Imax Posts Quarterly Profit Amid ‘Avatar’ Sequel’s Blockbuster Run

Etan Vlessing
·3 min read
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The box office recovery at Imax, which is led by CEO Richard Gelfond, continues as James Cameron’s Avatar: The Way of Water played on its screens worldwide during the first quarter of the year.

Overall revenue at the giant screen technologies company came to $86.9 million, up 45 percent from a year-earlier $60 million. And Imax swung to a profit of $2.5 million, against a year-earlier loss of $13.6 million as the company was recovering from the impact of the pandemic on the exhibition industry.

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The adjusted net profit per share in Q1 came to 16 cents, which compared to a 14 cents per-share loss in the same year-ago period. Content Solutions revenues — or business from agreements with the major studios and filmmakers — at $32.1 million increased 53 percent year-over-year, driven by strong box office growth worldwide.

Technology Products and Services revenues, or the proceeds from the sale, lease and maintenance of Imax’s theater systems network, increased 36 percent to $51.7 million.

Having announced a series of multi-theater sales deals at CinemaCon, including for Mexico and Florida, Imax is touting its giant screen technologies sales as having returned to pre-pandemic levels as its global box office take jumps on the strength of play for the Avatar sequel in its venues.

Imax signed deals for 28 theater systems in the first quarter, all for new locations except one, and has 63 signings year-to-date.

During the latest quarter, Imax took in a record first quarter global box office at $273 million, compared to a year-earlier $173.2 million in movie ticket sales worldwide. That global box office bump was driven by a mix of Hollywood tentpoles and local language offerings, which accounted for 31 percent, or $80 million, of overall movie ticket sales during the first quarter.

Hollywood blockbusters that played in Imax theaters during the first quarter included Creed III, Ant-Man and the Wasp: Quantumania and John Wick 4. The local language releases included Japan’s Suzume from Toho and Yash Raj Films’ Pathaan in India and Chinese box office, including China Film Group’s The Wandering Earth 2 release as China continues to reopen its movie theaters.

“Many of these films — including India’s Pathaan and RRR and Japan’s Suzume — drove box office in countries outside their home markets, further establishing Imax as a leader in the global export of local language blockbusters,” Gelfond told analysts during an after-market call.

As examples, Suzume did more giant screen box office in China than it earned in Japan, and RRR delivered greater Imax box office in Japan than in India to date. “That’s a total different look than we’ve had in the past,” the Imax chief argued.

Imax is also looking to expand the use of its proprietary cameras with special lenses in the production of local language movies in Japan and India after making inroads in China.

Besides success with local language films in China, Gelfond said it was too early to judge the overall success of Hollywood tentpoles in that key and recovering Asian market after play for Avatar: The Way of Water and other movies like Fast & Furious X and Transformers: Rise of the Beasts cleared for Chinese releases are set for local play.

“We have to wait and give it some time. I’m personally optimistic that movies that played well before, that those genres and movies will continue to do well,” Gelfond argued.

Moving forward, Imax and its partnership with major exhibitors still have to contend with increasing streaming competition and a recessionary threat impacting consumer spending at the multiplex.

“The data is clear, that a theatrical release really helps a streaming release,” Gelfond told analysts when asked about major studios making a pivot back to the multiplex with movie releases as the pandemic ebbs away, and tech giants like Apple and Amazon making big bets on theatrical releases as they embrace the big screen experience.

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