281 ) Realized net loss from cash flow hedging instruments 292 67 1,627 78 Foreign currency translation adjustments 600 ( 454 ) 1,021 ( 996 ) Defined benefit and postretirement benefit plans ( 141 ) ( 149 ) ( 346 ) ( 398 ) Total other comprehensive income (loss) before tax 3,271 ( 901 ) 4,107 ( 2,597 ) Income tax (expense) benefit related to other comprehensive income (loss) ( 699 ) 117 ( 808 ) 420 Other comprehensive income (loss), net of tax 2,572 ( 784 ) 3,299 ( 2,177 ) Comprehensive income 14,807 4,289 23,684 8,316 Comprehensive income attributable to non-controlling interests ( 1,149 ) ( 1,359 ) ( 7,093 ) ( 3,351 ) Comprehensive income attributable to common shareholders $ 13,658 $ 2,930 $ 16,591 $ 4,965 (See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.) 6 Table of Contents IMAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. Dollars) (Unaudited) Six Months Ended June 30, 2025 2024 Operating Activities Net income $ 20,385 $ 10,493 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 30,809 34,002 Amortization of deferred financing costs 984 985 Credit loss (reversal) expense, net ( 309 ) 174 Write-downs, including asset impairments 1,047 2,399 Deferred income tax expense 72 ( 7,722 ) Share-based and other non-cash compensation 12,767 11,753 Unrealized foreign currency exchange (gain) loss ( 278 ) 51 Realized and unrealized investment gain ( 65 ) ( 62 ) Changes in assets and liabilities: Accounts receivable ( 18,702 ) 14,492 Inventories ( 4,027 ) ( 6,271 ) Film assets ( 11,318 ) ( 12,741 ) Deferred revenue 3,116 ( 4,397 ) Changes in other operating assets and liabilities ( 4,300 ) ( 19,086 ) Net cash provided by operating activities 30,181 24,070 Investing Activities Purchase of property, plant and equipment ( 4,006 ) ( 2,690 ) Investment in equipment for joint revenue sharing arrangements ( 14,666 ) ( 9,757 ) Acquisition of other intangible assets ( 3,376 ) ( 3,191 ) Net cash used in investing activities ( 22,048 ) ( 15,638 ) Financing Activities Revolving credit facility borrowings 29,000 51,000 Repayments of revolving credit facility borrowings ( 18,000 ) ( 21,000 ) Repayments of other borrowings ( 372 ) ( 311 ) Repurchase of common shares — ( 18,102 ) Repurchase of common shares - IMAX China ( 1,454 ) — Taxes withheld and paid on employee stock awards vested ( 9,742 ) ( 4,978 ) Common shares issued - stock options exercised 1,048 — Net cash provided by financing activities 480 6,609 Effects of exchange rate changes on cash 46 311 Increase in cash and cash equivalents during period 8,659 15,352 Cash and cash equivalents, beginning of period 100,592 76,200 Cash and cash equivalents, end of period $ 109,251 $ 91,552 (See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.) 7 Table of Contents IMAX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (In thousands of U.S. Dollars) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Adjustments to capital stock: Balance, beginning of period $ 414,041 $ 393,597 $ 401,420 $ 389,048 Restricted share units vested, net of shares withheld for employee tax obligations 970 954 12,350 14,020 Employee stock options exercised, net of shares withheld for employee tax obligations 100 — 1,048 — Grant date fair value of stock options exercised 31 324 — Average carrying value of repurchased and retired common shares — ( 58 ) — ( 8,575 ) Balance, end of period 415,142 394,493 415,142 394,493 Adjustments to other equity: Balance, beginning of period 169,751 171,877 185,268 185,087 Amortization of share-based payment expense - restricted share units 5,818 4,622 9,563 7,546 Amortization of share-based payment expense - performance stock units 2,022 1,992 3,995 3,879 Restricted share units vested ( 1,574 ) ( 1,848 ) ( 22,516 ) ( 19,791 ) Grant date fair value of stock options exercised ( 31 ) ( 324 ) — Change in ownership interest related to IMAX China ( 85 ) ( 11 ) ( 85 ) ( 89 ) Balance, end of period 175,901 176,632 175,901 176,632 Adjustments to statutory surplus reserve: Balance, beginning of period 4,106 3,932 4,051 3,932 Change in statutory surplus reserve, IMAX China 113 168 Balance, end of period 4,219 3,932 4,219 3,932 Adjustments to accumulated deficit: Balance, beginning of period ( 272,403 ) ( 297,284 ) ( 274,675 ) ( 292,845 ) Net income attributable to common shareholders 11,255 3,583 13,582 6,857 Statutory surplus reserve deducted from retained earnings, IMAX China ( 113 ) ( 168 ) — Common shares repurchased and retired — ( 188 ) — ( 7,901 ) Balance, end of period ( 261,261 ) ( 293,889 ) ( 261,261 ) ( 293,889 ) Adjustments to accumulated other comprehensive loss: Balance, beginning of period ( 15,992 ) ( 13,320 ) ( 16,598 ) ( 12,081 ) Other comprehensive income (loss), net of tax 2,403 ( 654 ) 3,009 ( 1,893 ) Balance, end of period ( 13,589 ) ( 13,974 ) ( 13,589 ) ( 13,974 ) Adjustments to non-controlling interests: Balance, beginning of period 84,110 73,928 78,069 71,790 Net income attributable to non-controlling interests 965 1,482 6,792 3,636 Other comprehensive income (loss), net of tax 169 ( 130 ) 290 ( 284 ) Share-based compensation attributable to non-controlling interests 95 ( 65 ) 188 ( 6 ) Change in ownership interest related to IMAX China common share repurchases ( 1,369 ) ( 104 ) ( 1,369 ) ( 25 ) Balance, end of period 83,970 75,111 83,970 75,111 Total Shareholders’ Equity $ 404,382 $ 342,305 $ 404,382 $ 342,305 (See the accompanying notes, which are an integral part of these Condensed Consolidated Financial Statements.) 8 Table of Contents IMAX CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands of U.S. Dollars, unless otherwise stated) 1. Basis of Presentation Accounting Principles IMAX Corporation (together with its subsidiaries, unless the context requires otherwise, the “Company” or “IMAX”), prepares financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures have been condensed or omitted as permitted by such rules and regulations. In the opinion of the Company’s management, the unaudited Condensed Consolidated Financial Statements reflect all necessary adjustments for a fair statement of interim results. The Condensed Consolidated Balance Sheet at December 31, 2024 was derived from the Company’s audited annual Consolidated Financial Statements in the Company’s 2024 Annual Report on Form 10-K (the “2024 Form 10-K”). The interim results presented in the Company’s Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows are not necessarily indicative of results for a full year. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements in the 2024 Form 10-K, which includes significant accounting policies adopted by the Company. Principles of Consolidation These unaudited Condensed Consolidated Financial Statements include the accounts of IMAX Corporation together with its consolidated subsidiaries, except for subsidiaries which have been identified as variable interest entities (“VIEs”) where the Company is not the primary beneficiary. All intercompany accounts and transactions have been eliminated. The Company has evaluated its various variable interests to determine whether they are VIEs as required by U.S. GAAP. The Company has interests in ten film production companies, which have been identified as VIEs. The Company is the primary beneficiary of and consolidates five of these entities as it has the power to direct the activities that most significantly impact the economic performance of the VIE, and it has the obligation to absorb losses or the right to receive benefits from the respective VIE that could potentially be significant. The majority of the assets relating to these production companies are held by the IMAX Original Film Fund (the “Original Film Fund”). The Company does not consolidate the other five film production companies because it does not have the power to direct their activities and it does not have the obligation to absorb the majority of the expected losses or the right to receive expected residual returns. The Company uses the equity method of accounting for these entities, which continues to not be material to the Company’s Condensed Consolidated Financial Statements. A change in the value of an equity method investment that is other than temporary is recognized in the Condensed Consolidated Statements of Operations. As of June 30, 2025 and December 31, 2024, total assets and liabilities of the Company’s consolidated VIEs were as follows: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Total assets $ 1,787 $ 1,459 Total liabilities $ 362 $ 246 Estimates and Assumptions In preparing the Company’s Condensed Consolidated Financial Statements, management makes judgments in applying various accounting policies. The areas of policy judgment are consistent with those reported in Note 2 of the Company’s audited Consolidated Financial Statements included in its 2024 Form 10-K. The significant estimates made by management include, but are not limited to: (i) the allocation of the transaction price in an IMAX System arrangement to distinct performance obligations; (ii) the amount of variable consideration to be earned on sales of IMAX Systems based on projections of future box office performance and inflation; (iii) expected credit losses on accounts receivable, financing receivables, and variable consideration receivables; (iv) provisions for the write-down of excess and obsolete inventory; (v) the fair values of the reporting units used in assessing the recoverability of goodwill; (vi) the cash flow projections used in testing the recoverability of long-lived assets such as the system equipment supporting joint revenue sharing arrangements; (vii) the economic lives of the system equipment supporting joint revenue sharing arrangements; (viii) the useful lives of intangible assets; (ix) the ultimate revenue forecasts used to test the recoverability of film assets; (x) the discount rates used to determine the present value of financing receivables, variable consideration and lease liabilities, as well as to determine 9 Table of Contents the fair values of the Company’s reporting units for the purpose of assessing the recoverability of goodwill; (xi) pension plan assumptions; (xii) estimates related to the fair value and projected vesting of share-based payment awards; (xiii) the valuation of deferred income tax assets; and (xiv) reserves related to uncertain tax positions. 2. New Accounting Standards and Accounting Changes Issued FASB Accounting Standard Codification Updates Not Yet Adopted Improvements to Income Tax Disclosures In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The amendments in ASU 2023-09 improve the transparency of income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation, and (ii) income taxes to be paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning on or after December 31, 2024. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements disclosures related to tax. Disaggregation of Income Statement Expenses In November 2024, the FASB issued Accounting Standard Update No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” (“ASU 2024-03”). The amendments in ASU 2024-03 expand disclosures about specific expense categories presented on the face of the income statement and addresses requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses). ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods thereafter with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on its Consolidated Financial Statements. The Company considers the applicability and impact of all recently issued FASB accounting standard codification updates. ASUs that are not noted above were assessed and determined to be not applicable or not significant to the Company’s Condensed Consolidated Financial Statements for the period ended June 30, 2025. 3. Receivables The ability of the Company to collect its receivables is principally dependent on the viability and solvency of individual theater operators which is significantly influenced by consumer behavior and general economic conditions. Theater operators, or other customers, may experience financial difficulties that could result in them being unable to fulfill their payment obligations to the Company. In order to mitigate the credit risk associated with its receivables, management performs an initial credit evaluation prior to entering into an arrangement with a customer and then regularly monitors the credit quality of each customer through an analysis of collections history and aging. This monitoring process includes meetings on at least a monthly basis to identify credit concerns and potential changes in credit quality classification. A customer may improve their credit quality classification once a substantial payment is made on an overdue balance or when the customer has agreed to a payment plan and payments have commenced in accordance with that plan. Changes in credit quality classification are dependent upon management approval. The Company’s internal credit quality classifications are reported in Note 4 of the Company’s audited Consolidated Financial Statements included in its 2024 Form 10-K. During the period when the accretion of Finance Income is suspended for Financing Receivables, any payments received from a customer are applied against the outstanding balance owed. If payments are sufficient to cover any unreserved receivables, a reversal of the provision is recorded to the extent of the residual cash received. Once the collectability issues are resolved and the customer has returned to being in good standing, the Company will resume recognition of Finance Income. When a customer’s aging exceeds 90 days, the Company’s policy is to perform an enhanced review to assess collectability of the theater’s past due accounts. The over 90 days past due category may be an indicator of potential impairment as up to 90 days outstanding is considered to be a reasonable time to resolve any issues. The Company develops an estimate of expected credit losses by class of receivable and customer type through a calculation that utilizes historical loss rates, which are then adjusted for specific receivables that are judged to have a higher-than-normal risk profile after considering management’s internal credit quality classifications. Additional credit loss provisions are also recorded taking into account macro-economic and industry risk factors. The write-off of any billed receivable balance requires the approval of management. 10 Table of Contents Management’s judgments regarding expected credit losses are based on the facts available to management and involve estimates about the future. As a result, the Company’s judgments and associated estimates of credit losses may ultimately prove, with the benefit of hindsight, to be incorrect. The impacts of inflation, and rising interest rates may impact future credit losses. The Company will continue to monitor economic trends and conditions and portfolio performance and adjust its allowance for credit loss accordingly. Accounts Receivable Accounts receivable principally includes amounts currently due to the Company under IMAX System sale and sales-type lease arrangements, contingent fees owed by theater operators as a result of box office performance, and fees for maintenance services. Accounts receivable also includes amounts due to the Company from movie studios and other content creators principally for digitally remastering films into IMAX formats, as well as for film distribution and post-production services. The following tables summarize the activity in the allowance for credit losses related to Accounts Receivable for the three and six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30, 2025 June 30, 2025 (In thousands of U.S. Dollars) Theater Operators Studios Other Total Theater Operators Studios Other Total Beginning balance $ 11,483 $ 1,236 $ 455 $ 13,174 $ 11,678 $ 1,017 $ 583 $ 13,278 Current period provision (reversal), net 83 115 ( 26 ) 172 ( 33 ) 522 ( 154 ) 335 Write-offs, net of recoveries ( 14 ) ( 74 ) — ( 88 ) ( 14 ) ( 262 ) — ( 276 ) Foreign exchange 16 — — 16 ( 63 ) — — ( 63 ) Ending balance $ 11,568 $ 1,277 $ 429 $ 13,274 $ 11,568 $ 1,277 $ 429 $ 13,274 Three Months Ended Six Months Ended June 30, 2024 June 30, 2024 (In thousands of U.S. Dollars) Theater Operators Studios Other Total Theater Operators Studios Other Total Beginning balance $ 14,247 $ 630 $ 1,079 $ 15,956 $ 14,355 $ 616 $ 1,006 $ 15,977 Current period provision (reversal), net 53 24 1 78 ( 41 ) 38 74 71 Write-offs, net of recoveries ( 178 ) ( 3 ) — ( 181 ) ( 178 ) ( 3 ) — ( 181 ) Foreign exchange ( 27 ) — — ( 27 ) ( 41 ) — — ( 41 ) Ending balance $ 14,095 $ 651 $ 1,080 $ 15,826 $ 14,095 $ 651 $ 1,080 $ 15,826 For the three and six months ended June 30, 2025, the Company’s allowance for current expected credit losses related to Accounts Receivable increased by $ 0.1 million and decreased by less than $ 0.1 million, respectively (2024 — decreased by $ 0.1 million and $ 0.2 million, respectively). 11 Table of Contents Financing Receivables Financing receivables are due from theater operators and consist of the Company’s net investment in sales-type leases and receivables associated with financed sales of IMAX Systems. As of June 30, 2025 and December 31, 2024, financing receivables consisted of the following: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Net investment in leases: Gross minimum payments due under sales-type leases $ 30,203 $ 30,890 Unearned finance income ( 1,108 ) ( 887 ) Present value of minimum payments due under sales-type leases 29,095 30,003 Allowance for credit losses ( 454 ) ( 664 ) Net investment in leases 28,641 29,339 Financed sales receivables: Gross minimum payments due under financed sales 128,917 127,906 Unearned finance income ( 26,617 ) ( 27,199 ) Present value of minimum payments due under financed sales 102,300 100,707 Allowance for credit losses ( 9,819 ) ( 10,161 ) Net financed sales receivables 92,481 90,546 Total financing receivables $ 121,122 $ 119,885 Net financed sales receivables due within one year $ 32,336 $ 30,136 Net financed sales receivables due after one year 60,145 60,410 Total financed sales receivables $ 92,481 $ 90,546 As of June 30, 2025 and December 31, 2024, the weighted-average remaining lease term and weighted-average interest rate associated with the Company’s sales-type lease arrangements and financed sales receivables, as applicable, were as follows: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Weighted-average remaining lease term (in years): Sales-type lease arrangements 8.6 8.5 Weighted-average interest rate Sales-type lease arrangements 7.15 % 7.24 % Financed sales receivables 8.94 % 8.95 % The tables below provide information on the Company’s net investment in leases by credit quality indicator as of June 30, 2025 and December 31, 2024. The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis as per the origination year of the relationship, and include both billed and unbilled amounts. (In thousands of U.S. Dollars) By Origination Year As of June 30, 2025 2025 2024 2023 2022 2021 Prior Total Net investment in leases: Credit quality classification: In good standing $ 543 $ 3,476 $ 3,026 $ 3,076 $ 8,856 $ 8,710 $ 27,687 Credit Watch — — — — — — — Pre-approved transactions 1,007 — — — — — 1,007 Transactions suspended — — — — — 401 401 Total net investment in leases $ 1,550 $ 3,476 $ 3,026 $ 3,076 $ 8,856 $ 9,111 $ 29,095 12 Table of Contents (In thousands of U.S. Dollars) By Origination Year As of December 31, 2024 2024 2023 2022 2021 2020 Prior Total Net investment in leases: Credit quality classification: In good standing $ 3,469 $ 3,190 $ 3,057 $ 6,625 $ 1,963 $ 1,931 $ 20,235 Credit Watch — — — — — — — Pre-approved transactions — — — 2,800 1,477 4,664 8,941 Transactions suspended — — 426 — — 401 827 Total net investment in leases $ 3,469 $ 3,190 $ 3,483 $ 9,425 $ 3,440 $ 6,996 $ 30,003 The tables below provide information on the Company’s financed sales receivables by credit quality indicator as of June 30, 2025 and December 31, 2024. The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis as per the origination year of the relationship, and include both billed and unbilled amounts. (In thousands of U.S. Dollars) By Origination Year As of June 30, 2025 2025 2024 2023 2022 2021 Prior Total Financed sales receivables: Credit quality classification: In good standing $ 5,966 $ 5,834 $ 6,757 $ 5,226 $ 5,245 $ 42,626 $ 71,654 Credit Watch — — — — — 533 533 Pre-approved transactions 619 664 1,054 223 3,700 9,879 16,139 Transactions suspended — — — 298 114 13,562 13,974 Total financed sales receivables $ 6,585 $ 6,498 $ 7,811 $ 5,747 $ 9,059 $ 66,600 $ 102,300 (In thousands of U.S. Dollars) By Origination Year As of December 31, 2024 2024 2023 2022 2021 2020 Prior Total Financed sales receivables: Credit quality classification: In good standing $ 6,217 $ 7,249 $ 5,980 $ 6,152 $ 4,974 $ 41,570 $ 72,142 Credit Watch — — — — — 567 567 Pre-approved transactions 411 779 298 3,468 1,899 8,132 14,987 Transactions suspended — — — 114 143 12,754 13,011 Total financed sales receivables $ 6,628 $ 8,028 $ 6,278 $ 9,734 $ 7,016 $ 63,023 $ 100,707 The following tables provide an aging analysis for the Company’s net investment in leases and financed sales receivables as of June 30, 2025 and December 31, 2024: As of June 30, 2025 (In thousands of U.S. Dollars) Accrued and Current 30-89 Days 90+ Days Billed Unbilled Recorded Receivable Allowance for Credit Losses Net Net investment in leases $ 213 $ 380 $ 2,541 $ 3,134 $ 25,961 $ 29,095 $ ( 454 ) $ 28,641 Financed sales receivables 1,336 2,185 11,277 14,798 87,502 102,300 ( 9,819 ) 92,481 Total $ 1,549 $ 2,565 $ 13,818 $ 17,932 $ 113,463 $ 131,395 $ ( 10,273 ) $ 121,122 As of December 31, 2024 (In thousands of U.S. Dollars) Accrued and Current 30-89 Days 90+ Days Billed Unbilled Recorded Receivable Allowance for Credit Losses Net Net investment in leases $ 222 $ 218 $ 3,185 $ 3,625 $ 26,378 $ 30,003 $ ( 664 ) $ 29,339 Financed sales receivables 895 1,019 12,462 14,376 86,331 100,707 ( 10,161 ) 90,546 Total $ 1,117 $ 1,237 $ 15,647 $ 18,001 $ 112,709 $ 130,710 $ ( 10,825 ) $ 119,885 13 Table of Contents The following tables provide information about the Company’s net investment in leases and financed sales receivables with billed amounts past due for which it continues to accrue finance income as of June 30, 2025 and December 31, 2024. The amounts disclosed for each credit quality classification are determined on a theater-by-theater basis and include both billed and unbilled amounts. As of June 30, 2025 (In thousands of U.S. Dollars) Accrued and Current 30-89 Days 90+ Days Billed Unbilled Allowance for Credit Losses Net Net investment in leases $ 200 $ 355 $ 2,541 $ 3,096 $ 18,702 $ ( 6 ) $ 21,792 Financed sales receivables 1,033 1,662 9,113 11,808 39,253 ( 959 ) 50,102 Total $ 1,233 $ 2,017 $ 11,654 $ 14,904 $ 57,955 $ ( 965 ) $ 71,894 As of December 31, 2024 (In thousands of U.S. Dollars) Accrued and Current 30-89 Days 90+ Days Billed Unbilled Allowance for Credit Losses Net Net investment in leases $ 222 $ 218 $ 3,185 $ 3,625 $ 20,176 $ ( 6 ) $ 23,795 Financed sales receivables 727 610 10,143 11,480 42,208 ( 1,086 ) 52,602 Total $ 949 $ 828 $ 13,328 $ 15,105 $ 62,384 $ ( 1,092 ) $ 76,397 The following table provides information about the Company’s net investment in leases and financed sale receivables that were on nonaccrual status as of June 30, 2025 and December 31, 2024: As of June 30, 2025 As of December 31, 2024 (In thousands of U.S. Dollars) Recorded Receivable Allowance for Credit Losses Net Recorded Receivable Allowance for Credit Losses Net Net investment in leases $ 401 $ ( 401 ) $ — $ 827 $ ( 614 ) $ 213 Net financed sales receivables 30,646 ( 9,242 ) 21,404 28,565 ( 8,317 ) 20,248 Total $ 31,047 $ ( 9,643 ) $ 21,404 $ 29,392 $ ( 8,931 ) $ 20,461 For the three and six months ended June 30, 2025 and 2024, the Company did not recognize Finance Income related to the net investment in leases on non-accrual status. For the three and six months ended June 30, 2025, the Company recognized less than $ 0.1 million, respectively (2024 — less than $ 0.3 million and $ 0.7 million) in Finance Income related to the financed sales receivables in nonaccrual status. The following tables summarize the activity in the allowance for credit losses related to the Company’s net investment in leases and financed sale receivables for the three and six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30, 2025 June 30, 2025 (In thousands of U.S. Dollars) Net Investment in Leases Net Financed Sales Receivables Net Investment in Leases Net Financed Sales Receivables Beginning balance $ 667 $ 9,957 $ 664 $ 10,161 Current period reversal, net ( 213 ) ( 147 ) ( 210 ) ( 346 ) Foreign exchange — 9 — 4 Ending balance $ 454 $ 9,819 $ 454 $ 9,819 Three Months Ended Six Months Ended June 30, 2024 June 30, 2024 (In thousands of U.S. Dollars) Net Investment in Leases Net Financed Sales Receivables Net Investment in Leases Net Financed Sales Receivables Beginning balance $ 451 $ 9,616 $ 453 $ 9,617 Current period (reversal) provision, net ( 1 ) 17 3 13 Foreign exchange — ( 8 ) ( 6 ) ( 5 ) Ending balance $ 450 $ 9,625 $ 450 $ 9,625 14 Table of Contents For the three and six months ended June 30, 2025, the Company’s allowance for current expected credit losses related to its net investment in leases decreased by $ 0.2 million and $ 0.2 million, respectively, and financed sale receivables decreased by $ 0.1 million and $ 0.3 million, respectively. For the three and six months ended June 30, 2024, the Company’s allowance for current expected credit losses related to its net investment in leases decreased by less than $ 0.1 million, respectively, and financed sale receivables increased by less than $ 0.1 million, respectively. Variable Consideration Receivables In sale arrangements, variable consideration may become due to the Company from theater operators if certain annual minimum box office receipt thresholds are exceeded. Such variable consideration is recorded as revenue in the period when the sale is recognized and adjusted in future periods based on actual results and changes in estimates. Variable consideration is only recognized to the extent the Company believes there is not a risk of significant revenue reversal. The following table summarizes the activity in the Allowance for Credit Losses related to Variable Consideration Receivables for the three and six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (In thousands of U.S. Dollars) Theater Operators Theater Operators Theater Operators Theater Operators Beginning balance $ 107 $ 636 $ 116 $ 633 Current period provision, net 13 41 4 44 Foreign exchange — — — — Ending balance $ 120 $ 677 $ 120 $ 677 For the three and six months ended June 30, 2025, the Company’s allowance for current expected credit losses related to Variable Consideration Receivables increased by less than $ 0.1 million, respectively (2024 — increased by less than $ 0.1 million, respectively). 15 Table of Contents 4. Lease Arrangements IMAX Corporation as a Lessor The Company provides IMAX Systems to customers through long-term lease arrangements that for accounting purposes are classified as sales-type leases. Under these arrangements, in exchange for providing the IMAX System, the Company earns fixed upfront and ongoing consideration. Certain arrangements that are legal sales are also classified as sales-type leases as certain clauses within the arrangements limit transfer of title or provide the Company with conditional rights to the system. The customer’s rights under the Company’s sales-type lease arrangements are described in Note 2 of the Company’s audited Consolidated Financial Statements included in its 2024 Form 10-K. Under the Company’s sales-type lease arrangements, the customer has the ability and the right to operate the hardware components or direct others to operate them in a manner determined by the customer. The Company’s lease portfolio terms are typically non-cancellable for 10 to 20 years with renewal provisions from inception. The Company’s sales-type lease arrangements do not contain a guarantee of residual value at the end of the lease term. The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and an extended warranty generally after the first year of the lease until the end of the lease term. The customer is responsible for obtaining insurance coverage for the IMAX System commencing on the date specified in the arrangement’s shipping terms and ending on the date the IMAX System is returned to the Company. The Company also provides IMAX Systems to customers through joint revenue sharing arrangements (“JRSAs”). Under the traditional form of these arrangements, in exchange for providing the IMAX System under a long-term lease, the Company earns rent based on a percentage of contingent box office receipts and, in some cases, concession revenues, rather than a fixed upfront fee or annual minimum payments. Under certain other JRSAs, known as hybrid arrangements, the customer is responsible for making fixed upfront payments prior to the delivery and installation of the IMAX System. Under JRSAs, the customer has the ability and the right to operate the hardware components or direct others to operate them in a manner determined by the customer. The Company’s JRSAs are typically non-cancellable for ten years or longer with renewal provisions. Title to the IMAX System under a joint revenue sharing arrangement generally does not transfer to the customer. The Company’s joint revenue sharing arrangements do not contain a guarantee of residual value at the end of the lease term. The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and an extended warranty throughout the term. The customer is responsible for obtaining insurance coverage for the IMAX System commencing on the date specified in the arrangement’s shipping terms and ending on the date the IMAX System is returned to the Company. The following lease payments are expected to be received by the Company for its sales-type leases and joint revenue sharing arrangements in each of the remainder of 2025, next four years and thereafter following the June 30, 2025 balance sheet date: (In thousands of U.S. Dollars) Sales-Type Leases 2025 (six months remaining) $ 1,619 2026 3,258 2027 3,163 2028 3,017 2029 3,017 Thereafter 16,129 Total $ 30,203 16 Table of Contents 5. Inventories As of June 30, 2025 and December 31, 2024, Inventories consisted of the following: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Raw materials $ 31,181 $ 29,162 Work-in-process 1,871 1,611 Finished goods 3,647 2,067 Total $ 36,699 $ 32,840 As of June 30, 2025, Inventories included finished goods of $ 2.3 million (December 31, 2024 — $ 1.8 million) for which title had passed to the customers, but the criteria for revenue recognition were not met as of the balance sheet date. During the three and six months ended June 30, 2025, the Company recorded write-downs of $ 0.1 million and $ 0.2 million, respectively (2024 — write-downs of $ 0.2 million during each such period) in Costs and Expenses Applicable to Revenues ― Technology Sales. 6. Borrowings Revolving Credit Facility Borrowings, Net As of June 30, 2025 and December 31, 2024, Revolving Credit Facility Borrowings, Net included the following: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Wells Fargo Credit Facility borrowings $ 48,000 $ 37,000 Unamortized debt issuance costs ( 453 ) ( 644 ) Revolving Credit Facility Borrowings, net $ 47,547 $ 36,356 Credit Agreement The Company was a party to a Sixth Amended and Restated Credit Agreement, dated as of March 25, 2022 (the “Credit Agreement”), that provided for a credit facility (the “Credit Facility”) maturing March 25, 2027. The Company’s obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the “Guarantors”), and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors. The Credit Agreement provided for a revolving borrowing capacity of $ 300.0 million, and contained an uncommitted accordion feature that allowed the Company to further increase its borrowing capacity by the greater of $ 140.0 million, for a total of $ 440.0 million, or by the Company’s EBITDA (as defined in the Credit Agreement) (“Adjusted EBITDA per Credit Facility”) for the sum of the four most recently ended fiscal quarters, subject to certain conditions, depending on the mix of revolving loans and/or term loans under the incremental facility and subject to conditions set forth in the Credit Agreement. The Credit Agreement required that the Company maintain a maximum Senior Secured Net Leverage Ratio (as defined in the Credit Agreement) of no greater than 3.25 :1.00, on the last day of each fiscal quarter. The Company was in compliance with this requirement as of June 30, 2025 as the Senior Secured Net Leverage Ratio was 0.00 :1.00. As of June 30, 2025, borrowings under the Credit Facility were $ 48.0 million (December 31, 2024 — $ 37.0 million) and bore interest at Term SOFR, plus a margin of 1.75 % per annum based on the Company’s total leverage ratio. The effective interest rate for the three and six months ended June 30, 2025 were 6.17 %, respectively. As of June 30, 2025 and December 31, 2024, the Company had no letters of credit or advance payment guarantees outstanding under the Credit Facility. As of June 30, 2025, the amount available for future borrowings under the Credit Facility was $ 252.0 million (December 31, 2024 — $ 263.0 million). On July 14, 2025, the Company entered into a Seventh Amended and Restated Credit Agreement (the “New Credit Agreement”) with Wells Fargo Bank, National Association, as agent, and a syndicate of lenders party thereto. The New Credit Agreement increases 17 Table of Contents the Company’s revolving borrowing capacity to $ 375.0 million, and also contains an uncommitted accordion feature allowing the Company to further expand its borrowing capacity to $ 515.0 million or greater, in the form of revolving loans and/or term loans under the incremental facility and subject to conditions set forth in the New Credit Agreement. The facility under the New Credit Agreement (the “New Facility”) matures on July 14, 2030; provided that if certain convertible debt that is permitted to be incurred under the New Credit Agreement, and is so incurred after the date of the New Credit Agreement, has a maturity date that is earlier than 91 days after the maturity date of the New Facility and the aggregate amount of any such convertible debt that remains outstanding on the date that is 91 days prior to the earliest maturity date of any such convertible debt (the “Springing Maturity Date”) exceeds $ 100.0 million, then the maturity date for the New Facility shall automatically be modified to be the Springing Maturity Date. Loans under the New Facility will bear interest, at the Company’s option, at (i) Term SOFR, Eurocurrency Rate or Term CORRA plus a margin ranging from 1.00 % to 1.75 % per annum or (ii) the U.S. base rate or the Canadian prime rate plus a margin ranging from 0.25 % to 1.00 % per annum, in each case depending on the Company’s total leverage ratio. In no event will Term SOFR, Eurocurrency Rate or Term CORRA be less than 0.00% per annum. The New Credit Agreement requires that the Company does not exceed a maximum senior secured net leverage ratio of 3.25 :1.00, which may be increased under certain circumstances and is tested on the last day of each fiscal quarter. In addition, the New Credit Agreement contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit indebtedness, liens, asset sales, investments and restricted payments, in each case, subject to negotiated exceptions and baskets. The New Credit Agreement also contains representations, warranties and event of default provisions customary for a transaction of this type. The Company’s obligations under the New Credit Agreement are guaranteed by certain of the Guarantors, and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors. At closing, the Company incurred $ 52.0 million under the New Credit Agreement to repay the outstanding balance under the Credit Facility. The Company estimates the fees incurred in connection with the New Credit Agreement to be approximately $ 2.2 million, which will be amortized on a straight-line basis over the term of the New Credit Agreement. Foreign Exchange Facility Within the Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements. As of June 30, 2025, the net unrealized gain on the Company’s outstanding foreign currency forward contracts was $ 1.4 million, representing the amount by which the notional value of these forward contracts exceeded their fair value (December 31, 2024 — net unrealized loss of $ 2.0 million). As of June 30, 2025, the notional value of the Company’s outstanding foreign currency forward contracts was $ 51.3 million (December 31, 2024 — $ 48.4 million). Bank of China Facility As of June 30, 2025, and December 31, 2024, there were no borrowings outstanding under the Bank of China Facility (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2024 Form 10-K) and outstanding letters of guarantee were RMB 0.2 million (less than $ 0.1 million). As of June 30, 2025, the amount available for future borrowings under the Bank of China Facility was RMB 190.0 million ($ 26.5 million) and the amount available for letters of guarantee was RMB 9.8 million ($ 1.4 million). The amount available for future borrowings under the Bank of China Facility is not subject to a standby fee. The effective interest rate for the three and six months ended June 30, 2025 was 0 % for each such period (2024 — 0 % for each such period).There were no amounts drawn under the Bank of China Facility for the three and six months ended June 30, 2025. HSBC China Facility In June 2022, IMAX Shanghai entered into an unsecured revolving facility for up to RMB 200.0 million ($ 27.9 million) with HSBC Bank (China) Company Limited, Shanghai Branch to fund ongoing working capital requirements (the “HSBC China Facility”). As of June 30, 2025 and December 31, 2024, no borrowings were outstanding under the HSBC China Facility. As of June 30, 2025, the amount available for future borrowings under the HSBC China Facility was RMB 200.0 million ($ 27.9 million). The effective interest rate for the three and six months ended June 30, 2025 was 0 % for each such period (2024 — 0 %). NBC Facility The NBC Facility (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2024 Form 10-K) has been renewed to September 20, 2025. The Company did not have any letters of credit or advance payment guarantees outstanding as of June 30, 2025 and December 31, 2024 under the NBC Facility. 18 Table of Contents Convertible Notes and Other Borrowings, Net As of June 30, 2025 and December 31, 2024, Convertible Notes and Other Borrowings, Net included the following: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Convertible Notes $ 230,000 $ 230,000 Unamortized discounts and debt issuance costs ( 1,112 ) ( 1,864 ) Convertible Notes, net 228,888 228,136 Federal Economic Development Loan 1,761 2,056 Unaccreted interest benefit ( 175 ) ( 291 ) Federal Economic Development Loan, net 1,586 1,765 Convertible Notes and Other Borrowings, net $ 230,474 $ 229,901 19 Table of Contents Convertible Notes On March 19, 2021, the Company issued $ 230.0 million of 0.500 % Convertible Senior Notes due 2026 (the “Convertible Notes”). The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 0.500 % per annum on the principal of $ 230.0 million, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021. The Convertible Notes will mature on April 1, 2026, unless they are redeemed or repurchased by the Company or converted on an earlier date. The Company continues to record the Convertible Notes entirely as a liability on the Condensed Consolidated Balance Sheets, net of initial purchasers’ discounts and commissions and other debt issuance costs, with interest expense reflecting the cash coupon plus the amortization of the discounts and capitalized costs. Federal Economic Development Loan As of June 30, 2025, the Federal Economic Development Loan (as defined and described in Note 13 to the Company’s audited Consolidated Financial Statements in its 2024 Form 10-K) had a carrying value of $ 1.6 million, net of unaccreted interest benefit and is recorded within Convertible Notes and Other Borrowings, Net on the Company’s Condensed Consolidated Balance Sheets. 7. Commitments, Contingencies and Guarantees Commitments In the ordinary course of its business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements can include terms binding the Company to minimum payments and/or penalties if it terminates the agreement for any reason other than an event of default as described by the agreement. Contingencies and guarantees The Company is involved in lawsuits, claims, and proceedings, including those identified below, which arise in the ordinary course of business. Management is required to assess the likelihood of any adverse judgments or outcomes related to these legal contingencies, as well as potential ranges of probable or reasonably possible losses. The Company records a provision for a liability when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The determination of the amount of any liability recorded or disclosed is reviewed at least quarterly based on a careful analysis of each individual exposure with, in some cases, the assistance of outside legal counsel, taking into account the impact of negotiations, settlements, rulings, and other pertinent information related to the case. The amount of liabilities recorded or disclosed for these contingencies may change in the future due to changes in management’s judgments resulting from new developments or changes in settlement strategy. Any resulting adjustment to the liabilities recorded by the Company could have a material adverse effect on its results of operations, cash flows, and financial position in the period or periods in which such changes in judgment occur. The Company believes it has adequate provisions for any such matters. The Company expenses legal costs relating to its lawsuits, claims, and proceedings as incurred. In January 2004, the Company and IMAX Theatre Services Ltd., a subsidiary of the Company, commenced an arbitration seeking damages before the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) with respect to the breach by Electronic Media Limited (“EML”) of its December 2000 agreement with the Company. In June 2004, the Company commenced a related arbitration before the ICC against EML’s affiliate, E-City Entertainment (I) PVT Limited (“E-City”). On March 27, 2008, the arbitration panel issued a final award in favor of the Company in the amount of $ 11.3 million, as well as an additional $ 2,512 each day in interest from October 1, 2007 until the date the award is paid. In July 2008, E-City commenced a proceeding in Mumbai, India seeking to prevent recognition of the ICC award in India. On March 10, 2017, the Supreme Court of India dismissed E-City’s petition. On March 29, 2017, the Company filed an Execution Application in the Bombay High Court seeking to enforce the ICC award against E-City and several related parties. On October 24, 2024, the Bombay High Court announced the dismissal of the Company’s application, and the Court issued a written order of dismissal on November 14, 2024. On December 13, 2024, the Company filed an appeal of this order, and the Company fully intends to continue pursuing its rights and seeking to enforce the arbitration award. The Company has also taken steps to enforce the ICC final award outside of India. In December 2011, the Ontario Superior Court of Justice issued an order recognizing the final award and requiring E-City to pay the Company $ 30,000 to cover the costs of the application, and in May 2012, the New York Supreme Court recognized the Canadian judgment and entered it as a New York judgment. No amounts have been recognized in connection with this matter. Financial Guarantees Certain subsidiaries of the Company have provided significant financial guarantees to third parties under the Credit Agreement . 20 Table of Contents Product Warranties The Company’s accrual for product warranties, which is recorded within Accrued and Other Liabilities on the Condensed Consolidated Balance Sheets, was $ nil as of June 30, 2025 and $ 0.1 million as of December 31, 2024. Director and Officer Indemnifications The Company’s by-laws contain an indemnification of its directors/officers, former directors/officers, and persons who have acted at its request to be a director/officer of an entity in which the Company is a shareholder or creditor, to indemnify them, to the extent permitted by the Canada Business Corporations Act , against expenses (including legal fees), judgments, fines and any amounts actually and reasonably incurred by them in connection with any action, suit or proceeding in which the directors and/or officers are sued as a result of their service, if they acted honestly and in good faith with a view to the best interests of the Company. In addition, the Company has entered into indemnification agreements with each of its directors in order to effectuate the foregoing. The nature of the indemnification prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. The Company has purchased directors’ and officers’ liability insurance. No amount has been accrued on the Company’s Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, with respect to this indemnity. Other Indemnification Agreements In the normal course of its operations, the Company provides indemnifications to counterparties in transactions such as: IMAX System lease and sale agreements and the supervision of installation or servicing of IMAX Systems; film production, exhibition and distribution agreements; real property lease agreements; and employment agreements. These indemnification agreements require the Company to compensate the counterparties for costs incurred as a result of litigation claims that may be suffered by the counterparty as a consequence of the transaction or the Company’s breach or non-performance under these agreements. While the terms of these indemnification agreements vary based upon the contract, they normally extend for the life of the agreements. A small number of agreements do not provide for any limit on the maximum potential amount of indemnification; however, virtually all of the IMAX System lease and sale agreements limit such maximum potential liability to the purchase price of the system. The fact that the maximum potential amount of indemnification required by the Company is not specified in some cases prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. Historically, the Company has not made any significant payments under such indemnifications and no amounts have been accrued in the Condensed Consolidated Financial Statements with respect to the contingent aspect of these indemnities. 8. Condensed Consolidated Statements of Operations – Supplemental Information Selling Expenses The following table summarizes the Company’s selling expenses, including sales commissions and marketing and other, which are recognized within Costs and Expenses Applicable to Revenues in the Condensed Consolidated Statements of Operations, for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, 2025 2024 (In thousands of U.S. Dollars) Sales Commissions Marketing and Other Sales Commissions Marketing and Other Technology sales (1) $ 218 $ 72 $ 348 $ 180 Image enhancement and maintenance services (2) — 3,415 — 4,101 Technology rentals (3) 191 669 141 560 Total $ 409 $ 4,156 $ 489 $ 4,841 (1) Sales commissions paid prior to the recognition of the related revenue are deferred and recognized upon the client acceptance of the IMAX System. Direct advertising and marketing costs for each IMAX System are expensed as incurred. (2) Film exploitation costs, including advertising and marketing costs, are expensed as incurred. (3) Sales commissions related to joint revenue sharing arrangements accounted for as operating leases are recognized in the month they are earned by the salesperson, which is typically the month in which the IMAX System is installed, and are subject to subsequent performance-based adjustments. Direct advertising and marketing costs for each IMAX System are expensed as incurred. 21 Table of Contents Six Months Ended June 30, 2025 2024 (In thousands of U.S. Dollars) Sales Commissions Marketing and Other Sales Commissions Marketing and Other Technology sales (1) $ 398 $ 127 $ 426 $ 346 Image enhancement and maintenance services (2) — 5,850 — 6,676 Technology rentals (3) 257 1,000 250 1,000 Total $ 655 $ 6,977 $ 676 $ 8,022 (1) Sales commissions paid prior to the recognition of the related revenue are deferred and recognized upon the client acceptance of the IMAX System. Direct advertising and marketing costs for each IMAX System are expensed as incurred. (2) Film exploitation costs, including advertising and marketing costs, are expensed as incurred. (3) Sales commissions related to joint revenue sharing arrangements accounted for as operating leases are recognized in the month they are earned by the salesperson, which is typically the month in which the IMAX System is installed, and are subject to subsequent performance-based adjustments. Direct advertising and marketing costs for each IMAX System are expensed as incurred. 22 Table of Contents Foreign Exchange Included in Selling, General and Administrative Expenses for the three and six months ended June 30, 2025 is a foreign currency net gain of $ 0.2 million and loss of $ 0.2 million, respectively (2024 — net losses of $ 0.2 million and $ 0.5 million, respectively) resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities. See Note 15 for additional information. Government Assistance For the three and six months ended June 30, 2025, the Company recognized $ 3.8 million in benefits received from the Internal Revenue Service under the Employee Retention Credit (“ERC”) program which provides for a refundable tax credit for eligible businesses that had employees and were affected during the COVID-19 pandemic. The ERC has been recognized as a reduction to Selling, General and Administrative Expenses ($ 2.5 million) and Costs and Expenses Applicable to Revenues ($ 1.3 million). Collaborative Arrangements Joint Revenue Sharing Arrangements The accounting policy for the Company’s JRSAs is disclosed in Note 2 of the Company’s audited Consolidated Financial Statements in its 2024 Form 10-K. Revenue attributable to transactions arising between the Company and its customers under JRSAs are recorded within Revenues — Technology Sales (for hybrid JRSAs) and Revenues — Technology Rentals (for traditional JRSAs). For the three and six months ended June 30, 2025, such revenues totaled $ 18.7 million and $ 37.9 million, respectively (2024 — $ 13.3 million and $ 32.5 million, respectively). IMAX Film Remastering and Distribution The Company earns revenue through the digital remastering of films and other content into IMAX formats for distribution to the IMAX network (“IMAX Film Remastering”). The accounting policy for IMAX Film Remastering and distribution arrangements is disclosed in Note 2 of the Company’s audited Consolidated Financial Statements in its 2024 Form 10-K. Revenue attributable to transactions arising between the Company and its customers under IMAX Film Remastering and distribution arrangements are included in Revenues – Image Enhancement and Maintenance Services. For the three and six months ended June 30, 2025, such revenues totaled $ 28.7 million and $ 60.4 million, respectively (2024 — $ 21.3 million and $ 51.0 million, respectively). See Note 12 for a disaggregated presentation of the Company’s revenues. Co-Produced Film Arrangements The accounting policies relating to co-produced film arrangements are disclosed in Notes 2 and 3 of the Company’s audited Consolidated Financial Statements in its 2024 Form 10-K. As of June 30, 2025, the Company is party to one co-produced film arrangement, which represented the VIE total assets balance of $ 1.8 million and liabilities balance of $ 0.4 million, and four other co-produced film arrangements, the terms of which are similar. For the three and six months ended June 30, 2025, an expense of $ 0.1 million and $ 0.2 million, respectively (2024 — $ 2.9 million and $ 3.0 million, respectively) attributable to transactions between the Company and other parties involved in the production of the films have been included in Costs and Expenses Applicable to Revenues ― Image Enhancement and Maintenance Services. 23 Table of Contents 9. Condensed Consolidated Statements of Cash Flows – Supplemental Information Changes in other operating assets and liabilities Six Months Ended June 30, (In thousands of U.S. Dollars) 2025 2024 (Increase) decrease in: Financing receivables $ ( 911 ) $ 3,554 Prepaid expenses ( 49 ) ( 663 ) Variable consideration receivables ( 683 ) ( 5,633 ) Other assets 1,155 1,412 Increase (decrease) in: Accounts payable 11,694 ( 6,233 ) Accrued and other liabilities ( 15,506 ) ( 11,523 ) Total $ ( 4,300 ) $ ( 19,086 ) Depreciation and amortization Six Months Ended June 30, (In thousands of U.S. Dollars) 2025 2024 Film assets $ 9,529 $ 13,867 Property, plant and equipment: Equipment supporting JRSAs 11,378 11,495 Other property, plant and equipment 4,426 4,296 Other intangible assets 4,205 3,289 Other assets 1,271 1,055 Total $ 30,809 $ 34,002 Write-downs Six Months Ended June 30, (In thousands of U.S. Dollars) 2025 2024 Other assets $ 381 $ — Inventories 194 166 Property, plant and equipment: Equipment supporting JRSAs 399 2,137 Other property, plant and equipment 3 52 Other intangible assets — 35 Film assets 70 9 Total $ 1,047 $ 2,399 24 Table of Contents Significant non-cash investing activities Six Months Ended June 30, (In thousands of U.S. Dollars) 2025 2024 Net decrease in accruals related to: Investment in equipment supporting JRSAs $ ( 121 ) $ ( 209 ) Acquisition of other intangible assets ( 4 ) 2 Purchases of property, plant and equipment — ( 15 ) Net amount $ ( 125 ) $ ( 222 ) 10. Income Taxes Income Tax (Expense) Benefit For the three months ended June 30, 2025, the Company recorded an income tax expense of $ 1.2 million (2024 — tax benefit of $ 4.0 million). The Company’s effective tax rate of 8.9 % for the three months ended June 30, 2025, reflects the geographic allocation of income earned in taxing jurisdictions and reflects a decrease in the valuation allowance. For the six months ended June 30, 2025, the Company recorded an income tax expense of $ 8.5 million (2024 — tax expense of $ 1.2 million). The Company’s effective tax rate of 29.4 % for the six months ended June 30, 2025, reflects the geographic allocation of income earned in taxing jurisdictions and also reflects an increase in the valuation allowance, withholding taxes and a tax benefit related to share-based compensation. On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law, introducing significant U.S. tax changes. Key provisions that may impact IMAX are Interest Deductibility (IRC §163(j)), Bonus Depreciation and Section §179. The Company is currently evaluating the Act’s potential impact on its Consolidated Financial Statements and will update its assessment as further guidance becomes available. As of June 30, 2025, the Company’s Condensed Consolidated Balance Sheets included net deferred income tax assets of $ 13.6 million (December 31, 2024 — $ 14.5 million). Realization of net deferred tax assets is dependent upon generation of sufficient taxable income in future years to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change. As of June 30, 2025, the Company’s Condensed Consolidated Balance Sheets also included deferred tax liabilities of $ 12.5 million (December 31, 2024 — $ 12.5 million) primarily related to foreign withholding taxes associated with the remaining balance of non-repatriated historical earnings that will not be indefinitely reinvested outside of Canada. 25 Table of Contents 11. Capital Stock and Reserves Share-Based Compensation For the three and six months ended June 30, 2025, share-based compensation expense totaled $ 7.4 million and $ 12.6 million, respectively (2024 — $ 6.9 million and $ 11.5 million, respectively) and is reflected in the following accounts in the Condensed Consolidated Statements of Operations: Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) 2025 2024 2025 2024 Costs and expenses applicable to revenues $ 305 $ 247 $ 596 $ 475 Selling, general and administrative expenses 6,862 6,506 11,582 10,843 Research and development 190 110 384 221 Total $ 7,357 $ 6,863 $ 12,562 $ 11,539 The following table summarizes the Company’s share-based compensation expense by each award type: Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) 2025 2024 2025 2024 Restricted Share Units $ 4,519 $ 4,133 $ 7,386 $ 6,875 Performance Stock Units 1,969 1,966 3,901 3,818 IMAX China Long Term Incentive Plan Restricted Share Units 734 695 1,047 722 IMAX China Long Term Incentive Plan Performance Stock Units 135 69 228 124 $ 7,357 $ 6,863 $ 12,562 $ 11,539 For the three and six months ended June 30, 2025, the Company’s share-based compensation expense included restricted share units to non-employees of $ 1.7 million for each such period, of which $ 1.7 million granted during the six month period vested immediately (2024 — $ 1.7 million for each such period). Stock Option Summary The following table summarizes the activity under the Company’s Stock Option Plan (“SOP”) for the six months ended June 30, 2025 and 2024: Number of Shares Weighted Average Exercise Price Per Share 2025 2024 2025 2024 Stock options outstanding, beginning of period 2,469,238 3,329,422 $ 26.27 $ 26.23 Exercised ( 48,487 ) — 21.62 — Expired ( 470,582 ) ( 607,114 ) 29.53 28.15 Cancelled — ( 1,768 ) — 24.38 Stock options outstanding, end of period 1,950,169 2,720,540 25.60 25.80 Stock options exercisable, end of period 1,950,169 2,720,540 25.60 25.80 Stock options are no longer granted under the Company’s previously approved SOP. IMAX LTIP Restricted Share Units (“RSU”) Summary The following table summarizes the activity in respect of RSUs issued under the IMAX Corporation Second Amended and Restated Long-Term Incentive Plan (as may be amended, “IMAX LTIP”) for the six months ended June 30, 2025 and 2024: 26 Table of Contents Number of Shares Weighted Average Grant Date Fair Value Per Share 2025 2024 2025 2024 RSUs outstanding, beginning of period 1,465,977 1,286,830 $ 17.16 $ 18.53 Granted 542,555 946,507 25.21 16.43 Vested and settled ( 712,092 ) ( 682,549 ) 18.18 18.70 Forfeited ( 25,593 ) ( 37,844 ) 19.83 18.34 RSUs outstanding, end of period 1,270,847 1,512,944 19.98 17.14 IMAX LTIP Performance Stock Units (“PSU”) Summary The Company grants two types of PSU awards, one which vests based on a combination of employee service and the achievement of certain Adjusted EBITDA targets and one which vests based on a combination of employee service and the achievement of total shareholder return (“TSR”) targets. The achievement of these targets are assessed over a three-year performance period, with vesting ranging from 0 % to 175 % of the initial Adjusted EBITDA PSU award or 150 % of the initial TSR PSU award, depending upon actual performance. The grant date fair value for Adjusted EBITDA PSUs is equal to the closing price of the Company’s common shares on the date of grant or the average closing price of the Company’s common shares for five days prior to the date of grant. The grant date fair value for TSR PSUs is determined using a Monte Carlo Model, influenced by share price and various assumptions, such as, market conditions and expected share price volatility over the term of the awards. The compensation expense attributable for each type of PSUs is recognized on a straight-line basis over the requisite service period. If, as a result of management’s assessment, it is projected that a greater or lesser number of PSUs will vest than previously anticipated, a life-to-date adjustment to increase or decrease compensation expense is recorded in the period that such determination is made, respectively. The expense recognized in the six months ended June 30, 2025 and 2024 includes adjustments reflecting management’s estimate of the number of Adjusted EBITDA PSUs expected to vest. The following table summarizes the activity in respect of PSUs issued under the IMAX LTIP for the six months ended June 30, 2025 and 2024: Number of Awards Weighted Average Grant Date Fair Value Per Share 2025 2024 2025 2024 PSUs outstanding, beginning of period 1,097,634 922,621 $ 17.99 $ 19.16 Granted (1) 551,084 580,336 24.17 17.97 Vested and settled (1) ( 463,212 ) ( 316,226 ) 19.88 19.71 Forfeited ( 24,456 ) ( 85,764 ) 20.44 21.00 PSUs outstanding, end of period 1,161,050 1,100,967 20.12 18.32 (1) For the six months ended June 30, 2025, the balance of shares granted includes 176,751 additional shares, at a weighted average grant date fair value per share of $ 19.53 , as PSUs granted in 2022 with Adjusted EBITDA targets vested at 175 % on account of full achievement of the targets and TSR targets vested at 123.5 %, which reflects actual performance. As of June 30, 2025, the maximum number of common shares that may be issued with respect to PSUs outstanding was 1,950,452 , assuming full achievement of the Adjusted EBITDA and TSR targets. 27 Table of Contents Issuer Purchases of Equity Securities On June 12, 2017, the Company announced that its Board of Directors approved a $ 200.0 million share repurchase program for its common shares that would have expired on June 30, 2020, which was subsequently extended through June 30, 2026 and increased to a total share repurchase authority of $ 400.0 million. In June 2025, the Company’s Board of Directors approved a 12 -month extension to its share repurchase program through June 30, 2027 and an increase of $ 100.0 million in the Company’s share repurchase program authorization. With the increase of $ 100 million, the Company’s total share repurchase authority is $ 500.0 million under the current share repurchase program. As of June 30, 2025, the Company had $ 250.7 million available under the program. The repurchases may be made either in the open market or through private transactions, including repurchases made pursuant to a plan intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, and other relevant factors. The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time. During the three and six months ended June 30, 2025, the Company did no t have any repurchases of common shares. During the three and six months ended June 30, 2024, the Company repurchased 7,646 and 1,166,370 common shares, respectively, at an average price of $ 14.98 and $ 13.99 per share, respectively, for a total of $ 0.1 million and $ 16.3 million, respectively, excluding commissions. During the six months ended June 30, 2025 and 2024, there were no shares purchases in the administration of employee share-based plans. As of June 30, 2025 and December 31, 2024, the IMAX LTIP trustee did not hold any shares. Any shares held with the trustee are recorded at cost and are reported as a reduction against Capital Stock on the Company’s Condensed Consolidated Balance Sheets. In 2024, IMAX China’s shareholders granted its Board of Directors a general mandate authorizing IMAX China’s Board of Directors, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10 % of the total number of issued shares as of June 7, 2024 ( 34,000,845 shares). This program expired on the date of the 2025 Annual General Meeting of IMAX China on June 12, 2025. During the 2025 Annual General Meeting, shareholders granted its Board of Directors a general mandate authorizing the Board of Directors of IMAX China, subject to applicable laws, to repurchase shares of IMAX China not to exceed 10 % of the total number of shares as of June 12, 2025 ( 33,919,122 shares). This program will be valid until the 2026 Annual General Meeting of IMAX China. The repurchases may be made in the open market or through other means permitted by applicable laws. IMAX China has no obligation to repurchase its shares and the share repurchase program may be suspended or discontinued by IMAX China at any time. During the three and six months ended June 30, 2025, IMAX China repurchased 1,495,900 common shares, at an average price of HKD 7.56 per share ($ 0.96 per share) for a total of HKD $ 11.3 million ($ 1.4 million), excluding commissions. During the three and six months ended June 30, 2024, IMAX China repurchased 119,000 common shares, at an average price of HKD 7.43 per share ($ 0.95 per share) for a total of HKD 0.9 million ($ 0.1 million). The change in the non-controlling interest attributable to IMAX China as a result of common shares repurchased is recorded as a reduction to Non-Controlling Interests in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Shareholders’ Equity. The difference between the consideration paid and the ownership interest obtained as a result of IMAX China share repurchases is recorded within Other Equity in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Shareholders’ Equity. Basic and Diluted Weighted Average Shares Outstanding The following table reconciles the denominator of the basic and diluted weighted average share computations: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2025 2024 2025 2024 Issued and outstanding, beginning of period 53,742 52,625 52,946 53,260 Weighted average number of shares issued (repurchased), net 9 8 502 ( 692 ) Weighted average number of shares outstanding - basic 53,751 52,633 53,448 52,568 Weighted average effect of potential common shares, if dilutive 1,410 795 1,616 818 Weighted average number of shares outstanding - diluted 55,161 53,428 55,064 53,386 For the three and six months ended June 30, 2025, the calculation of diluted weighted average shares outstanding excludes 929,825 and 968,984 shares, respectively (2024 — 3,118,725 and 3,716,606 shares, respectively) that are issuable upon the vesting or exercise of share-based compensation including: (i) $ nil RSUs (2024 — 355,337 and 664,720 RSUs, respectively), (ii) 86,784 and 125,943 28 Table of Contents PSUs, respectively (2024 — 42,848 and 331,346 PSUs, respectively) and (iii) 843,041 stock options, respectively (2024 — 2,720,540 stock options, respectively), as the effect would be anti-dilutive. The calculation of diluted weighted average shares outstanding for the three and six months ended June 30, 2025 and 2024 also excludes any shares potentially issuable upon the conversion of the Convertible Notes as the average market price of the Company’s common shares during the period of time they were outstanding was less than the conversion price of the Convertible Notes. Statutory Surplus Reserve Pursuant to the corporate law of the PRC, entities registered in the PRC are required to maintain certain statutory reserves, which are appropriated from after-tax profits (after offsetting accumulated losses from prior years), as reported in their respective statutory financial statements, before the declaration or payment of dividends to equity holders. All statutory reserves are created for specific purposes. The statutory surplus reserve of RMB 37.7 million ($ 5.8 million) has reached 50 % of the Company’s PRC subsidiaries’ registered capital, and as such, no further contributions to the reserve are required. 29 Table of Contents 12. Revenue from Contracts with Customers Disaggregated Information About Revenue The following tables summarize the Company’s Revenues by reportable segment and revenue stream type for the three and six months ended June 30, 2025 and 2024: Three Months Ended June 30, 2025 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment: Film Remastering and Distribution $ — $ 31,650 $ — $ — $ 31,650 Other Content Solutions — 1,907 408 — 2,315 — 33,557 408 — 33,965 Technology Products and Services Segment: System Sales 18,000 — — — 18,000 System Rentals — — 18,708 — 18,708 Maintenance — 16,059 — — 16,059 Finance Income — — — 2,872 2,872 18,000 16,059 18,708 2,872 55,639 Sub-total for reportable segments 18,000 49,616 19,116 2,872 89,604 All Other 842 1,238 — — 2,080 Total $ 18,842 $ 50,854 $ 19,116 $ 2,872 $ 91,684 Six Months Ended June 30, 2025 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment Film Remastering and Distribution $ — $ 63,807 $ — $ — $ 63,807 Other Content Solutions — 3,824 583 — 4,407 — 67,631 583 — 68,214 Technology Products and Services Segment System Sales 30,720 — — — 30,720 System Rentals — — 37,844 — 37,844 Maintenance — 31,717 — — 31,717 Finance Income — — — 5,951 5,951 30,720 31,717 37,844 5,951 106,232 Sub-total for reportable segments 30,720 99,348 38,427 5,951 174,446 All Other 1,646 2,259 — — 3,905 Total $ 32,366 $ 101,607 $ 38,427 $ 5,951 $ 178,351 30 Table of Contents Three Months Ended June 30, 2024 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment Film Remastering and Distribution $ — $ 21,304 $ — $ — $ 21,304 Other Content Solutions — 13,644 128 — 13,772 — 34,948 128 — 35,076 Technology Products and Services Segment System Sales 19,443 — — — 19,443 System Rentals — — 13,915 — 13,915 Maintenance — 15,231 — — 15,231 Finance Income — — — 2,309 2,309 19,443 15,231 13,915 2,309 50,898 Sub-total for reportable segments 19,443 50,179 14,043 2,309 85,974 All Other 977 2,010 — — 2,987 Total $ 20,420 $ 52,189 $ 14,043 $ 2,309 $ 88,961 Six Months Ended June 30, 2024 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment Film Remastering and Distribution $ — $ 51,025 $ — $ — $ 51,025 Other Content Solutions — 17,936 128 — 18,064 — 68,961 128 — 69,089 Technology Products and Services Segment System Sales 26,561 — — — 26,561 System Rentals — — 32,516 — 32,516 Maintenance — 30,392 — — 30,392 Finance Income — — — 4,579 4,579 26,561 30,392 32,516 4,579 94,048 Sub-total for reportable segments 26,561 99,353 32,644 4,579 163,137 All Other 1,763 3,184 — — 4,947 Total $ 28,324 $ 102,537 $ 32,644 $ 4,579 $ 168,084 For the three and six months ended June 30, 2025, revenues earned from Technology Sales include variable consideration of $ 3.1 million and $ 6.4 million, respectively (2024 — $ 7.7 million and $ 9.4 million, respectively). For the three and six months ended June 30, 2025, revenues earned from leasing arrangements total $ 19.1 million and $ 38.5 million, respectively (2024 — $ 13.3 million and $ 32.5 million, respectively), including $ 19.1 million and $ 38.4 million, respectively, in Revenues ― Technology Rentals (2024 — $ 13.9 million and $ 32.5 million, respectively), and $ 0.1 million in the three and six months ended June 30, 2025, respectively, in Revenues ― Technology Sales (2024 — a reversal of $ 0.7 million and $ nil , respectively). Deferred Revenue IMAX System sale and lease arrangements include a requirement for the Company to provide maintenance services over the life of the arrangement, some of which maintenance services are subject to a consumer price index adjustment each year. In circumstances where customers prepay the entire term’s maintenance fee based on the original arrangement, additional payments are due to the Company for the years after its extended warranty and maintenance obligations expire. Payments, upon renewal each year, are either prepaid or made in arrears and can vary in frequency from monthly to annually. As of June 30, 2025, $ 21.6 million of consideration 31 Table of Contents has been deferred in relation to outstanding maintenance services to be provided on existing maintenance contracts (December 31, 2024 — $ 26.5 million). During the three and six months ended June 30, 2025, $ 10.8 million and $ 19.8 million of revenue, respectively, was recognized from the $ 52.7 million balance of deferred revenue as of December 31, 2024. During the three and six months ended June 30, 2024, $ 12.1 million and $ 24.2 million of revenue, respectively, was recognized from the $ 67.1 million balance of deferred revenue as of December 31, 2023. 13. Segment Reporting The Company’s Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker (“CODM”), as such term is defined under U.S. GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Company’s segments. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies of the 2024 Form 10-K. Intercompany profit or loss is not included in the evaluation of performance and allocation of resources. Segment Financial Information The following table presents the Company’s revenue and gross margin by reportable segment for the three months ended June 30, 2025 and 2024: Revenue (1) Gross Margin (In thousands of U.S. Dollars) 2025 2024 2025 2024 Content Solutions $ 33,965 $ 35,076 $ 22,431 $ 16,138 Technology Products and Services 55,639 50,898 30,178 25,783 Sub-total for reportable segments 89,604 85,974 52,609 41,921 All Other 2,080 2,987 993 2,006 Total $ 91,684 $ 88,961 $ 53,602 $ 43,927 (1) The Company’s largest customer represents 12 % of total Revenues for the three months ended June 30, 2025 (2024 — 14 %) and one single customer accounted for more than 10 % of the Company’s total Accounts Receivable balance as of June 30, 2025. No single customer accounted for more than 10% of the Company’s total Accounts Receivable balance as of December 31, 2024. The following table presents the Company’s revenue and gross margin by reportable segment for the six months ended June 30, 2025 and 2024: Revenue (1) Gross Margin (In thousands of U.S. Dollars) 2025 2024 2025 2024 Content Solutions $ 68,214 $ 69,089 $ 45,985 $ 38,237 Technology Products and Services 106,232 94,048 59,264 49,367 Sub-total for reportable segments 174,446 163,137 105,249 87,604 All Other 3,905 4,947 1,529 3,212 Total $ 178,351 $ 168,084 $ 106,778 $ 90,816 (1) The Company’s largest customer represented 10 % of total Revenues for the six months ended June 30, 2025 (2024 — 13 %). One single customer comprised of more than 10 % of the Company’s total Accounts Receivable as of June 30, 2025. No single customer comprised of more than 10% of the Company’s total Accounts Receivable as of December 31, 2024. The following table presents the Costs and Expenses Applicable to Revenues for the Content Solutions segment that is made available to the CODM as part of the Company’s annual and quarterly financial reporting requirements in accordance with U.S. GAAP: 32 Table of Contents Content Solutions Segment: Three Months Ended June 30, Six Months Ended June 30, (In thousands of U.S. Dollars) 2025 2024 2025 2024 Revenue $ 33,965 $ 35,076 $ 68,214 $ 69,089 Film asset amortization 5,190 8,797 9,529 13,867 Marketing and other selling expenses 3,415 4,101 5,850 6,676 Co-produced film participation expenses 82 2,873 179 2,985 Other segment expenses (1) 2,847 3,167 6,671 7,324 Total Costs and Expenses Applicable to Revenues 11,534 18,938 22,229 30,852 Gross Margin $ 22,431 $ 16,138 $ 45,985 $ 38,237 (1) Included within the Other segment expenses are costs related to film distribution, post production costs, production costs, and network connectivity fees. The following table presents the Costs and Expenses Applicable to Revenues for the Technology Products and Services reportable segment that is made available to the CODM as part of the Company’s annual and quarterly financial reporting requirements in accordance with U.S. GAAP: Technology Products and Services Segment: Three Months Ended June 30, Six Months Ended June 30, (In thousands of U.S. Dollars) 2025 2024 2025 2024 Revenue $ 55,639 $ 50,898 $ 106,232 $ 94,048 Depreciation of equipment supporting JRSAs 5,716 5,800 11,378 11,495 Marketing and other selling expenses 409 489 655 676 Write-down of equipment supporting JRSAs 311 2,080 399 2,137 Write-down of inventory 91 151 194 166 Other segment expenses (1) 18,934 16,595 34,342 30,207 Total Costs and Expenses Applicable to Revenues 25,461 25,115 46,968 44,681 Gross Margin $ 30,178 $ 25,783 $ 59,264 $ 49,367 (1) Included within the Other segment expenses are costs related to the manufacturing and build of IMAX Systems recognized in the period, maintenance and warranty costs, and other product related costs. Also included is a recovery of $ 0.5 million for insurance proceeds received during the period, associated with inventory costs that were previously written off. The total proceeds received were $ 0.7 million, and the incremental gain of $ 0.2 million was recognized in selling, general and administrative expenses. Geographic Information Revenue by geographic area is based on the location of the customer. Revenue related to IMAX Film Remastering process is presented based upon the geographic location of the IMAX System that exhibits the remastered films. IMAX Film Remastering and distribution revenue is generated through contractual relationships with studios and other third parties that may not be in the same geographical location as the IMAX Systems that exhibit the remastered films. The following table summarizes the Company’s revenues by geographic area for the three and six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) 2025 2024 2025 2024 United States $ 42,391 $ 38,296 $ 64,962 $ 64,900 Greater China 17,677 22,750 57,802 44,203 Western Europe 14,112 10,508 21,665 24,699 Asia (excluding Greater China) 9,312 9,587 18,603 18,713 Latin America 2,150 2,258 4,107 3,718 Canada 2,494 3,159 3,896 5,567 Rest of the World 3,548 2,403 7,316 6,284 Total $ 91,684 $ 88,961 $ 178,351 $ 168,084 33 Table of Contents The United States, Greater China (which includes the mainland of the People’s Republic of China, Hong Kong, Macau, and Taiwan), Western Europe, and Asia (excluding Greater China) each comprise greater than 10 % of the Company’s total revenues for the three and six months ended June 30, 2025 and 2024. 14. Employee’s Pension and Postretirement Benefits Defined Benefit Plan The Company has an unfunded defined benefit pension plan, the Supplemental Executive Retirement Plan (the “SERP”), covering its CEO, Richard L. Gelfond. Under the terms of his employment agreement, as amended, the total benefit payable to Mr. Gelfond under the SERP is fixed at $ 20.3 million. As of June 30, 2025, the Company’s projected benefit obligation under the SERP was $ 19.4 million (December 31, 2024 — $ 19.0 million). For the three and six months ended June 30, 2025, the Company recorded interest costs of $ 0.2 million and $ 0.4 million, respectively, (2024 — $ 0.2 million and $ 0.4 million, respectively) related to the SERP. The Company expects to recognize additional interest costs of $ 0.4 million related to the SERP during the remainder of 2025. No contributions are expected to be made to the SERP in 2025. Postretirement Benefits – Executives The Company has an unfunded postretirement plan for Mr. Gelfond and Bradley J. Wechsler, former Chairman of the Company’s Board of Directors (the “Executive Postretirement Benefit Plan”). As of June 30, 2025, the Company’s postretirement benefits obligation under this plan was $ 0.5 million (December 31, 2024 — $ 0.5 million). For the three and six months ended June 30, 2025, the Company has recorded an expense of less than $ 0.1 million, respectively (2024 — less than $ 0.1 million, respectively) related to this plan. Postretirement Benefits – Canadian Employees The Company has an unfunded postretirement plan for its Canadian employees meeting specific eligibility requirements. The Company will provide eligible participants, upon retirement, with health and welfare benefits. As of June 30, 2025, the Company’s postretirement benefits obligation under this plan was $ 0.8 million (December 31, 2024 — $ 0.8 million). For the three and six months ended June 30, 2025, the Company has recorded expense of less than $ 0.1 million, respectively, (2024 — less than $ 0.1 million, respectively) related to this plan. Deferred Compensation Benefit Plan The Company maintained a nonqualified deferred compensation benefit plan (the “Retirement Plan”) covering the former CEO of IMAX Entertainment and Senior Executive Vice President of the Company. Under the terms of the Retirement Plan, the benefits were due to vest in full if the executive incurred a separation from service from the Company (as defined therein). As of June 30, 2025, the benefit obligation related to the Retirement Plan was $ 4.3 million (December 31, 2024 — $ 4.2 million) and is recorded on the Company’s Condensed Consolidated Balance Sheets within Accrued and Other Liabilities. As the Retirement Plan is fully vested, the benefit obligation is measured at the present value of the benefits expected to be paid in the future with the accretion of interest recognized in the Condensed Consolidated Statements of Operations within Retirement Benefits Non-Service Expense. The Retirement Plan is funded by an investment in company-owned life insurance (“COLI”), which is recorded at its fair value on the Company’s Condensed Consolidated Balance Sheets within Prepaid Expenses. As of June 30, 2025, fair value of the COLI asset was $ 3.7 million (December 31, 2024 — $ 3.6 million). Gains and losses resulting from changes in the cash surrender value of the COLI asset are recognized in the Condensed Consolidated Statements of Operations within Realized and Unrealized Investment Gains. 34 Table of Contents 15. Financial Instruments Financial Instruments The Company’s cash is invested with various major financial institutions. The Company’s $ 109.3 million balance of cash and cash equivalents as of June 30, 2025 (December 31, 2024 — $ 100.6 million) included $ 100.9 million in cash held outside of Canada (December 31, 2024 — $ 85.4 million), of which $ 61.5 million was held in the People’s Republic of China (“PRC”) (December 31, 2024 — $ 47.5 million). Fair Value Measurements The carrying values of the Company’s Cash and Cash Equivalents, Accounts Receivable, Variable Consideration, Accounts Payable and Accrued Liabilities due within one year approximate their fair values due to the short-term maturity of these instruments. Including these instruments, the Company’s financial instruments consisted of the following: As of June 30, 2025 As of December 31, 2024 (In thousands of U.S. Dollars) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Level 2 Net financed sales receivables (1) $ 92,481 $ 83,990 $ 90,546 $ 81,876 Net investment in sales-type leases (1) 28,641 26,816 29,339 25,322 Convertible Notes (2) ( 230,000 ) ( 264,778 ) ( 230,000 ) ( 234,009 ) (1) Fair value is determined using quoted prices in active markets. (2) Fair value is determined using quoted market prices that are observable in the market or that could be derived from observable market data. Foreign Exchange Risk Management The Company is exposed to market risk from changes in foreign currency rates. A majority of the Company’s revenues is denominated in U.S. Dollars while a significant portion of its costs and expenses is denominated in Canadian Dollars. A portion of the Company’s net U.S. Dollar cash is converted to Canadian Dollars to fund Canadian Dollar expenses through the spot market. In China and Japan, the Company has ongoing operating expenses related to its operations in RMB, HKD and Japanese Yen, respectively. Net cash flows are converted to and from U.S. Dollars through the spot market. The Company also has cash receipts under leases denominated in RMB, Japanese Yen, Canadian Dollars and Euros which are converted to U.S. Dollars through the spot market. In addition, because IMAX films generate box office receipts in 89 different countries, unfavorable exchange rates between applicable local currencies and the U.S. Dollar could have an impact on box-office receipts and the Company’s revenues and results of operations. The Company’s policy is to not use any financial instruments for trading or other speculative purposes. The Company has entered into a series of foreign currency forward contracts to manage the risks associated with the volatility of foreign currencies. Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continued to meet hedge effectiveness tests as of June 30, 2025 (the “Foreign Currency Hedges”), with settlement dates throughout 2025 and 2026. Foreign currency derivatives are recognized and measured on the Condensed Consolidated Balance Sheets at fair value. Changes in the fair value (i.e., gains or losses) are recognized in the Condensed Consolidated Statements of Operations except for derivatives designated and qualifying as foreign currency cash flow hedging instruments. The Company currently has cash flow hedging instruments associated with Selling, General and Administrative Expenses. For foreign currency cash flow hedging instruments related to Selling, General and Administrative Expenses, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in Accumulated Other Comprehensive Loss (“AOCI”) and reclassified to the Condensed Consolidated Statements of Operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the Condensed Consolidated Statements of Operations. 35 Table of Contents The following tabular disclosures reflect the impact that derivative instruments and hedging activities have on the Company’s Condensed Consolidated Financial Statements: Notional value of derivatives in foreign exchange contracts: June 30, December 31, (In thousands of U.S. Dollars) 2025 2024 Derivatives designated as hedging instruments: Foreign exchange contracts — Forwards $ 51,324 $ 48,376 Fair value of derivatives in foreign exchange contracts: June 30, December 31, (In thousands of U.S. Dollars) Balance Sheet Location 2025 2024 Derivatives designated as hedging instruments: Foreign exchange contracts — Forwards Other assets $ 1,430 $ — Accrued and other liabilities ( 27 ) ( 2,029 ) $ 1,403 $ ( 2,029 ) Derivatives in foreign currency hedging relationships are as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) 2025 2024 2025 2024 Foreign exchange contracts — Forwards Derivative Gain (Loss) Recognized in OCI (Effective Portion) $ 2,520 $ ( 365 ) $ 1,805 $ ( 1,281 ) Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) Location of Derivative Loss Reclassified from AOCI (Effective Portion) 2025 2024 2025 2024 Foreign exchange contracts — Forwards Selling, general and administrative expenses $ ( 292 ) $ ( 67 ) $ ( 1,627 ) $ ( 78 ) The Company’s estimated net amount of the existing gain as of June 30, 2025 is $ 1.4 million, which is expected to be reclassified to the Condensed Consolidated Statements of Operations within the next twelve months. 16. Non-Controlling Interests IMAX China Non-Controlling Interest As of June 30, 2025, t he Company indirectly owned 71.72 % of the outstanding equity interest in IMAX China, whose shares trade on the Hong Kong Stock Exchange (December 31, 2024 — 71.40 %). IMAX China remains a consolidated subsidiary of the Company. As of June 30, 2025, the balance of the Company’s non-controlling interest in IMAX China was $ 84.0 million (December 31, 2024 — $ 78.1 million). For the three and six months ended June 30, 2025, the net income attributable to the non-controlling interest in IMAX China is $ 1.0 million and $ 6.8 million, respectively (2024 — $ 1.5 million and $ 3.6 million, respectively). 17. Restructuring and Other Charges In the three and six months ended June 30, 2025, the Company incurred $ 0.8 million for each such period (2024 — $ nil during each such period) in Restructuring and other charges in the Consolidated Statements of Operations. These charges are associated with continued strategic initiatives aimed at enhancing operational efficiency, reducing costs, and optimizing the Company’s organization structure. Specifically, the Company incurred $ 0.5 million in connection with the implementation of its plan to optimize its organizational structure, including the elimination of redundant roles, addressing spans and layers to capture efficiencies and centralize 36 Table of Contents certain operational roles. Additionally, the Company incurred $ 0.3 million of non-recurring fees relating to the 2024 internal asset sale. As of June 30, 2025, the Company’s liability was $ 1.4 million (December 31, 2024 — $ 1.4 million) on the Consolidated Balance Sheets within Accrued and other liabilities related to Restructuring and other charges. 37 Table of Contents