Q4 2023 IMAX Corp Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to Imax Corporation's fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen-only mode.
Speaker Change: Good day, and thank you for standing by and welcome to the IMAX Corporation's fourth quarter and full year 'twenty 'twenty earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today. Jennifer Horswey, Head of Investor Relations and Senior Vice President. Please go ahead.
Speaker Change: You will then hear an automated message advising you of heinous race to withdraw your question. Please press star one again, please be advised that today's conference is being recorded I would now.
Speaker Change: Now I'd like to hand, the conference over to your first speaker today, Jennifer Horse, we head of Investor Relations and senior Vice President. Please go ahead.
Jennifer Horswey: Good afternoon, and thank you for joining us on today's full year and fourth quarter 2023 earnings conference call. On the call today to review the financial results are Rich Gelfond, Chief Executive Officer, and Natasha Fernandez, our Chief Financial Officer. Rob Lister, Chief Legal Officer, is also joining us today. This conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation has been posted in the Investor Relations section of our site. Our historical Excel model is posted to the website as well.
Jennifer Horse: Good afternoon, and thank you for joining us on today's full year and fourth quarter 2023 earnings conference call.
Jennifer Horse: On the call today to review the financial results are rich <unk> chief.
Jennifer Horse: Executive Officer, and Natasha Fernandez, our Chief Financial Officer, Rob Lister Chief Legal Officer is also joining us today.
Today's conference call is being webcast in its entirety on our website.
Jennifer Horse: A replay of the webcast will be made available shortly after the call.
Jennifer Horse: In addition, the full text of our earnings press release, and the slide presentation have been posted on the Investor Relations section of our site. Our historical Excel model is posted to the website as well.
Jennifer Horswey: I would like to remind you of the following information regarding forward-looking statements. Today's call, as well as the accompanying slide deck, may include statements that are forward-looking and that pertain to future results or outcomes. These forward-looking statements are subject to risks and uncertainties that could cause our actual future results to not occur or occurrences to differ.
Jennifer Horse: I would like to remind you of the following information regarding forward looking statements today's call as well as the accompanying slide deck may include statements that are forward looking and that pertain to future results or outcomes. These forward looking statements are subject to risks and uncertainties that could cause our actual future results to not occur.
Jennifer Horswey: Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information, future events, or otherwise. During today's call, references may be made to certain non-GAAP financial measures. Discussion of management's use of these measures and the definition of these measures, as well as a reconciliation to non-GAAP financial measures, are contained in this afternoon's press release and our earnings materials, which are available on the Investor Relations page of our website at imax.com. With that, let me now turn the call over to Mr. Richard Gelfond. Thanks, Jennifer, and thanks everyone for joining us today.
Jennifer Horse: Occurrences to differ.
Jennifer Horse: Refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes.
Jennifer Horse: Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information future events or otherwise.
Jennifer Horse: During today's call references maybe made to certain non-GAAP financial measures discussion of management's use of these measures and the definition of these measures as well as a reconciliation to non-GAAP financial measures are contained in this afternoon's press release, and our earnings materials, which are available on the Investor Relations page.
Jennifer Horse: Of our website at IMAX Dot com with that let me now turn the call over to Mr. Richard <unk> rich.
Richard: Thanks, Jennifer and thanks, everyone for joining us today IMAX powers, all inspiring experiences for audiences around the world with a premium offering that invites people into exclusive at often impossible situations worlds, both real and imagine alongside others or.
Richard Lewis Gelfond: Imax powers awe-inspiring experiences for audiences around the world with a premium offering that invites people into exclusive and often impossible situations, worlds both real and imagined, alongside others who are equally immersed. Our business capitalizes on the limitlessness of human imagination, our innate desire for shared experiences, and the unceasing human demand for all. These are evergreen market opportunities that transcend what Hollywood movie is playing at your local multiplex on any given week, which is why Imax remains among the most consistent winners in global media and entertainment and why we delivered such strong results in 2023. Adjusted EPS for the full year was $0.94, up from $0.06.
Richard: Equally immersed.
Richard: Our business capitalizes on the women listeners of human imagination.
Richard: <unk> desire for shared experiences and the unceasing human demand for all these are evergreen market opportunities that transcend what Hollywood movie is playing at your local multiplex on any given weekend.
Richard: This is why IMAX remains among the most consistent winners and global media and entertainment and why we delivered such strong results in 2023 adjusted EPS for the full year of 94 cents up from six in 2022.
Richard Lewis Gelfond: 2022, growth of 25% or greater across revenue, gross margin, and adjusted EBIT die, operating cash flow of $60 million, up from $17 million the prior year. We installed 128 IMAX systems worldwide at the high end of our guidance, and signed agreements for 129 new and upgraded systems. And we grew Global Box Office to nearly $1.1 billion, our second highest grossing year in our history. When you look at our results and growing demand for Imax across the ecosystem, it's increasingly clear that Imax is indeed the future of cinema. I'm in L.A. for the month, and this is a growing refrain among Hollywood filmmakers, studios, and producers, all of whom want to capitalize on the shift to Imax at the box office and who see increased market pressure on exhibition to meet growing consumer demand for premium experiences, a trend across all of out-of-home energy. Our global technology platform and asset life model remain remarkably resilient. Our guidance was in line for the year, even with a fourth quarter heavily impacted by the labor strikes in Hollywood. Strike-related slate delays have impacted the current quarter as well.
Richard: Growth of 25% or greater across revenue gross margin and adjusted EBITDA.
Richard: Operating cash flow of $60 million up from $17 million. The prior year, we installed 128 IMAX systems worldwide at the high end of our guidance and signed agreements for 129, new and upgraded systems and we grew global.
Richard: Box office to nearly $1 1 billion, our second highest grossing year in our history.
Richard: When you look at our results and growing demand for IMAX across the ecosystem, it's increasingly clear that IMAX is indeed, the future of cinema.
Richard: Hi, I'm in L. A for the month and this is a growing refrain among Hollywood filmmakers studios and producers all of whom want to capitalize on the shift to IMAX at the box office.
Richard: And who see increased market pressure on exhibition to meet growing consumer demand for premium experiences a trend across all of out of home entertainment.
Richard: Our global technology platform and asset light model remained remarkably resilient.
Richard: Guidance was in line for the year, even with a fourth quarter heavily impacted by the labor strikes in Hollywood strike related slate delays have impacted the current quarter as well, while we never like seeing our stock go down. This has created an opportunity for us to buy back more shares.
Richard Lewis Gelfond: While we never like seeing our stock go down, this has created an opportunity for us to buy back more shares. We have repurchased more than $40 million of Imax stock since October 23. We believe Imax stock is very undervalued given our growth outlook and we expect to continue to use our strong balance sheet to be a buyer at the press level. Looking ahead, we expect to deliver another solid financial performance in 2024, including growth and system installs between 120 to 150 for the full year. Similar results to 2023 for Global Box, total adjusted EBITDA margin in the high 30s percent range. We expect 2025 to be a strong growth year, including at least high single-digit revenue growth, mid single-digit percentage network growth, and total adjusted EBITDA margin of approximately 40%. Our strategy for the year ahead is two-pronged: accelerate global sales activity and network growth.
Richard: We have repurchased more than $40 million.
Richard: IMAX stock since October 23, we believe IMAX stock is very undervalued, given our growth outlook and would expect to continue to use our strong balance sheet to be a buyer at depressed levels. Looking ahead, we expect to deliver another solid financial performance in 2000.
Richard: 24, including.
Richard: Growth in system installs to between 120 to 150 for the full year.
Richard: Similar results to 2023 for global box office.
Richard: Total adjusted EBITDA margin in the high 30% range, we expect 2025 to be a strong growth year, including at least high single digit revenue growth mid single digit percentage network growth total adjusted EBITDA margin of error.
Richard: Approximately 40% our.
Richard: Our strategy for the year ahead is two pronged.
Richard: Accelerate global sales activity and network growth by capitalizing on our expanded content portfolio and a proven returns IMAX technology delivers for our clients and to curate a diversified global content portfolio, we expect.
Richard Lewis Gelfond: Capitalizing on our expanding content portfolio and the proven returns Imax technology delivers for our clients, we expect to deliver more than 100 IMAX experiences for the first time in our history by expanding further into local language, blockbusters, Imax documentaries, and new and exclusive Imax experiences and events. Today I'd like to discuss how we're advancing our strategy on both while continuing to explore new, further opportunities for growth. Then I'll turn it over to Natasha to detail our financial results before opening it up to your questions.
Richard: To deliver more than 100 IMAX experiences for the first time in our history by expanding further into local language blockbusters, IMAX documentaries, and new and exclusive IMAX experiences and events today I'd like to discuss how we're advancing our strategy on both fronts.
While continuing to explore new further opportunities for growth there.
Richard: I'll turn it over to Natasha to detail our financial results before opening it up to your questions.
Richard Lewis Gelfond: Network growth. First, we recently conducted a new worldwide zoning analysis of our technology network for the first time since 2019, to measure our total addressable market, including how many Imax locations can be sustained in each territory. As a result, Imax is increasing its network zones to 3,619 globally, from 3,318 previously. Imax is a highly recognizable global brand and premium cinematic experience. And yet, we still have significant room to grow with our core technology products. By our analysis, we are only at 47% global penetration with our current footprint of open locations, and we can sell or open approximately 1,900 additional IMAX systems worldwide, more than double the size of our network. As a reminder, we update the zoning analysis every few years, and we'll continue to do so.
Natasha Fernandez: Network growth first we recently conducted a new worldwide zoning analysis of our technology network for the first time since 2019.
Natasha Fernandez: To measure our total addressable market, including helmet, how many IMAX locations can be sustained in each territory.
Natasha Fernandez: As a result, IMAX is increasing its networks zones to 3619 globally.
Natasha Fernandez: From 3318 previously.
Natasha Fernandez: IMAX is a highly recognizable global brand and premium cinematic experiences and yet we still have significant room to grow with our core technology product by our analysis, we are only at 47% global penetration with our current footprint of <unk>.
Natasha Fernandez: <unk> locations and we can sell or open approximately 1900 additional IMAX systems worldwide more than double the size of our networks.
Natasha Fernandez: As a reminder, we update the zoning analysis every few years and we'll continue to do so.
Richard Lewis Gelfond: Our sales activity in 2023 underscores the strong demand for Imax technology, even in a period of uncertainty coming out of the strike. Our 129 signings for the year were delivered with 36 partners, including 7 new clients across 26 territories worldwide. Eighty-four percent were for new Imax locations. Of the 128 system installs, we completed in 23, and Imax records 61 were in international markets outside of North America and China, further diversifying our unique footprint. These installations were weighed toward our most productive markets as well.
Natasha Fernandez: Our sales activity in 2023 underscores the strong demand for IMAX technology, even in a period of uncertainty coming out of the strikes.
Natasha Fernandez: 102009 signings for the year, we delivered with 36 partners, including seven new clients across 26 territories worldwide.
Natasha Fernandez: 84% were for new IMAX locations.
Natasha Fernandez: 128 system installs, we completed 23 and IMAX record 61 were in international markets outside of North America, and China further diversifying our unique footprint. These installs were weighted toward our most productive markets as well.
Richard Lewis Gelfond: Overall, installs were in territories delivering per-screen averages that were more than 20% higher than the average PSA across our full network. Turning now to content, we are focused on curating a diversified global content portfolio and creatively managing our slate to deliver more than 100 IMAX experiences in a single year. For the first time in our history, we are appealing to a wider audience with awe-inspiring experiences drawn from across Hollywood, the international film industry, documentaries, and events. This diversity continues to be a key differentiator for Imax and the biggest reason why we are a growth platform worldwide. Despite a strike-impacted fourth quarter, Imax Global Box Office in 2023 increased 2% over its 2017-19 average. Compare that to a 21% decline for exhibitors worldwide, based on estimates by Gower Street Analytics. We think of our portfolio in terms of three product lines. First Blockbusters, both Hollywood and local language.
Natasha Fernandez: Overall, installs where territories delivering per screen averages that were more than 20% higher than the average Psa across a full network.
Natasha Fernandez: Turning now to content, we are focused on curating, a diversified global content portfolio and creatively managing a slave to deliver more than 100 IMAX experiences in a single year for the first time in our history.
Natasha Fernandez: We are appealing to wider audience with all inspiring experiences drawn from across Hollywood International film industries documentaries.
Natasha Fernandez: Events.
Natasha Fernandez: This diversity continues to be a key differentiator for IMAX and the biggest reason why we are a growth platform worldwide.
Natasha Fernandez: This despite a strike impacted fourth quarter IMAX Global box office in 2023 increased 2% over 2017 to 19 average compare that to a 21% decline for exhibitors worldwide based on <unk>.
Natasha Fernandez: Estimates by Gower Street analytics, we think of our portfolio and three product lines first blocked up busters, both Hollywood and local language search.
Richard Lewis Gelfond: Second, Imax documents, and third, IMAX events, experiences that widen our aperture across genres, including music, gaming, sports, and more, as well as live and interactive formats. First, although the 2024 Hollywood slate has clearly been impacted by the strikes, we remain optimistic given the strong indexing we're driving on a title-by-title basis and the consistently high share of box office we capture in the post-pandemic world. This weekend's Dune Part Two will offer an excellent example of the differentiating advantage of the Imax platform. The film was shot entirely with Imax cameras and will receive a limited run in Imax.
Natasha Fernandez: IMAX documentaries.
Natasha Fernandez: Our IMAX events experiences that widen our aperture across genres, including music gaming sports and more as well as live and interactive formats.
Natasha Fernandez: First although the 'twenty 'twenty four Hollywood slate has clearly been impacted by the strikes we remain optimistic given the strong indexing were driving on a title by title basis, and a consistently high share of box office, we capture in the post pandemic world.
Natasha Fernandez: This weekend's dune part to offer an excellent example of the differentiating advantage of the IMAX platform.
Natasha Fernandez: The film was shot entirely with IMAX cameras, how will receive a limited run in IMAX.
Richard Lewis Gelfond: 70mm film, further feeding demand for the format in the wake of opposition. Imax earned more than 22.5% of DUNE Part 1's Opening Domestic Week. Our IMAX-exclusive preview screenings just a few days ago on Sunday approached sell-out capacity throughout the United States, and our strong pre-sales indicate that we will dramatically over-index. Pre-sales exceed what we saw with Oppenheimer in the same window pre-launch. I've seen Dune Part 2, and this is a very special film.
Natasha Fernandez: 70 millimeter film further fleet and demand for the format in the wake of Oppenheimer.
Natasha Fernandez: IMAX earn more than 22, 5% of June part ones opening domestic weekend.
Natasha Fernandez: IMAX exclusive preview screenings, just a few days ago on Sunday approached sellout capacity throughout the United States and our strong pre sales indicate that we will dramatically over index pre sales exceed what we saw with Oppenheimer and the same window prelaunch.
Natasha Fernandez: <unk>.
Natasha Fernandez: I've seen due in part to and this is a very special film make no mistake about it. This film has been much anticipated in the past, but it exceeded my expectations look now.
Richard Lewis Gelfond: Make no mistake about it, this film has been much anticipated in the past, but it exceeded my expectations. Look no farther than the Academy Awards to see our broadening impact. Imax releases scored more than 40 nominations, not just for Oppenheimer but for a variety of films across genres, from Killers of the Flower Moon to the Japanese anime hit The Boy and the Heron. Across this year, the slate remains balanced with a consistent offering that will stand out in IMAX, including Godzilla vs. Kong. Furiosa, Deadpool, and Wolverine, A Quiet Place Day One, Joker 2, and Wicked.
Natasha Fernandez: Further than the Academy awards to see our broadening impact IMAX releases scored more than 40 nominations not just for Oppenheimer, but are a variety of films across genres from killer to the flowering moon to the Japanese Japanese anime hit the boy in the Heron across this year.
Natasha Fernandez: There is the slate remains balanced with a consistent offering that will stand out and IMAX, including Godzilla vs. Com theory, ulcer, Deadpool and Wolverine are quiet place day, one Joker to <unk>.
Richard Lewis Gelfond: And this year is just a precursor to a stacked 2025 slate, which includes Avatar 3, several entries from the Retooled Marvel and DC franchises, including Fantastic Four and Captain America, as well as Superman Legacy and the sequel to Batman, and of course, Mission Impossible 8. Our local language strategy also continues to be a powerful growth driver for Imax. In 2023, we smashed our record for local language box office with $227 million in receipts for films across China, India, France, and Japan, as well as Malaysia and Thailand. This year looks very promising as well, particularly in China, where we expect the summer season to be among our best ever.
Natasha Fernandez: And this year is just a precursor to a stacked 2025 slate, which includes avatar three several entries from the retool Marvel and D C franchises, including Fantastic Thor and Captain America, as well as Superman legacy and a sequel to the Batman.
Natasha Fernandez: And of course mission impossible.
Our local language strategy also continues to be a powerful growth driver for IMAX.
Natasha Fernandez: In 2023, we smashed out record for local language box office with $227 million in receipts for films across China, India, France, and Japan, as well as Malaysia and Thailand.
Natasha Fernandez: This year looks very promising as well, particularly in China, where we expect the summer season to be among our best ever.
Richard Lewis Gelfond: Our relaunched Imax Documentaries unit continues to gain steam, and we'll see the release of The Blue Angels in partnership with Amazon Studios and J.J. Abrams' Bad Robot this May. We're also in production with Adam McKay's Stormbound, a film that will put Imax cameras and our fans inside the most powerful hurricanes on the planet. We will continue to grow documentaries as a source of global box office with downstream streaming revenue potential, as well as a strong driver of our brand. We're also building out our portfolio of events and experiences beyond feature and documentary films as a key strategic priority. This strategy has already yielded success in the first quarter, most notably with Queen Rock Montreal, a first-time Imax remastering of a seminal 1981 performance, which delivered the best opening weekend ever for an Imax-exclusive event and has so far grossed about $5.4 million. We also held a one-night-only cinematic listening event for the new release from hip-hop legend Andre 3000.
Natasha Fernandez: Our relaunched IMAX documentaries unit continues to gain steam and we will see the release of the Blue Angels in partnership with Amazon Studios and JJ Abrams Bad robot This may.
Natasha Fernandez: We're also in production with Adama case, Stormbound, a film that will put IMAX cameras and our fans inside the most powerful hurricanes.
Natasha Fernandez: On the planet.
Natasha Fernandez: We'll continue to grow documentaries as a source of global box office with downstream streaming revenue potential as well as a strong driver of our brand. We're also building out our portfolio of events and experiences beyond feature documentary films as a key strategic priority.
Natasha Fernandez: This strategy has already yielded success in the first quarter, most notably with Queen Rock Marciano, a first time IMAX remastering of a seminal 1981 performance.
Natasha Fernandez: Which has delivered the best opening weekend ever for an IMAX exclusive event has so far growth about $5 4 million. We also held a one night only cinematic listening event for the new release from hip hop legend Andre 3000.
Richard Lewis Gelfond: The film, which recorded several sellouts and drove great utilization on an otherwise quiet Tuesday night in January, yielded a fee from the record label, in addition to our standard box office tape, expanding our brand. We also continue to advance our streaming and consumer technology, pushing further into new experiences beyond the cinema. Imax was pleased to be among the launch partners for the Apple Vision Pro.
Natasha Fernandez: The film, which recorded several sellouts and drove great utilization on an otherwise quiet Tuesday night in January yielded a fee from the record label. In addition to our standard box office take.
Natasha Fernandez: Expanding our brand. We also continue to advance our streaming and consumer technology business pushing further into new experiences beyond the cinema.
Natasha Fernandez: IMAX was pleased to be among the launch partners for the Apple vision Pro.
Richard Lewis Gelfond: Our goal is to test and define the Imax experience on this exciting new platform, from user experience to content to monetization to new avenues for innovation, cross-streaming, and playback. But the Imax app also has provided an exciting new application of our enterprise software streams, purpose-built to deliver the clearest picture for less money for streamers like Disney+. We continue to make steady progress building out our streaming consumer technology business. While we don't want to steal a page from every other earnings call in the world, the technology we acquired through our acquisition of SimWave is AI-based. Through that acquisition, we have a team of 40 engineers specializing in machine learning and artificial intelligence. That team is working not only on streaming but broader applications across our business, such as Image Capture and Optimization to Improve Our Internal Systems and Processes.
Natasha Fernandez: Our goal is to test and refine the IMAX experience on this exciting new platform.
Natasha Fernandez: From user experience to content to monetization to new avenues for innovation across streaming and playback.
Natasha Fernandez: But the IMAX App also has provided an exciting new application of our <unk>.
Natasha Fernandez: Enterprise software stream smart purpose built to deliver the clearest picture for less for less.
Natasha Fernandez: Less money for streamers like Disney plus we continue to make steady progress building out our streaming at consumer technology business.
We don't want to steal a page from every other earnings call in the World. The technology, we acquired by our acquisition of Similarly is AI based through that acquisition. We have a team of 40 engineers specializing in machine learning and artificial intelligence that team has worked.
Natasha Fernandez: Not only on streaming but broader applications across our business from average capture and optimization to improving our internal systems and processes to.
Richard Lewis Gelfond: To conclude, 2023 was one of the best years on record for Imax. Our technology continues to power awe-inspiring experiences that bring the entire range of human imagination to life. Consumers want the Imax experience, and we curate one of the most diverse portfolios of experiences from around the world. Consumers are gravitating toward Visceral. You are their documentaries.
Natasha Fernandez: To conclude 2023 was one of the best years on record for IMAX, Our technology continues to power our inspiring experiences that bring the entire range of human imagination to life.
Natasha Fernandez: <unk> want the IMAX experience, how we curate one of the most diverse portfolios of experiences from around the world.
Natasha Fernandez: Consumers are gravitating towards vessel you are there documentaries and we're using our technology to tell stories that immerse audiences and the impossible.
Richard Lewis Gelfond: And we're using our technology to tell stories that immerse audiences in the impossible. Consumers want unforgettable communal experiences, and we continue to open our aperture and expand the definition of the Imax experience from music to gaming to sports. And anyone who has watched the results of the award shows this year can't help but notice the influence of film in Imax for audiences around the world. And this week again, in film in Imax, we open Dune II, for which you have high expectations. As a result, demand for our technology is strong worldwide.
Natasha Fernandez: Tumors, one unforgettable Camino communal experiences and we continue to open our aperture and expand the definition of the IMAX experience from using music gaming to sports and anyone who has watched the results of the award shows this year can help it escape.
Natasha Fernandez: Noticing the influence of filmed in IMAX for audiences around the world and this week again filmed in IMAX, we opened due to which we have high expectations for as a result demand for our technology is strong worldwide. We have already established IMAX as a premier global platform.
Richard Lewis Gelfond: We have already established Imax as a premier global platform, and we see an opportunity to double our footprint. It is a great time to be in the IMAX business, and we look forward to growing our momentum and delivering results for our shareholders. Thank you. And with that, I'll turn it over to Tom.
Natasha Fernandez: And we see an opportunity to double our footprint.
Speaker Change: It's a great time to be in the IMAX business, and we look forward to growing our momentum and delivering results for our shareholders. Thank you and with that I'll turn it over on that task.
Natasha Fernandez: Thanks, Rich, and good afternoon, everyone. As Rich mentioned, Imax delivered a strong performance in full year 2023. We have a business that stands out in the entertainment industry, both for the experience it provides consumers and for our financial model. Let's review our Q4 and year-end results, and then I'll expand on our expectations for 2024 and beyond. Our 2023 results underscore the strength of our model and demand for the Imax. Full year adjusted EPS grew significantly to $0.94 in 2023, up from $0.06 the year prior, with $0.17 coming in Q4. The full-year gross margin of $214 million grew 37% year-over-year, and the gross margin percent of 57% was up 500 basis points year-over-year.
Speaker Change: Thanks, Rich and good afternoon, everyone as rich mentioned IMAX delivered a strong performance in full year 2023, we have a business that stands out in the entertainment industry.
The experience that provides consumers and our financial model.
Speaker Change: Let's review, our Q4 and year end results and then I'll expand on our expectations for 2024 and beyond.
Speaker Change: Our 2023 results underscore the strength of our model and demand for the IMAX experience.
Speaker Change: Full year adjusted EPS grew significantly to 94 and 2023 up from six the year prior with 17 coming in Q4.
Speaker Change: Full year gross margin of $214 million grew 37% year over year and gross margin percent of 57% was up 500 basis points year over year.
Natasha Fernandez: 44 million of that came in Q4 at a gross margin percent of 51%, which was up 100 basis points year over year, as the impact of the lower box office was offset by cost discipline and lower market. Adjusted EBITDA attributable to Imax grew 52% to $128 million for the year, including $23 million in Q4. Full year adjusted EBITDA margin was 37%, up 650 basis points year-over-year, driven by strong revenue growth and operating leverage in our... We grew total revenue 25% year over year in 2023 to $375 million, driven by the expansion of the Imax network and our diversified content portfolio. We did this even with a 12% revenue decline in the fourth quarter due to the impact of the Hollywood strikes on the city.
Speaker Change: $44 million of that came in Q4 at a gross margin percent of 51%, which was up 100 basis points year over year as the impact of the lower box office was offset by cost discipline and lower marketing expense.
Speaker Change: Adjusted EBITDA attributable to IMAX grew 52% to $128 million for the year, including $23 million in Q4.
Speaker Change: Full year adjusted EBITDA margin was 37% up 650 basis points year over year, driven by strong revenue growth and operating leverage in our business.
Speaker Change: We grew total revenue, 25% year over year in 2000 $23 million to $375 million driven by expansion of the IMAX network and our diversified content portfolio, we did that even with a 12% revenue decline in the fourth quarter due to the impact of the Hollywood strike.
Speaker Change: On the slate.
Natasha Fernandez: Our portfolio approach to programming across Hollywood, local language, documentary, and event content allows us to optimize our mix across the year. We continue to post strong global market share, 3.2% of the world's box office in 2023 on less than 1% of the screen's global audience. Our robust revenue growth in 2023 reflects strong performances from all of our segments, led by content solutions up 24% and technology products and services up 22%. We also doubled revenue in all other to $14 million for the full year, driven by our growth in streaming and consumer technology. Within operating expenses, we invest for long-term growth and to exploit our differentiation and Iconogrand. Our R&D expense was $10 million for the full year, of which $2.7 million was in Q4, and it increased $4.8 million for the full year over 22.
Speaker Change: Our portfolio approach to programming across Hollywood local language documentary and event content allows us to optimize our mix across the year.
Speaker Change: We continued to post strong global market share three 2% of the world's box office in 2023 and less than 1% of the screens globally.
Speaker Change: Our robust revenue growth in 2023 reflects strong performances from all of our segments led by content solutions up 24% and technology products and services up 22%.
Speaker Change: We also doubled revenue in all other to $14 million for the full year, driven by our growth in streaming and consumer technology.
Speaker Change: Within operating expenses, we invest for long term growth and to exploit our differentiation and iconic brand R&D expense was $10 million for the full year of which $2 7 million was in Q4 and increased $4 8 million for the full year over 22.
Natasha Fernandez: Reflecting our investments in new technology, including streaming optimization software stream smart, along with continued investment in our core business, SG&A excluding stock-based compensation was $122 million for the full year, of which $29 million was in Q4, and increased $2 million from full year 2022, which excludes one-time transaction costs and the inclusion of SimWave expenses, which were not in most of the prior year given the acquisition closed at the end of Q3 20 As a percentage of revenue, SG&A, excluding stock-based compensation, was 33% in 2023, lower than 37% in 2022, an improvement of approximately 400 basis points, reflecting the leverage in our business model, coupled with the focus on cost discipline, including actions to gain cost efficiencies in areas of our business, including Imax China.
Speaker Change: <unk>, our investments in new technology, including streaming optimization software stream smart along with continued investment in our core business.
Speaker Change: SG&A, excluding stock based compensation was $122 million for the full year of which $29 million was in Q4 and increased $2 million from full year, 2022, which excludes one time transaction costs and the inclusion of <unk> expenses, which were not in most of the prior year given the.
Speaker Change: Position closed at the end of Q3 2022.
Speaker Change: As a percentage of revenue SG&A, excluding stock based compensation was 33% in 2023 lower than the 37% in 2022, an improvement of approximately 400 basis points, reflecting the leverage in our business model, coupled with our focus on cost discipline, including.
Actions to gain cost efficiencies in areas of our business, including IMAX, China, our cost discipline efforts will continue in 2024.
Natasha Fernandez: Our cost discipline efforts will continue in 2024. System installations and signings remain a key driver for our long-term growth. In 2023, we completed 128 system installations, up approximately 40% over 2020. We closed the year strong with 69 installations in Q4, growth of 33% year over year. Installations were weighted to top markets with higher per screen averages, approximately 20% above our network average. Examples include Japan, South Korea, and France, as well as domestic.
Speaker Change: System installations, and signings remains a key driver for our long term growth.
Speaker Change: In 2023, we completed a 128 system installations.
Speaker Change: Approximately 40% over 2022 weeks.
Speaker Change: We closed the year strong with 69 installations in Q4 growth of 33% year over year.
Speaker Change: Installations related to top markets with higher per screen averages approximately 20% above our network average examples include Japan, South Korea, and France as well as domestic.
Natasha Fernandez: This robust installation growth resulted in 4% growth of the Imax commercial network. We signed 129 systems for the full year, more than two and a half times the prior year, and 55 systems were signed and installed in the same year, resulting in immediate network expansion. Asia Pacific was the biggest driver with 34 signings, nearly double our previous high. We delivered record signings in Thailand, Indonesia, and Malaysia, all markets where we've recently expanded into local language content to strengthen our pay. In Japan, we delivered 12 new signings, our best total in the market since 2015. We also saw strong growth in the Americas, highlighted by resurgent activity in Latin America, Mexico, and, most notably, North America.
Speaker Change: This robust installation growth resulted in 4% growth of the IMAX commercial network.
Speaker Change: We signed 129 systems for the full year more than two five times. The prior year and 55 systems were signed and installed in the same year, resulting an immediate network expansion.
Speaker Change: Asia Pacific was the biggest driver with 34 signings nearly double our previous high.
Speaker Change: Delivered record signings in Thailand, Indonesia, and Malaysia, all markets, where we recently expanded into local language content to strengthen our position.
Speaker Change: In Japan, we delivered 12, new signings, our best total in the market since 2015.
Speaker Change: We also saw strong growth in the Americas highlighted by resurgent activity in Latin America, Mexico, and most notably North America.
Natasha Fernandez: Our ability to drive expansion in even our most mature market, 26 signings in total and three new clients, demonstrates the demand for our technology. Our sales momentum continued in the 4th quarter with 35 signings, our best Q4 since 2015. Overall, the robust growth in signings in 2023 is a positive leading indicator for future growth, and with installations and signings relatively equal for the year, we continue to have a substantial committed backlog entering into 2024 of 450 systems, of which 382 are new systems and 68 are upgraded. Our backlog, which historically installs within two to three years, along with the fact that our zones are only 47% penetrated globally, gives us confidence in our ability Turning to cash flow and the balance sheet, operating cash flow for the year was $59 million, or $1.06 per share, representing significant growth versus $17 million for 2022, or $0.30 per share.
Speaker Change: Our ability to drive expansion and even our most mature market 26 signings in total and three new clients demonstrates the demand for our technology. Our sales momentum continued in the fourth quarter with 35 signings our best Q4 since 2015.
Speaker Change: Overall, the robust growth in signings in 2023 is a positive leading indicator for future growth and with installations and signing relatively equal for the year. We continue to have a substantial committed backlog entering into 'twenty 'twenty four 450 systems of which 382 are new systems and <unk>.
Speaker Change: 68 or upgrades.
Speaker Change: Our backlog, which historically installs within two to three years, along with the fact that our zones are only 47% penetrated globally gives us confidence in our ability to expand the IMAX network for years to come.
Speaker Change: Turning to cash flow and the balance sheet operating cash flow for the year was $59 million or $1 <unk> per share representing significant growth versus the $17 million for 2022, or <unk> 30 per share the tripling of our operating cash flow year over year as a result of.
Natasha Fernandez: The tripling of our operating cash flow year-over-year is a result of our higher profits and improved cash conversion. Pre-cash flow before growth capex, defined as investment and joint revenue sharing arrangements, improved by $39 million to $44 million versus $4.5 million in 2022. This is the cash flow measure that best reflects our efficiency and profitability.
Speaker Change: Our higher profits and improved cash conversion free cash flow before growth capex defined as investment in joint revenue sharing arrangements.
Speaker Change: <unk> by 39 million to 44 million versus $4 5 million. In 2022. This is the cash flow measure that best reflects our efficiency and profitability.
Natasha Fernandez: Our capital position remains very strong as we ended the year with $76 million in cash and $257 million of debt, excluding deferred financing. As a reminder, $230 million of our debt comes from our convertible senior notes due in 2026 that bear an interest rate of 0.5% per annum, with a capped call leading to a $37 per share conversion. Our current available liquidity is approximately $407 million, which includes $331 million in available drilling capacity under the company's various revolving facilities.
Speaker Change: Our capital position remains very strong as we ended the year with $76 million in cash and $257 million of debt, excluding deferred financing costs. As a reminder, $230 million of our debt comes from our convertible senior notes due in 2026 that bear an interest rate of <unk>, 5% per annum.
Speaker Change: With a capped call leading to a $37 per share conversion price.
Speaker Change: Our current available liquidity is approximately $407 million, which includes 331 million in available borrowing capacity under the company's various revolving facilities.
Natasha Fernandez: From a capital allocation perspective, these last few months, we have been aggressive in repurchasing our shares as we believe they are significantly undervalued. In 2023, although we were in a blackout period for a significant portion of the year, we repurchased $26 million worth of shares, with $24 million of that coming in Q4. Today, in 2024, we have repurchased an additional $16 million worth of our shares, and we have $151 million remaining available under our share repurchase authorization.
Speaker Change: From a capital allocation perspective. These last few months, we have been aggressive in repurchasing our shares as we believe there are significantly undervalued.
Speaker Change: In 2023, although we were in a blackout period for a significant portion of the year, we repurchased $26 million worth of shares was $24 million of that coming in Q4.
Speaker Change: To date in 2024, we have repurchased an additional $16 million worth of our shares and we have $151 million remaining available under our share repurchase authorization.
Natasha Fernandez: On the back of a strong 2023 and the signings and installations momentum we carried into the year, we look forward to continued growth and progress in 2024. Our guidance for the year includes a higher level of system installations compared to 2023 in the range of 120 to 150 systems, which is wider to reflect China's reopening and continued recovery, and box office at a similar level to 2023 driven by growth in local language and event box offices. We expect the total Consolidated Adjusted EBITDA Margin to be consistent with 2023 and in the high 30s%. This guidance is at the consolidated level as opposed to the attributable level.
Speaker Change: On the back of a strong 2023, and the signings and installations momentum we carried into the year. We look forward to continued growth and progress in 2020 for our guidance for the year include.
Speaker Change: A higher level of system installations compared to 2023 in the range of 120 to 150 systems, which is wider to reflect China's reopening and continued recovery.
Speaker Change: Box office at a similar level to 2023, driven by growth in local language and event box office.
Total consolidated adjusted EBITDA margin, we expect to be consistent with 2023 and in the high 30%. This guidance is at the consolidated level as opposed to the attributable level in 2024, we will focus our discussions at the total adjusted EBIT level to reflect the results of our fully consolidated business consists of.
Natasha Fernandez: In 2024, we will focus our discussions at the Total Adjusted EBITDA level to reflect the results of our fully consolidated business, consistent with how we discuss revenue, gross profit, and most other financial measures. We believe this is more in line with peer reporting and simplifies modeling for the. For context, in 2023, our total consolidated adjusted EBITDA was $144 million at a 38.4% margin versus the attributable adjusted EBITDA of $128 million at a 36.7% margin. While we are not formally guiding to 2025, we believe it is important to provide investors a normalized view of our business and financial model, absent a strike or COVID impact. Looking to 2025, we expect revenue growth of at least high single digits, driven by accelerating Imax box office and mid single digit network growth, which will result in steady adjusted EBITDA margin expansion. We target the total consolidated adjusted EBITDA margin to be approximately 40% by 2025, driven by the strong incrementality in our model as we scale.
Speaker Change: To how we would discuss revenue gross profit and most other financial metrics. We believe this is more in line with peer reporting and simplifies modelling for the street.
Speaker Change: For context in 2023, our total consolidated adjusted EBITDA was $144 million at a 38, 4% margin versus the attributable adjusted EBITDA of $128 million at a 36, 7% margin.
Speaker Change: While we are not formally guiding to 2025, we believe it is important to provide investors a normalized view of our business and financial model absent strike or Covid impact.
Speaker Change: Looking to 2025, we expect revenue growth of at least high single digits, driven by accelerating IMAX box office and mid single digit network growth, which will result in steady adjusted EBITDA margin expansion, we target total consolidated adjusted EBITDA margin to be approximately 40% by 2000.
Speaker Change: <unk> 25, driven by the strong incrementals in our model as we scale to conclude.
Natasha Fernandez: 2023 was a year of robust growth for Imax, with strong financial results driven by accelerated signings and installations and a number of box office milestones. We see significant potential to build on our momentum in 2024 and beyond. Similarly, with consumers, genres of films come and go.
Speaker Change: 23 was a year of robust growth for IMAX with strong financial results driven by accelerated signings and installations and a number of box office milestone.
Speaker Change: See significant potential to build on our momentum in 2024 and beyond with consumers genres of films come and go we transcend genre, which makes IMAX the preferred platform for a growing array of on firing experiences.
Operator: Transcending genre, which makes Imax the preferred platform for a growing array of awe-inspiring experiences. Demand for the Imax experience among audiences worldwide is high. Studios, exhibitors, filmmakers, and artists recognize the value of our premium technology platform and our unrivaled global scale. This fuels new system sales and our expansion into streaming and consumer technology. And as we grow our scale, our asset-light, highly incremental business model is delivering expanding margins, bottom-line profit growth, and robust cash flow generation. Thank you. And with that, I will turn the call over to the operator for Q&A. Thank you. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone. To withdraw your question, please press star 1-1 again.
Speaker Change: Demand for the IMAX experience among audiences worldwide is high studios exhibitors filmmakers and artist recognize the value of our premium technology platform and our unrivaled global scale. This fields, new system sales and our expansion into streaming in consumer technology and.
Speaker Change: As we grow our scale our asset light highly incremental business model is delivering expanding margins bottom line profit growth and robust cash flow generation.
Speaker Change: And with that I will turn the call over to the operator for Q&A.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: As a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again, please wait for your name to be announced we ask that you. Please ask only one question. Please standby, while we compile the Q&A roster one moment for your first question.
Operator: Please wait for your name to be announced. We ask that you please ask only one question. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from the line of Eric Handler with Roth MKM. Your line is now open. Good afternoon.
Speaker Change: Our first question comes from the line of Eric Handler with Roth MK and your line is now open.
Eric Handler: Good afternoon, and thanks for the question Richard I'm wondering if you could if you are able to dissect.
Eric Handler: Thanks for the question. Rich, I wonder if you could, if you're able to dissect the global box office view for this year, obviously very, always very difficult to project, but, you know, I'm just curious how you're thinking about Hollywood versus local language content and, you know, maybe alternative content as well. So, Eric, during the first two months of this year, when the kind of hangover from the strike existed, you know, I think there wasn't a lot of visibility.
Eric Handler: The global box office view for this year.
Obviously, very always very difficult to project, but I'm, just curious how youre thinking about Hollywood versus local language content and maybe alternative content as well.
Speaker Change: So Eric.
Speaker Change: The first two months of this year when kind of a hangover from the strike existed.
Eric Handler: I think there wasn't a lot of visibility and I think there was frankly, a lot of external negative at some but as like right at the starting gate now of the year turning around.
Richard Lewis Gelfond: And I think there was, frankly, a lot of external negativism. But as we're, like, right at the starting gate now for the year turning around, you know, I feel very good about it. I mean, as I go through the year, and I'm not going to mention everything, just a number of things. But, as I mentioned in the remarks, Dune Part 2 was better than I thought. And I had high expectations for it. I liked it better than Dune 1.
Eric Handler: Feel very good about it I mean as I go through the year and I'm not going to mentioned everything just a number of things.
Eric Handler: But as I mentioned in the remarks.
Speaker Change: Part two.
Speaker Change: Was better than I thought and I had high expectations for it I liked it better than doing one I think it's a great story visually spectacular after seeing it I don't understand how you can see it in IMAX, it's like a made for IMAX kind of movie.
Richard Lewis Gelfond: I think it's a great story visually. It's spectacular. After seeing it, I don't understand how you can't see it in IMAX.
Richard Lewis Gelfond: It's like a made-for-IMAX kind of movie, and I'm not alone in thinking that. Just this past Sunday, we had an IMAX-only screening of one show a day throughout our North American network, and it was virtually sold out with very little publicity. Going around it, the pre-sales are better than they were for Oppenheimer at the same time. So I'm extremely optimistic about that. I think the narrative that prevailed during the first two months of this year was, "Are people coming back to the movies?" And I can tell you the answer is yes. And IMAX, there's very little question about that. Then you go throughout the year. I have not seen it, but I've talked to some people who have seen Godzilla Kong.
Speaker Change: I am not alone in thinking that and.
Speaker Change: Just this past Monday Sunday sorry.
Speaker Change: Had an IMAX only screening one show a day throughout our North American network and it was virtually sold out with very little publicity going around it. The pre sales are better than they were for Oppenheimer at the same time, so I'm extremely optimistic about that.
Speaker Change: And I think the narrative that prevailed during the first two months of this year, where are people coming back to the movies and I can tell you. The answer is yes, and IMAX has very little Cliff's question about that then you go throughout the year.
Speaker Change: I have not seen it but I've talked to some people close <unk> got silicon and I feel very good about that and again you don't have to be a genius to think con Godzilla IMAX global.
Richard Lewis Gelfond: And I feel very good about that. And again, you don't have to be a genius to think Kong, Godzilla, IMAX, global. I think that'll perform very well. Deadpool was the most watched trailer, as you know, and there's a lot of positive sentiment going on around that movie. The Joker with Lady Gaga is highly anticipated.
Speaker Change: I think theres going to be I think that will perform very well Deadpool was the most watched trailer as you know and there's a lot of positive sentiment going on around that movie the Joker with Lady Gaga is highly anticipated.
Richard Lewis Gelfond: Wicked later in the year. Furiosa, I think, has also gotten a lot of positive buzz. I just feel much better than I did a few months ago. Now that these projects are coming into focus, and people are looking at them, and I'm just giving you the top of the trees, there are a lot of other things, Gladiator 2, a lot of other things. So that's on the Hollywood side, on the foreign language side. We've been, you know, we just had a few releases; most of our releases are scheduled for later in the year, but particularly in China, the Chinese summer is looking very strong, and movies like Nezha 2 and a number of other movies which have very strong fan bases are coming up, and I think we're going to have a big summer in China. We're working And we've recently internally coined the term DocuBuster, which is like a documentary blockbuster. And we have Blue Angels coming out with Amazon in May, and I've seen kind of a final cut of it. And I think it's spectacular. It was shot by the crew that shot Top Gun Maverick, and Glenn Powell is involved, J.J. Abrams, and Bad Robot.
Speaker Change: Wicked later in the year <unk> I think has also gotten a lot of positive buzz.
Speaker Change: Feel much better than I felt a few months ago now that these projects are coming into focus and people are looking at them and I am just giving you the top of the tree is there's a lot of other things.
Speaker Change: You too.
A lot a lot of.
Speaker Change: Lot of other things.
Speaker Change: So that's on the on the Hollywood side on the foreign language side.
Speaker Change: Yes, we just had a few releases most of our releases scheduled for later in the year, but particularly in China. The China Summer is looking very strong in movies like <unk>, two and a number of other movies, which.
Speaker Change: Very strong fan basis.
Speaker Change: <unk> up and I think we're going to have a big summer in China.
Speaker Change: Working on filling it out with India Korea, and a couple of new territories and I think we'll have more movies than we had last year.
Speaker Change: We have recently internally coined the term Doc you Buster, which is like a documentary blockbuster and we have blue Angels coming out with Amazon and.
Speaker Change: In may and I've seen kind of a final cut of it and I think it's spectacular was shot by the crew that shot top gun Maverick.
Speaker Change: Glenn Pals involved J J Abrams bad robot, we have two or three other docs in production, including one about.
Richard Lewis Gelfond: We have two or three other docs in production, including one about, you know, being in the middle of storms, which fits right in with the Imax narrative with Adam McKay and a number of other things. And then alternative content, as I mentioned, Queen killed it. I think it was our number one ever, like the original re-release.
Speaker Change: Being in the middle of storms.
Speaker Change: That's right off the IMAX narrative with Adam a K a.
Speaker Change: Number of other things and then alternative content as I mentioned Queen.
Speaker Change: <unk> I think it was our number one ever like original release, it's a 40 year old movie and we did about $5 $5 million.
Richard Lewis Gelfond: It's a 40-year-old movie, and we did about five and a half million dollars. And I think there are still some more runs to go for it. And, as we mentioned, Andre 3000.
Speaker Change: And I think there's still some more runs to go forward and as we mentioned Andre 3000, I think theres a number of other of original.
Richard Lewis Gelfond: I think there's a number of other original kinds of alternative content that we're coming up with. And, you know, Taylor Swift opened in China in January, and that did pretty good numbers. So overall, I mean, you know, I think 25 is a dream year, but I think 24 is going to be a much stronger year than people anticipated. Thank you. Thank you. One moment for our next question, please. The next question comes from the line of Eric Wold with B-Rally Securities. Your line is now open. Thank you. Good afternoon, everybody.
Speaker Change: Im kind of alternative content content that we're coming up with and.
Speaker Change: Taylor Swift opened in China in January and that did pretty good numbers. So overall.
Speaker Change: I think 25 is a dream here, but I think 24 is going to be a much stronger year than people anticipated.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: One moment for our next question please.
Speaker Change: Our next question comes from the line of Eric Wold with B Riley Securities. Your line is now open.
Eric Wold: Thank you and good afternoon everybody.
Eric Wold: Rich, I'd love to kind of get your thoughts as you go from... You know, the 1800 or so screens globally now to the potential tan of 3600. Would you expect the kind of global share of IMAX box office to kind of, you know, double-ish in line with that growth in systems? Or would it potentially get stronger than a doubling given that you're going into more productive PSA markets? Just trying to get a sense of what you think the linearity of margin and profitability looks like as you kind of move toward that TAM in the coming years. It's a complex question, Eric, and a good one.
Eric Wold: Rich it looks like.
Eric Wold: I guess anyone can chime in and let's get your thoughts as you as you go from here.
Eric Wold: The 800, or so screens globally now to the potential Tam 3600.
Eric Wold: Would you expect the kind of the global share of IMAX box office to kind of.
Eric Wold: Double ish in line with the growth in systems would potentially.
Eric Wold: Stronger than a doubling given that youre going into more productive PSA markets, just trying to get a sense of what you think the linearity of margins and profitability. It looks like as you move towards that channel, but a couple of years.
Speaker Change: It's a complex question, Eric and a good one I think if you look at 'twenty, three our signings which were.
Richard Lewis Gelfond: I think if you look at 23, our signings, which were, you know, quite good during the year, 80% of them were new theaters. The territories we did them in, many of them were in high PSA areas like Japan and North America. A bunch of them opened up in Mexico with Cinemex, and they've performed extremely well. Of the ones that have opened in Japan, those are also very good.
Speaker Change: Quite good during the year, 80% of them were new theaters.
Speaker Change: Territory as we did them in many of them were in high PSA areas like Japan, and North America, a bunch of them opened up in Mexico, with Cinemax and they've performed extremely well.
Speaker Change: The ones that have opened in Japan. Those are also very good. So the short term indication is pretty good I think.
Richard Lewis Gelfond: So the short-term indication is pretty good. I think, you know, when we increase the numbers, they did not increase proportionally in China the way they did in the rest of the world. And, you know, China's a pretty screened market. So I don't think you'll see, like, if we forecast the doubling, I don't think China's going to double. The growth in that market is slower. So I think the growth in the more traditionally established markets will be better than it will be in some developing markets. Again, though, you know, I hesitate to have a conclusion because there are so many variables going on, Eric. You know, obviously, there's all this new kind of content we're putting in. You know, this is not the call to get into detail, but changes in the macro world, like in foreign language films, the cost of versioning, the cost of special effects because of AI and other things.
Speaker Change: We increased the numbers.
Speaker Change: Did not increase proportionately in China the way they did in the rest of the World and China is a pretty screened market. So I don't think youll see.
Speaker Change: Forecast the Dublin, I don't think China is going to double the growth in that market is slower. So I think the growth and the more traditionally established markets will be better than it will be and kind of the developing markets again, though I hesitate to ever conclusion, because there's so many variables going.
Speaker Change: Eric Obviously theres all this new kind of content, we're putting in.
Speaker Change: This is not the call to get into detail, but changes in the macro world I can foreign language film. The Corsa version in the cost of special effects because of AI and other things I think it's very hard to put the calculation that way, but I do think that the growth in our <unk>.
Richard Lewis Gelfond: I think it's very hard to put the calculation that way. But I do think that the growth in our theater network should be in territories that are at least as good as where our network lies today. That's helpful. Thanks, Rich. Thank you. One moment for our next question. Our next question comes from the line of Omar Amihas with Wells Fargo. Your line is now open.
Speaker Change: At our network should be in territories that are at least as good as where our network lies today.
Speaker Change: Yeah.
Speaker Change: That's helpful. Thanks George.
Speaker Change: Thank you.
Speaker Change: For next question.
Speaker Change: Our next question comes from the line of Omar <unk>.
Omar: With Wells Fargo. Your line is now open.
Omar Amihas: Thanks for the question, guys. May, if we can expand a little bit, I know you talked about China, you got to expect a very strong summer in China. We saw a solid recovery last year versus 2022 when things were shut down. What do you think is the recovery in China and how do you feel about the opportunity there for growth in 2024 and into 2025? Maybe just give us a state of the unit address on how you feel about the China prospects going forward? Thanks.
Okay.
Omar: Thanks for the question guys.
Omar: Maybe could you expand a little bit I know you talked about the China you got to expect a very strong summer in China, we saw.
Omar: Recovery last year slightly do when things were shut down what is the recovery in China and how do you feel about the opportunity there to grow in 'twenty four 'twenty five maybe just give us like a state of the union address on how.
Omar: How do you feel about the China prospects going forward.
Richard Lewis Gelfond: Yeah, sure. Sure. I'm happy to do that. So, you know, it will be a surprise to many people, but the movie industry in China, in general, did pretty well in 23 and our box office was around 300 million, which is up significantly from any time during the pandemic. And as you said, you know, it really didn't open until January, and it wasn't fully open throughout the year.
Speaker Change: Yes, sure sure Omar happy to do that so.
Speaker Change: It will be a surprise to many people but.
Speaker Change: The movie industry in China in General did pretty well in 23 at our box office was around $300 million, which is up significantly than any time during the pandemic and as you said really didnt open until January and it wasn't fully opened throughout the year. So.
Richard Lewis Gelfond: So I have a pretty positive outlook over the next couple of years. The macro trends appear good, and movies are still an economically affordable luxury, and Imax, particularly, is even at a premium price point has done very well. Our indexing is very strong.
Speaker Change: A pretty positive outlook over the next couple of years.
Speaker Change: Yes.
Speaker Change: The macro trends appear good.
Speaker Change: Movies are still economically affordable luxury in IMAX, particularly.
Speaker Change: Even.
Speaker Change: At a premium price point has done very well our indexing is very strong. So I think with China. The question is just how quickly does it continue to approach normal.
Richard Lewis Gelfond: So I think with China, the question is just how quickly does it continue to approach normal and what does the backlog slate look like both for domestic films and for Hollywood-imported films and other imported films? It's part of my nature, Omar, and I believe, and Natasha could jump in, but I believe we budgeted China this year to be better than it was in 2023. So looking into the future, we feel pretty good about it, but there are still a few variables that have to sort themselves out. But we appreciate it. Thank you, guys.
Speaker Change: What is the backlog slate look like both for domestic films and for Hollywood imported films and other imported films.
It's part of my nature Omar.
Speaker Change: I believe in Natasha could jump in but I believe we budget in China. This year to be better than it was in 2023, so looking into the future we feel pretty good about it but there is still a few variables that have to sort themselves out.
Speaker Change: Well I appreciate it thank you guys.
Richard Lewis Gelfond: Thank you. One moment for our next question. Our next question comes from the line of Steven Frankel with Rosenblatt Securities. Your line is now open. Good afternoon, Rich.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Steven Frankel with Rosenblatt Securities. Your line is now open.
Steven Frankel: So you caught me a little off guard with the progress in Latin America. That was a territory that always seemed like it would be good for IMAX, and there were a bunch of reasons why it never scaled up. So maybe give us some insight into what's changed and how meaningful of a territory can that be?
Steven Frankel: Good afternoon, Rich. So you caught me a little off guard with the Latin America progress that with the territory, but it always seems like it would be good for IMAX and <unk>.
Steven Frankel: There were a bunch of reasons why it never scaled up so maybe you can give us some insight into <unk>.
Steven Frankel: What's changed and how meaningful of a territory can that be for you.
Richard Lewis Gelfond: So to be clear, I don't think much has changed yet, Steve. I think we're looking prospectively at what might change. And one of the biggest obstacles to us in South America has been very high tariffs. So whatever you charge in North America, it's approximately double because of the tariffs in the territory.
Speaker Change: So to be clear I don't think much has changed yet Steve I think were looking prospectively, what might change and one of the biggest obstacles to us in South America has been very high tariffs. So whatever you charge in North America, it's approximately double because of the <unk>.
Steven Frankel: Chris in the territory and we made some progress.
Richard Lewis Gelfond: And we made some progress, you know, but to be clear, mostly from a modeling internal point of view on ways that we could do things differently to mitigate some of those tariff costs. And I think that's given us some hope and expectation of better business there. The other thing I would say, if you look at the per screen averages in LATAM, they've been really quite good. I mean, you know, much better than one would anticipate from the outside.
Steven Frankel: But to be clear, mostly from a modeling internal point of view on ways that we could do things.
Steven Frankel: Differently to mitigate some of those tariff costs and I think that's given us some.
Steven Frankel: <unk>, an expectation of better business there. The other thing I would say if you look at the per screen averages in Latam they've been really quite good I mean, much better than one would anticipate plenty outside and I'd say the third thing is maybe from a relationship point of view, we made progress with certain of our.
Richard Lewis Gelfond: And I'd say the third thing is, maybe from a relationship point of view, we made progress with certain of our pre-existing relationships over there. So I think if you put those three things together, it makes us more optimistic. But I don't want you to think that it's a done deal and, you know, we're predicting a breakout in LATAM this year. I think it's trending in the right direction. And then one more China question, you know, with a bit of anomaly this year that your box office results for the Lunar New Year weren't very exciting. Was that just a function of what movies were available during that window, or was there something else going on during that holiday period?
Steven Frankel: Preexisting relationships over there. So I think if you put those string three things together it makes us more optimistic but I don't want you to think that that's a done deal.
Steven Frankel: We're predicting a breakout in Latam this year I think it's trending in the right direction.
Speaker Change: Okay, and then one more China question.
Speaker Change: A bit of anomaly this year that your box office results for the lunar new year worked very exciting.
Speaker Change: That just a function of what movies were available during that window or was there something else that went on during that holiday period.
Richard Lewis Gelfond: You know, when you say not very exciting, I mean, our best year ever was last year when we did 33, and we did 28 this year, so, you know, I don't think it's necessarily a trend. You know, it's kind of in the range of rounding errors, but last year we had Wandering Earth 2, which was the biggest local language movie of all time in China and sci-fi, and very much in our sweet spot, and this year it was more a mixture of genres, so I think I would say we performed sort of like a typical Chinese New Year without the boost from that film.
Speaker Change: Yes, when you say not very exciting I mean, our best year ever was last year, when we get 33 <unk>.
Speaker Change: 28 this year so.
Speaker Change: Thanks.
Speaker Change: Its necessarily a trend it's kind of in the range of rounding errors, but last year, we had wandering earth too which is the biggest local language movie of all time in China, and SIFI and very much in our sweet spot and this year. It was more a mixture of genres. So I think I would say we performed.
Speaker Change: Like a typical Chinese new year without the boost from that film.
Richard Lewis Gelfond: And also, like I said about the summer, Steve, a lot of the movies that we would have liked to have seen during Chinese New Year are coming out this summer. So I think we'll make up for a lot of that over the summer. That's very helpful, thank you.
Speaker Change: And also I would add like I said about the summer Steve a lot of the movies that we would have liked to have seen and Chinese new year coming out. This summer. So I think we'll make up for a lot of that over the summer.
Speaker Change: That's very helpful. Thank you.
Mike Hickey: Thank you. One moment for our next question. Our next question comes from the line of Mike Hickey with the Benchmark Company. Your line is now open. Hey Rich, Natasha, Jennifer, congrats guys. Just curious, I guess, to start, does it is pretty amazing, especially Dan Boyd, and others.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Mike Hickey with Digman Smart Company. Your line is now open.
Mike Hickey: Hey, rich Natasha Jennifer Congrats guys on a great 2023, and thanks for taking our questions. Just curious just to start on rich you mentioned.
Mike Hickey: 25 slate in it does.
Pretty amazing, especially when you look at the amount of that sort.
Mike Hickey: Stan Boy Blockbusters that you do so great with at least domestically in China. Other region. So just curious if that slate.
Richard Lewis Gelfond: I am curious about that slate. www.globalonenessproject.org and Ian Pryor. Spike, and imagine now we've got your view there, and then on the installations, 120 to one. H.J.V.
Mike Hickey: Any influence I guess on your current signings or installations or if you think it will I mean, it seems like historically before big films, you would see a little spike and imagine now we've got a full year of great films to you.
Mike Hickey: A corresponding spike signings installs I'm just curious here.
Mike Hickey: Your view there and then.
Mike Hickey: On the installations 120 to $1 50, just just curious to Pasha.
Mike Hickey: Sort of mix there between sales JV hybrid somewhere too.
Richard Lewis Gelfond: Imax Corp., and others are all at etns.org. Thank you. Well, certainly, you know, our sales team, when they go out there, will, you know, prominently play the 24th slate and the 25th slate. And I think the extent to which we've locked in movies so far in advance is much greater than it's historically been. So I would hope and think that, you know, that would help drive installs and signings this year. And, you know, a number of the films for 25, it's not just films in the summer. There were some films early in the year that were pretty good.
Mike Hickey: What you had in 'twenty, three and if we should expect.
Mike Hickey: The quarterly phasing of those installations and 24 similar to 'twenty three thanks guys.
Speaker Change: Well certainly.
Speaker Change: Our sales team when they go out there will.
Speaker Change: <unk> play the 24, it's late in the 25 slate and I think the extent to which we have locked in movies. So far in advance is a much greater than it has historically been so I would hope and think that that would help drive installs and signings this year.
Speaker Change: A number of the films.
Speaker Change: For 25.
Speaker Change: Just films.
Speaker Change: The summer there was some films earlier in the year pretty good. So we just had our internal sales meeting and certainly that will be our approach and that would be our hope and expectation I guess historically, that's been true, but it's so early in the year I think we'll get out to wait a little bit to see whether there.
Richard Lewis Gelfond: So we just had our internal sales meeting. And certainly, that will be our approach. And that would be our hope and expectation. And I guess historically, that's been true.
Natasha Fernandez: But it's so early in the year, I think we're going to have to wait a little bit to see whether that plays out that way. And I'll turn it over to Natasha for your other questions. Hi Mike, on the sales cadence, on the installation cadence for the 120 to 150 systems, we think the cadence for installations will be similar to last year, Q4 heavily weighted, very similar, it's our standard historical type of model, and a similar mix to last year between JVs and sales deals.
Speaker Change: That plays out that way at all.
Speaker Change: I'll turn it over to Natasha for your other question Hi, Mike on the sales cadence.
Natasha Fernandez: Relation cadence for the 120 to 150 systems, we think the cadence for installations will be similar to last year Q4 heavily weighted very similar its our.
Natasha Fernandez: Standard historical type of model and.
Natasha Fernandez: And as well similar mix to last year between GBS and sales deals as well.
Mike Hickey: Thanks, guys. Thank you. One moment for our next question. Our next question comes from the line of Stephen Lasek with Goldman Sachs. Your line is now open.
Natasha Fernandez: Thanks, guys. Good luck.
Speaker Change: Thank you one moment for our next question. Please.
Speaker Change: Our next question comes from the line of Steven Analgesic with Goldman Sachs. Your line is now open.
Stephen C. Davidson: Great, thanks for the question on capital allocation. Maybe for Natasha, on the back of the rampant share repurchases over the last few quarters, I was hoping you could comment just a little bit on the pace of forward buybacks going forward. How reoccurring could we expect this to be? How sensitive might it be to share repurchases or to share price, excuse me.
Steven Frankel: Great. Thanks for the question on capital allocation, maybe for Natasha on the back of the ramp in share repurchases over the last two quarters I was hoping you could comment just a little bit on the pace of forward buybacks going forward, how reoccurring could we expect this to be our sensitive might it be that the share repurchases sort of share price excuse me.
Natasha Fernandez: And then, perhaps more broadly, how you're thinking about balancing capital returns with maintaining balance sheet optionality for any potential future M&A. Thank you.
Natasha Fernandez: Then maybe perhaps more broadly how you are thinking about balancing capital returns with maintaining balance sheet optionality.
For any potential future M&A. Thank you.
Natasha Fernandez: Yeah, we've done a great amount of share repurchases over the past year, and particularly in the last quarter and into this year. I mean, we've already repurchased over $16 million in this just year to date so far. And, you know, as we've always said with our capital allocation, when there's an opportunity for us to repurchase, obviously, in conjunction with our board and buyback committees, we will be in the market repurchasing at the right levels. And, you know, we have a healthy liquidity position, as you know, and a strong balance sheet to be able to support that. And so we have lots of opportunity. And, you know, as we're starting to look at our model, and you would have heard it in my prepared remarks, we're thinking about, you know, how do we start to allocate from free cash flow, excluding growth capex?
Natasha Fernandez: Hi, Steven Yeah, we've done.
Natasha Fernandez: A great amount of share repurchases over the past year, and it's particularly in the last quarter and into this year I mean, we've already repurchased over 16 million.
Natasha Fernandez: And this just year to date, so far and.
Natasha Fernandez: As we've always said what are our capital allocation when there is an opportunity for us to repurchase.
Natasha Fernandez: Obviously with in conjunction with our board and buyback committees, we will we will be in the market repurchasing at the right levels.
Natasha Fernandez:
Natasha Fernandez: We have a healthy liquidity position as easy as you know and a strong balance sheet to be able to support that.
Natasha Fernandez: And so we have lots of opportunity and you know as we are.
Natasha Fernandez: Turning to look at our model and you would have heard it in my prepared remarks, we're thinking about how.
Natasha Fernandez: How do we start to allocate from a free cash flow excluding growth capex, because really we want to continue to grow the network and as rich mentioned, particularly in the regions, where there are high performing screens and so you're a JV model in those regions that will give us greater return.
Natasha Fernandez: Because, really, we want to continue to grow the network, and as Rich mentioned, particularly in the regions where there are high-performing screens, and so if we do a JV model in those regions, that'll give us a greater return. And so we are being thoughtful about the way that we are allocating capital with respect to JVs. But our free cash flow, excluding growth capex, is around 30%. And really, when you think about the targets of that, back in an average of 2018-2019, we were closer to 50%. So that would be where we'd continue to move towards and see the opportunity grow over time. Great, thank you for that color!
Natasha Fernandez: And so we are being thoughtful about the way that we are allocating capital with respect to JV, but our free cash flow excluding growth capex is around 30%.
Natasha Fernandez: Really when you think about the targets of that backend an average of 2018 2019, we were closer to 50% so that would be where we'd continue to move towards and see the opportunity growing overtime.
Natasha Fernandez: Thank you. One moment for our next question. Imax Corp. The next question comes from the line of Jim Goss with Barrington Research. The line is... All right, thank you. I'd like to pursue a little more of the subject Eric Wold raised with the 47% penetration and the nearly 2000 more screens that you could add. I'm wondering what the limiting factors you would think would be in terms of accelerating that penetration.
Speaker Change: Great. Thank you for that color.
Speaker Change: Thank you one moment for our next question. Please.
Speaker Change: Okay.
Our next question comes from the line of Jim Goss.
James Charles Goss: Clinton Research your line is now open.
James Charles Goss: Alright, thank you.
James Charles Goss: I'd like to pursue a little more.
James Charles Goss: The subject, Eric Wold raised with the 47% penetration in the nearly 2000 more screens that you could add I'm wondering what the limiting factors.
James Charles Goss: You would think would be in terms of accelerating the penetration.
James Charles Goss: Would it be management, infrastructure, market development considerations, or even capital, though you could shift to more joint venture options? You know, because that would be a good driver of the of Equity Values. So, Jim, as you know, our signings level between 22 and 23 virtually tripled, so, I mean, that's pretty good sign of consumer demand there. I'm in L.A. for about a month right now, and I've been meeting with leading filmmakers and studios and whatnot, and, you know, a lot of the feedback I've gotten is in a world after Oppenheimer, and as I mentioned in my remarks, films that Imax was involved with got 40 nominations, and then we're going into a world in the next week, the next few days with Dune, which is 100% filmed in Imax, and the feedback I'm getting is if you want to launch a blockbuster, you need Imax to be part of it, and this is not just from, you know, low-level filmmakers.
Clinton: Would it be a management infrastructure market development considerations or even capital, though you could shift to more.
Alright venture.
Clinton: Options.
Clinton: Because that would be a good driver of the.
Clinton: Equity values.
Speaker Change: So Jim as you know our signings level between 'twenty, two and 'twenty three virtually tripled so I mean, thats pretty good sign of consumer demand there.
Speaker Change: I'm in the L. A.
Speaker Change: For about a month right now and I've been meeting with leading filmmakers and studios and whatnot and a lot of the feedback I've gotten is in a world after Oppenheimer and as I mentioned in my remarks films that IMAX is involved with cut 40 nominations and then we're going into our world.
Speaker Change: And the next week. The next few days with June which was a 100% filmed in IMAX and the feedback I'm getting is if you want to launch a blockbuster.
Speaker Change: Need IMAX to be part of it and this is not just from low level filmmakers. This is from.
James Charles Goss: This is from senior studio executives. You know, the groundwork has really been laid where Imax needs to be part of these releases, and I think you look at the sales in 23, and I think Exhibition, our partners there, is really starting to understand that, and I think you'll see the indexing, and you'll see the box office on Dune, and you'll see it on Deadpool, which also, you know, has Imax DNA on it, and as that continues, I would Remember, you know, it's disappointing to all of us that within five minutes of something happening, the world doesn't change, but it takes a little longer than that, and I just can't go to a meeting in this town without people understanding what that means. So, you know, I think you'll see that there are no internal constraints. As you know, Jim, we can, you know, install as many as we need to as long as we have sufficient lead time. We could manufacture whatever we need to.
Speaker Change: Studio senior studio executives.
Speaker Change: The groundwork has really been laid where IMAX needs to be part of these releases and I think you look at the sales in 'twenty three I think exhibition.
Speaker Change: Our partners there is really starting to understand that and I think youll see the indexing and Youll see the box office on June and Youll see it on Deadpool, which has also has IMAX DNA on it and as that continues I would expect it to drive significant sales growth and I think we'll start to see that.
Speaker Change: Remember.
Speaker Change: It's disappointing to all of us that within five minutes of something happening in the world doesn't change, but it takes a little longer than that and I just can't go to a meeting in this town without people understanding.
Speaker Change: What that means so I.
Speaker Change: I think youll see it there are no internal constraints as you know Jim.
Speaker Change: We can.
Speaker Change: Stall as many as we need to as much as as long as we have sufficient lead time, we could manufacture whatever we need to we could design whatever we need to and I think we're.
Richard Lewis Gelfond: We could design whatever we need to, and I think, you know, we're well-positioned to have a good signing. All right, thanks very much. Thank you. One moment for our next question. Our next question comes from the line of Chad Beynon with Macquarie. Your line is now open. Hey, good afternoon. This is Aaron Andrew Chad.
Speaker Change: Well positioned to have a good signings pace.
Speaker Change: Alright, thanks very much.
Speaker Change: Thank you one moment from next question.
Speaker Change: Yeah.
Speaker Change: Our next question comes from the line of Chad Beynon with Macquarie. Your line is now open.
Speaker Change: Hey, good afternoon. This is Aaron on for Chad Thanks for taking our question.
Chad Beynon: Thanks for taking our, So you mentioned the recent Queen concert film, which you know obviously builds upon the great success of Taylor Swift last year. As you do more of these events, are there any learnings or takeaways that you can roll forward? and any more color just on how you're approaching building the pipeline for more. Yeah, I think there are a number of learnings. I think, remember, the Taylor Swift concert was extremely successful, but it was not just released in IMAX; it was released more broadly.
Aaron: So you mentioned the recent Queen concert film, which obviously built upon great success from Taylor Swift last year as you do more of these events are there any learnings or takeaways that you can roll forward.
Speaker Change: And any more color just on how you're approaching building the pipeline for more events like this.
Speaker Change: Yes, I think there are a number of learnings I think.
Speaker Change: Remember the Taylor Swift concert was extremely successful, but it was not just released in IMAX. It was released more broadly, but I think if you look at our indexing and you look at our results in China. The more you lean into the IMAX visuals and the IMAX sound system and the Specialness.
Richard Lewis Gelfond: But I think if you look at our indexing and you look at our results in China, the more you lean into the IMAX visuals and the IMAX sound system and the specialness of the IMAX experience, I think you'll drive higher numbers for IMAX, and we will do that. And I think also, you have to look at this on a global basis. So, for example, Taylor Swift is a very big name in China, but there are much bigger names in China that you've never heard of.
Speaker Change: The IMAX experience I think it will drive higher numbers in IMAX, and we're going to do that and I think also.
Speaker Change: You have to look at this on a global basis. So for example, Taylor Swift has very big name in China, but there are much bigger names in China that you've never heard of and we did a concert film in France, a few years ago with a bad named Indo chain, which was an extra.
Richard Lewis Gelfond: And we did a concert film in France a few years ago with a band named Indochine, which was an extremely big success. As a matter of fact, the Queen concert we did in conjunction with Pathé in France, and it did really well in France and really well in Japan. So some of the lessons are, you know, Taylor Swift is somewhat unique, but there is talent in different parts of the world, and it's not a really high production cost where you can, you know, really, you know, find golden nuggets and do really good business in those markets. And the other part of your question, in terms of a pipeline, it won't surprise you, there is a pretty good pipeline because people who saw the Taylor Swift results and saw the Talking Heads results, which is another one we did, and saw the Queen results, I mean, they're approaching us, and they're interested.
Speaker Change: <unk> big success as a matter of fact.
Speaker Change: Lean concert, we did in conjunction with Pat and.
Speaker Change: In France, it did really well in France, and really well in Japan. So some of the lessons or Taylor Swift is somewhat unique but there is talent in different parts of the world.
Speaker Change: Not a really high production costs, where you can really.
Speaker Change: Find Golden Nuggets, and do really good business.
Speaker Change: Those markets.
Speaker Change: The other part of your question in terms of pipeline. It won't surprise you. There is a pretty good pipeline because people who saw the Taylor Swift results and saw the talking heads results, which is another one where again and saw the Queen results I mean, they are approaching us and they are interested in as I said is.
Richard Lewis Gelfond: And as I said, as long as you manage your costs and you use social media and use the group to help promote it, I think there's a pretty good business. Sponsored by SimWave, Last quarter, you talked about merging SimWave with the Imax Enhanced License. So now that you have a couple more months under your belt, can you just talk about how you're planning to use this new brand and what your vision is for what this could look like in a few years? Well, I mean, I remain incredibly excited about our consumer streaming technology. It's a way not only to save money for the streamers, but it's also a way to monitor quality and improve quality.
Speaker Change: As long as you manage your cost and you use social media and use the group to help promote it I think there's a pretty good business there.
Speaker Change: Great that's great color.
Speaker Change: And then just on same wave I think last quarter, you talked about merging some wave with the IMAX enhanced licensing business.
Speaker Change: So now that you have a couple more months under your belt can you just talk about how you are planning to use this new brand and what your vision is for what this could look like in a few years' time. Thank you.
Speaker Change: Well I mean, I remain incredibly excited about our consumer streaming technology.
Speaker Change: Way not only to save money.
Speaker Change: For the streamers, but it's also way to monitor quality and improve quality, we have been making strides not only in streaming content to the consumer but also on the sports streaming content to the streamers until the broadcast network. So I think the Tam.
Richard Lewis Gelfond: We've been making strides not only in streaming content to the consumer but also in sports streaming content to the streamers and to the broadcast networks. So I think the TAM keeps getting larger there. I think one of the things we learned is that maybe the sales cycle is longer than we expected at the beginning because in these organizations, it's not like, oh, well, we've been waiting for you to invent a product like this. You have to figure out where it fits in and how you sell it to the financial staff where the savings are. But I think we've done a very good job of building the infrastructure on both the sales side and the marketing side, as well as the plug and play side.
Speaker Change: <unk> getting larger they're I think one of the things. We learned is that maybe the sales cycle is longer than we expected at the beginning because in these organization, it's not like Oh Wow, we've been waiting for you to invent a product like this you have to figure out where it fits in and how you sell to the financial staff, where the <unk>.
Speaker Change: <unk>, but I think we've done a very good job of building the infrastructure on both the sales side and the marketing side and the plug and play side and it's not going to be tomorrow, but I feel good about our prospects for the remainder of the year.
Richard Lewis Gelfond: And it's not going to be tomorrow, but I feel good about our prospects for the remainder of the year. Got it. Thank you very much. Thank you. I'm currently showing no further questions at this time. I'll turn the call back over to Mr. Richard Gelfond for a closing comment. Okay, thank you very much, operator. I mean, I think in 2023, the financial results will speak for themselves. They're extremely good. If you look at our multiples, both on adjusted EPS and adjusted EBITDA and where we're trading, from my point of view, they're, you know, surprisingly low, especially given the strong balance sheet and the asset-wide model.
Speaker Change: Got it thank you very much good luck.
Speaker Change: Thank you.
Speaker Change: I'm currently showing no further questions at this time I will turn the call back over to Mr. Richard <unk> for closing comments.
Richard: Okay. Thank you very much operator.
Richard: I think in 2023.
Richard: Actual results were.
Richard: Speak for themselves they're extremely good if you look at our multiples both on adjusted EPS and adjusted EBITDA on where we're trading from my point of view there.
Richard: Surprisingly low, especially given the strong balance sheet and the asset light model. Unlike other companies there are zero existential risks around IMAX and Theres a lot of wind at our backs and if you look at our non financial accomplishments which include.
Richard Lewis Gelfond: You know, unlike other companies, there are zero existential risks around IMAX, and there's a lot of wind at our backs. And if you look at our non-financial accomplishments, which include, Thanks to Oppenheimer and Avatar and other things introduced the importance of IMAX into the bloodstream of the future of cinema, I mean, I think we are a lot of what the future of cinema is. And I think that as long as we keep doing what we're doing, which we're going to continue doing very soon in a fairly material way, we'll be rewarded. And thank you to those of you who have been around for the ride. We look forward to our next call. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
Richard: Thanks to Oppenheimer, an avatar and other things introduced and the importance of IMAX enter the blood stream of the future of cinema.
Richard: We are a lot of what the future of cinema is and I think that as long as we keep doing what we're doing which we're going to continue doing very soon in a fairly material way will be rewarded and thank you for those of you who have been around for the ride and we look forward to our next call.
Speaker Change: Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Uh huh.
Speaker Change: [music].