Q2 2025 IMAX Corp Earnings Call

After the speaker's presentation, there will be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. 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 Horsley, Head of Investor Relations. Please go ahead.

To ask a question during the session you will need to press star one on your telephone you will.

I'll hear an automated message advising your hand is raised to withdraw your question. Please press star one again.

Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your first speaker today, Jennifer Horsley head of Investor Relations. Please go ahead.

Speaker Change: Good morning, and thank you for joining us for IMAX is second quarter 2025 earnings conference call on the call today to review the financial results are rich <unk>, Chief Executive Officer, and <unk> Fernandez, Our Chief Financial Officer, Rob Lister Chief Legal Officer is also joining US today today's conference call is being <unk>.

Jennifer Horsley: Good morning, thank you for joining us for IMAX's Q2 2025 Earnings Conference Call. On the call today to review the financial results are Rich Gelfond, Chief Executive Officer, and Natasha Fernandes, our Chief Financial Officer. Robert Lister, Chief Legal Officer, is also joining us today. Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted on the investor relations section of our site. Our historical Excel model is posted to the website as well. I would like to remind you of the following information regarding forward-looking statements. Today's call, as well as the accompanying slide deck, may include statements that are forward-looking and that pertain to future results or outcomes.

Speaker Change: Webcast in its entirety on our website a replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted on the Investor Relations section of our site. Our historical Excel model is posted to the website as well.

Speaker Change: I'd 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 Horsley: These forward-looking statements are subject to risks and uncertainties that could cause our actual future results to not occur or occurrences to differ. Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update those 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 the reconciliation to non-GAAP financial measures, are contained in this morning's press release and our earnings materials, which are available on the investor relations page of our website at imax.com.

Speaker Change: Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes.

Speaker Change: 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.

Speaker Change: <unk> of these measures as well as the reconciliation to non-GAAP financial measures are contained in this morning's press release and our earnings materials, which are available on the Investor Relations page of our website at IMAX Dot com with that let me now turn the call over to Mr. Richard Galvan Rich.

Jennifer Horsley: With that, let me now turn the call over to Mr. Richard Gelfond. Rich?

Richard Galvan: Thanks, Jennifer.

Richard Galvan: Thanks, everyone for joining us as we review another outstanding quarter for IMAX, We delivered strong financial results in Q2 highlighted by installation growth of 50% box office growth of over 40% and an adjusted EBITDA margin of 43%.

Richard Gelfond: Thanks, Jennifer, and thanks, everyone, for joining us as we review another outstanding quarter for IMAX. We delivered strong financial results in Q2, highlighted by installation growth of 50%, box office growth of over 40%, and an adjusted EBITDA margin of 43%. We've opened a total of 57 new and upgraded IMAX locations year to date, compared to 39 during the same period of 2024. Given the demand for IMAX systems, we're moving higher in our range for full-year installations to between 150 and 160 systems worldwide. We've now completed agreements for 124 new and upgraded IMAX systems worldwide year to date, compared to 130 in all of 2024. Q2 was our highest grossing quarter ever at the domestic box office, as we remain on track to achieve our guidance of $1.2 billion for the full year.

Operator: At this time, all participants are in listen-only mode.

Operator: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star-one-one on your telephone. You will hear an automated message advising your hand is free. To withdraw your question, please press star one one again.

By welcome to the Q2 2025 IMAX Corporation earnings call at this time, all participants are in listen-only mode.

Richard Galvan: We've opened a total of 57, new and upgraded IMAX locations year to date compared to 39. During the same period of 2024, given the demand for IMAX systems were moving higher in our range for full year installations to between $1 50, and 160 systems worldwide.

After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1. 1 on your telephone, you will hear an automated message advising. Your hand is raised.

Operator: Please be advised that today's conference is being recorded.

To withdraw your question. Please press star 1 1 again.

Jennifer Horsley: I would now like to hand the conference over to your first speaker today, Jennifer Horsley, Head of Investor Relations. Please go ahead.

Please be advised that today's conference is being recorded.

Richard Galvan: And we've now completed agreements for 124, new and upgraded IMAX systems worldwide year to date compared to 130 and all of 2024 Q.

Jennifer Horsley: Good morning, and thank you for joining us for Imax's second quarter 2025 earnings conference call. On the call today to review the financial results are Rich Gelfond, Chief Executive Officer, and Natasha Fernandes, our Chief Financial Officer. Rob Lister, Chief Legal Officer, is also joining us today.

Speaker Change: I would now like to hand the conference over to your first Speaker today Jennifer horley head of investor relations. Please go ahead

Richard Galvan: Q2 was our highest grossing quarter ever at the domestic box office as we remain on track to achieve our guidance of $1 2 billion for the full year.

Jennifer Horsley: Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted on the investor relations section of our site. Our historical Excel model is posted to the website as well.

Richard Galvan: This is a direct result of our strategy to increase our global market share, which had three 6% of total box office.

Richard Gelfond: This is a direct result of our strategy to increase our global market share, which at 3.6% of total box office on less than 1% of screens, is up 19% year-over-year in Q2. To ensure that IMAX is the platform of choice for filmmakers and studios who want to deliver the best experience for the greatest films from around the world. Coming into Q2, we were focused on an unprecedented run of 8 consecutive Filmed for IMAX releases this summer. Films shot with our cameras featuring exclusive IMAX expanded aspect ratio, designed every step of the way to be experienced on our screens. With all 7 of these films to date, we've averaged about 15% of the North American box office on opening weekend on just 400 IMAX screens, soaring as high as 20% on Mission: Impossible – The Final Reckoning, Sinners, and F1.

Richard Galvan: Less than 1% of screens is up 19% year over year in the second quarter and to ensure that IMAX is the platform of choice for filmmakers and studios, who want to do over the best experience for the greatest films from around the world coming into the second quarter, we were focused on and.

Jennifer Horsley: 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.

Speaker Change: Good morning and thank you for joining us for imac's second quarter 2025 earnings conference. Call on the call today, to review the financial results. Our Rich gelfond, Chief Executive Officer in 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. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release, and the slide presentation have been posted on the investor relations section of our site. Our historical Excel model is posted to the website as well.

Richard Galvan: Precedented run of eight consecutive film for IMAX releases this summer.

Richard Galvan: Films shot with our cameras featuring exclusive IMAX expanded aspect ratio designed every step of the way to be experienced on our screens.

Jennifer Horsley: 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 those statements as a result of new information, future events, or otherwise.

Speaker Change: 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 or actual future results to not occur or occurrences to differ.

Richard Galvan: With all seven of these films to date, we've averaged about 15% of the North American box office on opening weekend on just 400 IMAX screens soaring.

Speaker Change: Please refer to our SEC filings for more detailed discussion of some of the factors that could affect our future results and outcomes.

Jennifer Horsley: 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 the reconciliation to non-GAAP financial measures, are contained in this morning's press release and our earnings materials, which are available on the investor license page of our website at Imax.com.

Richard Galvan: Soaring as high as 20% and mission impossible. The final reckoning centers and F. One thats a fee we've only achieved eight times in our entire history and three of those milestones came in this second quarter and with Superman, our 16% opening weekend in death.

Richard Gelfond: That's a feat we've only achieved eight times in our entire history, and three of those milestones came in this Q2. With Superman, our 16% opening weekend indexing marked our highest market share ever on a domestic debut over $100 million. It's becoming increasingly clear that we're raising the floor for our market share. 10% used to be the high end of what we delivered on major tent-pole releases. Now, thanks to our Filmed for IMAX strategy, the higher level is business as usual. In May, a New York Times feature posed the question, "Why is IMAX suddenly everywhere?" The preponderance of Filmed for IMAX releases this summer, along with our outsized share of the global box office, demonstrates the importance of IMAX across the global cinema business. More filmmakers are wielding our technology to create films designed to be experienced on our screens.

Richard Galvan: <unk> marked our highest market share ever on a domestic debut over $100 million.

Richard Gelfond: With that, let me now turn the call over to Mr. Richard Gelfond. Thanks, Jennifer, and thanks, everyone, for joining us as we review another outstanding quarter for Imax. We delivered strong financial results in Q2, highlighted by installation growth of 50 percent, box office growth of over 40 percent, and an adjusted EBITDA margin of 43 percent. We've opened a total of 57 new and upgraded Imax locations year-to-date, compared to 39 during the same period of 2024. Given the demand for Imax systems, we're moving higher in our range for full-year installations to between 150 and 160 systems worldwide.

Richard Galvan: It's becoming increasingly clear that we are raising the floor for our market share.

Speaker Change: Any 4 looking statements that we make on this, call are based on assumptions as of today and we undertake no obligation to update those 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 the reconciliation to non-gaap financial measures are contained. In this morning'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 Rich.

Richard Galvan: 10% used to be the high end of what we deliver on major Tentpole releases now thanks to our our film for IMAX strategy.

Richard Galvan: The higher level as business as usual.

Richard Galvan: In May New York Times feature pose the question quote why is IMAX suddenly everywhere unquote and a preponderance of fill for IMAX releases. This summer along with our outsized share of the global box office demonstrates the importance of IMAX across the global.

Richard Gelfond: Thanks Jennifer and thanks everyone for joining us as we review. Another outstanding quarter for IMAX, we delivered strong financial results in Q2, highlighted by installation, growth of 50% box office growth of over 40% and an adjusted Eva de margin of 43%.

Richard Galvan: Cinema business.

Richard Gelfond: And we've now completed agreements for 124 new and upgraded Imax systems worldwide year-to-date, compared to 130 in all of 2024. Q2 was our highest-grossing quarter ever at the domestic box office, as we remain on track to achieve our guidance of $1.2 billion for the full year. This is a direct result of our strategy to increase our global market share, which at 3.6% of total box office. on less than 1% of screens is up 19% year-over-year in the second quarter. And to ensure that Imax is the platform of choice for filmmakers and studios who want to deliver the best experience for the greatest films from around the world.

Richard Galvan: More filmmakers are wielding our technology to create films designed to be experienced on our screens studios, who are competing more fiercely than ever to secure IMAX release windows and maker IMAX, a centerpiece of their marketing campaigns to event the size their films.

Richard Gelfond: We've opened a total of 57 new and upgraded IMAX locations year to date compared to 39 during the same period of 2024, given the demand for iMac systems, we're moving higher in our range for full year installations to between 150 and 160 systems worldwide.

Richard Gelfond: Studios are competing more fiercely than ever to secure IMAX release windows and make IMAX a centerpiece of their marketing campaigns to eventize their films. Audiences are responding, demonstrating a strong preference for seeing films in IMAX, and exhibitors are clamoring to get more IMAX systems into their networks. Fully capitalize on the very IMAX-friendly slate rolling out over the next several years. We are seeing that our strong system signings and installations this year, which is a powerful catalyst for our business. The more we grow our network, the more we grow sales and box office revenue, and we maintain a strong capital position. Our recent renewal and expansion of our revolving credit facility demonstrates the continued confidence in our financial growth model. Simply put, this is a fantastic time to be in the IMAX business, and we have good reason to believe it will only get better.

Richard Gelfond: And we've now completed agreements for 124 new and upgraded iMac systems worldwide, year-to-date compared to 130 and all of 2024.

Richard Galvan: Audiences are responding demonstrating a strong preference for seeing films in IMAX and exhibitors are clamoring to get more IMAX systems into their networks.

Richard Gelfond: Q2 was our highest grossing quarter ever at the domestic box office as we remain on track to achieve our guidance of 1.2 billion for the full year.

Richard Galvan: And fully capitalize on the very IMAX friendly slate rolling out over the next several years.

Richard Gelfond: This is a direct result of our strategy to increase our global market share which at 3.6% of total box office.

Richard Galvan: We're seeing that our strong systems signings and installations this year, which is a powerful catalyst for our business.

Richard Galvan: The more we grow our network the more we grow sales and box office revenue.

Richard Gelfond: Coming into the second quarter, we're focused on an unprecedented run of eight consecutive film for Imax releases this summer. Films shot with our cameras, featuring exclusive Imax Expanded Aspect Ratio, designed every step of the way to be experienced on our screens. With all seven of these films to date, we've averaged about 15% of the North American box office on opening weekend on just 400 IMAX screens. soaring as high as 20% on Mission Impossible, The Final Reckoning, Sinners, and F1. That's a feat we've only achieved eight times in our entire history, and three of those milestones came in this second quarter.

Richard Galvan: And we maintain a strong capital position a recent renewal and expansion of our revolving credit facility demonstrates the continued confidence in our financial growth model.

Richard Gelfond: Unless I'm 1% of screens is up 19% year-over-year in the second quarter and to ensure that iMac is the platform of choice for filmmakers and Studios who want to do it over the best experience for the greatest films from around the world. Coming into the second quarter, we were focused on an unprecedented run of 8 consecutive film for IMAX releases this summer.

Richard Galvan: Simply put this is a fantastic time to be in the IMAX business and we have good reason to believe it will only get better.

Richard Gelfond: Films shot with our cameras, featuring exclusive, IMAX expanded aspect ratio design. Every step of the way to be experienced on our screens.

Richard Galvan: Looking at our global network installs came in at the high end of our projections with 36 systems in the quarter. The full year is set to yield several milestones, including our largest single year expansion ever in France, with seven expected installations five of which have.

Richard Gelfond: Looking at our global network, installs came in at the high end of our projection, with 36 systems in the quarter. The full year is set to yield several milestones, including our largest single-year expansion ever in France with 7 expected installations, 5 of which have already been completed. Our largest single-year expansion in the Netherlands with 4 expected installations, close to doubling our network in that country. Our largest single-year expansion ever in Japan, with 8 already installed and at least 4 to go, representing network growth of over 20% in that country from last year. Our recent agreement with Regal will see us expand into our first new location in Manhattan in 15 years, as well as a new location in the iconic LA Live entertainment complex with an 80-foot screen and an IMAX 70mm film projector.

Richard Gelfond: With all 7 of these films to date. We've averaged about 15% of the North American box office on opening weekend on, just 400 IMAX screens.

Richard Galvan: <unk> already been completed our largest single year expansion in the Netherlands, with Forex expected installations close to doubling our network in that country.

Richard Gelfond: And with Superman, our 16% opening weekend indexing marked our highest market share ever on a domestic debut, over $100 million. It's becoming increasingly clear that we're raising the floor for our market share. 10% used to be the high end of what we delivered on major tentpole releases. Now, thanks to our Film for IMAX strategy. at a higher level as business as usual.

Richard Galvan: And our largest single year expansion ever in Japan, with eight already installed and at least four to go representing network growth of over 20% in that country from last year. Our recent agreement with Regal will see us expand into the our first new location in Manhattan in 15 years.

Richard Gelfond: W over a hundred million dollars. It's becoming increasingly clear that we're raising the floor for our market share

Richard Gelfond: 10% used to be the high-end of what we delivered on major tentpole releases now thanks to our our film for IMAX strategy.

Richard Galvan: As well as the new location and the iconic <unk> live entertainment complex with an 80 foot screen and an IMAX 70 millimeter film projector with eight new domestic exhibition partners in 2024, and a record domestic box office in the second quarter we.

Richard Gelfond: In May, a New York Times feature posed the question, quote, why is Imax suddenly everywhere, unquote. And the preponderance of film for Imax releases this summer, along with our outsized share of the global box office, demonstrates the importance of Imax across the global cinema business. More filmmakers are wielding our technology to create films designed to be experienced on our screens. Studios are competing more fiercely than ever to secure Imax release windows and make Imax a centerpiece of their marketing campaigns to avanticize their films. Audiences are responding, demonstrating a strong preference for seeing films in IMAX.

Richard Gelfond: The higher level is business as usual.

Richard Gelfond: With 8 new domestic exhibition partners in 2024 and our record domestic box office in Q2, we remain keenly focused on growth in North America, one of our highest per-screen markets in the world. We also recently completed another agreement with Wanda that will see IMAX systems replace existing premium format auditoriums in up to 27 locations, a sign of our dominant competitive position in China. We continue to do brisk system sales in Australia, where recent agreements with EVT, Hoyts, and Village will help satisfy strong consumer demand and high PSAs for the IMAX experience. Q2 offered strong evidence of our ability to elevate box office hits and drive results through our diversified global slate. One of Hollywood's biggest hits in years, it's easy to forget the questions that surrounded "Sinners" in advance of its release.

Richard Galvan: Remain keenly focused on growth in North America, one of our highest per screen markets in the World. We also recently completed another agreement with Wanda that we'll see IMAX systems replace existing premium format auditoriums and up to 27 locations a sign of our dominate.

Richard Gelfond: In May a New York Times feature posed. A question quote, why is IMAX suddenly everywhere unquote? And the preponderance of Phil for IMAX releases this summer, along with our outside share of the global box, office demonstrates, the importance of IMAX across the global Cinema business,

Richard Galvan: <unk> position in China.

Richard Galvan: We continue to do brisk system sales in Australia were recent agreements with EVP voids and village will help satisfy strong consumer demand and high psa's for the IMAX experience.

Richard Gelfond: More filmmakers are wielding our technology to create films. Designed to be experienced on our screens studios are competing more fiercely than ever to secure IMAX release windows and make a IMAX a centerpiece of their marketing campaigns to event decides their films.

Richard Gelfond: And exhibitors are clamoring to get more IMAX systems into their networks.

Richard Gelfond: audiences are responding demonstrating a strong preference for seeing films that IMAX

Richard Gelfond: and fully capitalize on the very Imax-friendly slate rolling out over the next several years. We're seeing that our strong system signings and installations this year, which is a powerful catalyst for our business. The more we grow our network, the more we grow sales and box office revenue.

Richard Gelfond: An exhibitor is a clamoring to get more iMac systems into their Networks.

Richard Galvan: The second quarter offered strong evidence of our ability to elevate box office hits and drive results through our diversified global slate.

Richard Gelfond: And fully capitalized on a very IMAX friendly. Slate rolling out over the next several years.

Richard Galvan: One of Hollywood's biggest hits in years, it's easy to forget the questions that surround it centers in advance of its release as long time partners a director Ryan Krueger, we encouraged him to make IMAX a centerpiece of the marketing.

Richard Gelfond: and we maintain a strong capital position.

Richard Gelfond: We're seeing that our strong system signings and installations this year, which is a powerful Catalyst for our business. The more we grow our Network, The More We Grow sales and box office revenue

Richard Gelfond: A recent renewal and expansion of our evolving credit facility demonstrates the continued confidence in our financial growth model. Simply put, this is a fantastic time to be in the Imax business, and we have good reason to believe it will only get better. Looking at our global network, installs came in at the high end of our projection with 36 systems in the core.

Richard Gelfond: As longtime partners of director Ryan Coogler, we encouraged him to make IMAX the centerpiece of the marketing. IMAX drove 21% of the film's global box office during its 2-week IMAX run, even bringing it back weeks later for an encore run in IMAX film locations. Mission: Impossible – The Final Reckoning made similar use of IMAX from the production through the marketing and the launch of the film. Final Reckoning includes more IMAX exclusive expanded aspect ratio than any Mission film, and premieres from Tokyo to London to New York were hosted on IMAX screens. We far outpaced our projections in delivering over $75 million in global box office, our best result ever of the Mission: Impossible franchise and a double-digit percentage of the film's overall gross across its entire run. The Q3 is already off to a great start.

Richard Galvan: IMAX drove 21% of the films Global box office during its two weeks IMAX run even bringing back weeks later for an encore run an IMAX film locations Mitch.

Richard Gelfond: And we maintain a strong Capital position, a recent renewal and expansion of our revolving credit. Facility demonstrates the continued confidence in our financial growth model.

Richard Galvan: Mission impossible to final reckoning made similar use of IMAX from the production through the marketing and the launch of the film.

Richard Gelfond: Simply put this is a fantastic time to be in the IMAX business and we have good reason to believe. It will only get better.

Richard Gelfond: The full year is set to yield several milestones including our largest single year expansion ever in France with seven expected installations, five of which have already been completed. Our largest single year expansion in the Netherlands with four expected installations close to doubling our network in that country. and our largest single-year expansion ever in Japan with eight already installed and at least four to go, representing network growth of over 20% in that country from last year.

Richard Galvan: Final reckoning includes more IMAX exclusive expanded aspect ratio than any mission film and premieres from Tokyo to London to New York for hosted on IMAX screens, we far outpaced our projections and delivering over $75 million in global box office our best.

Richard Galvan: Result ever of the mission impossible franchise, and a double digit percentage of the films overall growth across its entire run.

Richard Gelfond: Looking at our Global Network installs came in at the high end of our projections with 36 systems in the court. The full year is set to yield several Milestones, including our largest single year expansion ever in France with 7 expected, installations 5 of which have already been completed. Our largest single year expansion, in the Netherlands with forests expected, installations close to doubling our Network in that country.

Richard Galvan: Third quarter is already off to a great start F. One the movie was designed from top to bottom for the IMAX experience China entirely in IMAX expanded aspect ratio by a long term partner Joe Kaczynski.

Richard Gelfond: Our recent agreement with Regal will see us expand into our first new location in Manhattan in 15 years, as well as a new location in the iconic LA Live Entertainment Complex with an 80-foot screen and an Imax 70mm film projector. With eight new domestic exhibition partners in 2024 and our record domestic box office in the second quarter, we remain keenly focused on growth in North America, one of our highest per-screen markets in the world.

Richard Gelfond: F1: The Movie" was designed from top to bottom for the IMAX experience, shot entirely in IMAX expanded aspect ratio by our long-term partner, Joe Kosinski. We exceeded our internal projections in delivering more than $80 million and counting a whopping 22% of the domestic box office and 18.5% of the global box office for the film. "Superman" will conclude its IMAX run this week with well over $50 million in global box office. In local language, the Demon Slayer sequel delivered our biggest opening weekend ever in Japan this past weekend with $3 million and an incredible $48,000 per screen average. In China, the much-anticipated film for IMAX release, "Dungeon Rescue," opens next month. Our year-to-date local language box office stands at nearly $230 million, just shy of the $244 million full-year record we set in 2023.

Richard Galvan: And we exceeded our internal projections and delivering more than $80 million.

Richard Galvan: Accounting, a whopping 22% of the domestic box office and 18, 5% of the global box office for the film.

Richard Galvan: Superman will conclude its IMAX run this fleet with well over $50 million in global box office and in local language the demons Slayers sequel.

Richard Gelfond: We also recently completed another agreement with WANDA that will see Imax Systems replace existing premium format auditoriums in up to 27 locations, a sign of our dominant competitive position in China. And we continue to do brisk system sales in Australia, where recent agreements with EVT, Hoyts and Village will help satisfy strong consumer demand and high PSAs for the Imax experience.

Richard Galvan: Our biggest opening weekend ever in Japan, This past weekend with $3 million and an incredible $48000 per screen average and in China. The much anticipated film for IMAX release, J&J rescue opens next month, our year to date local language.

Richard Gelfond: And our largest single-year expansion ever in Japan with 8 already installed and at least 4 to go representing Network growth of over, 20% in that country from last year, a recent agreement with Regal. We'll see US expand into the our first new location in Manhattan in 15 years as well as a new location in the iconic. LA live entertainment complex with an 80 foot screen and an iMac 70 millimeter film projector with 8, new domestic exhibition Partners in 2024 and our record domestic box office in the second quarter. We remain keenly focused on growth in North America, 1 of our highest per screen markets in the world. We also recently completed another agreement with Wanda that will see IMAX systems for Place, existing premium format auditoriums and up to 27 locations assigned a

Richard Galvan: Box office dance at nearly $230 million, just shy of the $244 million full year record. We set in 2003 at the current pace, we expect to set a new record within Q3, the second half slate looks promising this weekend Marvel's law.

Richard Gelfond: The second quarter offered strong evidence of our ability to elevate box office hits and drive results through our diversified global slate.

Richard Gelfond: Dominate competitive position in China and we continue to do brisk system sales in Australia where recent agreements with EVT hoists and Village will help satisfy strong to Consumer demand and high PSAs for the IMAX experience.

Richard Gelfond: At the current pace, we expect to set a new record within Q3. The H2 slate looks promising. This weekend, Marvel's long-awaited Fantastic Four opens worldwide. The Rotten Tomatoes scores and pre-sales are pretty strong. Our film for IMAX slate continues into the fall with Tron: Ares and Mortal Kombat II. There are several IMAX-friendly genre releases, including Predator: Badlands and The Running Man. Zootopia 2 is shaping up to be another big sequel for Disney Animation and holds significant global appeal, particularly across our Asian markets.

Richard Gelfond: One of Hollywood's biggest hits in years, it's easy to forget the questions that surrounded Sinners in advance of its release. As longtime partners of director Ryan Coogler, we encouraged him to make Imax a centerpiece of the marketing. Imax drove 21% of the film's global box office during its two-week Imax run, even bringing it back weeks later for an encore run in Imax film locations.

Richard Galvan: Long awaited fantastic four opens worldwide.

Richard Gelfond: The second quarter offered strong evidence of our ability to elevate box, office hits and drive results through our Diversified Global slate.

Richard Galvan: The Rotten Tomatoes scores and pre sales are pretty strong.

Richard Galvan: Our film frame that slate continues into the fall with Tron, Aries and Mortal Kombat too there are several IMAX friendly game genre releases, including predator badlands and running them.

Speaker Change: 1 of Hollywood's biggest hits in years. It's easy to forget the questions that surrounded sinners in advance of its release, as longtime partners of director. Ryan cougar, we encouraged him to make imac's centerpiece of the marketing.

Richard Galvan: <unk> two is shaping up to be another big sequel for Disney animation and hold significant global appeal, particularly across our Asian markets.

Richard Gelfond: Mission Impossible, The Final Reckoning, made similar use of Imax from the production through the marketing and the launch of the film. Final Reckoning includes more Imax exclusive expanded aspect ratio than any Mission film and premieres from Tokyo to London to New York were hosted on Imax screens. We far outpaced our projections in delivering over $75 million in global box office, our best result ever of the Mission Impossible franchise, and a double digit percentage of the film's overall gross across its entire run.

Speaker Change: IMAX drove 21% of the film's global box office during its 2 weeks. IMAX run. Even bringing it back weeks later for an encore run in IMAX film locations.

Richard Galvan: And the year concludes with the second installment of Wicked, and finally, with Avatar fire and ash, which will be preceded with an IMAX release of avatar the way of water in October.

Richard Gelfond: The year concludes with the second installment of "Wicked," and finally with "Avatar: Fire and Ash," which will be preceded with an IMAX re-release of "Avatar: The Way of Water" in October. 2026 kicks off the year with the "Avatar" carryover and features Christopher Nolan's "The Odyssey," as well as "Avengers," "Star Wars: The Mandalorian & Grogu," "Super Mario Brothers" movie sequel, "Toy Story 5," Greta Gerwig's "Narnia," and "Dune: Part Three." A very compelling 2027 slate continues to take shape, including "Star Wars: Starfighter" from "Deadpool" and "Wolverine" director Shawn Levy, "Avengers: Secret Wars," "The Batman 2," and "Spider-Man: Beyond the Spider-Verse." We continue to deepen our relationships with tech companies in the theatrical space as well. Our partnership with Apple has yielded excellent results to date on F1, and we're re-releasing F1 on 8 August.

Speaker Change: Mission Impossible. The final Reckoning made similar. Use of IMAX from the production through the marketing and the launch of the film.

Richard Galvan: 2026 kicks off the year with the Avatar carryover and features Christopher Nolan the IFC as well as Avengers Star Wars demand oriented and <unk> Super Mario Brew Brothers movie sequel Toy story, five granted girl was Narnia.

Richard Gelfond: The third quarter is already off to a great start.

And due in part III and a very compelling 2007 slate continues to take shape, including Star Wars Starfighter from Deadpool and Wolverine Directors Shawn Levy.

Speaker Change: We far outpaced our projections in delivering over 75 million in global box office, our best results ever of the mission impossible franchise and a double-digit percentage of the film's overall gross across its entire run.

Richard Gelfond: F1 the movie was designed from top to bottom for the Imax experience, shot entirely in Imax expanded aspect ratio by our long-term partner Joe Koczynski. And we exceeded our internal projections in delivering more than $80 million and counting a whopping 22% of the domestic box office and 18.5% of the global box office for the film. Superman will conclude its IMAX run this week with well over $50 million in global box office. And in local language, the Demon Slayer sequel delivered our biggest opening weekend ever in Japan this past weekend with $3 million and an incredible $48,000 per screen average.

Speaker Change: <unk> Secret Wars, Batman, two and Spider man beyond the Spider verse, we continue to deepen our relationships with tech companies in the theatrical space as well our partnership with Apple as yielded excellent results to date on F. One.

Speaker Change: The third quarter is already off to a great start F1. The movie was designed from top to bottom for the IMAX experience shot entirely and IMAX expanded aspect ratio by a long-term partner Joe kazinsky.

Richard Galvan: Re releasing F. One on August eight.

Speaker Change: And we exceeded our internal projections in delivering, more than 80 million dollars, and Counting a whopping 22% of the domestic box office and 18.5% of the global box office for the film.

Richard Galvan: Amazon will release its first ever filmed for IMAX title next year with Ryan Gosling projects Hail Mary and we were very pleased by the announced that June director, Denise Zyla knew a long term partner of the company, who is called IMAX quote the future of cinema.

Richard Gelfond: Amazon will release its first-ever film for IMAX title next year with Ryan Gosling's "Project Hail Mary." We were very pleased by the announce that "Dune" director Denis Villeneuve, a long-term partner of the company who has called IMAX the future of cinema, has been tapped to direct the next James Bond movie for Amazon MGM. We are working closely with Netflix on the rollout of next year's IMAX exclusive theatrical run of "Narnia" from Greta Gerwig. Furthermore, we continue to offer diversified content, including films for music fans, including concert documentaries for the Grateful Dead, Prince, and The Rolling Stones. To close, the fundamentals of our business are strong. The strength and impact of our brand across the entertainment landscape has reached new highs, and we have tremendous runway with a strong slate and network growth prospects ahead.

Richard Gelfond: And in China, the much-anticipated film for IMAX release, Danji Rescue, opens next month. Our year-to-date local language box office stands at nearly $230 million, just shy of the $244 million full-year record we set in 23. At the current pace, we expect to set a new record within Q3.

Richard Galvan: Unquote has been tapped to direct the next James Bond movie for Amazon MGM, and we're working closely with Netflix on the rollout of next year's IMAX exclusive theatrical run of Narnia from Greta Gerwig.

Richard Galvan: Furthermore, we continue to offer diversified content, including films for music fans, including concert documentaries for the Grateful dead.

Richard Gelfond: The second half slate looks promising.

Richard Gelfond: This weekend, Marvel's long-awaited Fantastic Four opens worldwide. The Rotten Tomatoes scores and pre-sales are pretty strong. Our film for IMAX Slate continues into the fall with Tron Ares and Mortal Kombat 2. There are several IMAX-friendly genre releases, including Predator Badlands and The Running Man. Zootopia 2 is shaping up to be another big sequel for Disney Animation and holds significant global appeal, particularly across our Asian margins. And the year concludes with the second installment of Wiccan, and finally with Avatar Fire and Ash, which will be preceded with an Imax re-release of Avatar The Way of Water in October.

Richard Galvan: And the rolling stones.

Richard Galvan: Close the fundamentals of our business are strong the strength and impact of our brand plus the entertainment landscape has reached new highs and we have tremendous runway with our strong slate and network growth prospects ahead.

Richard Galvan: And we're focused on building on our momentum to strengthen our strategic position executing with financial discipline continuing to provide the most immersive entertainment experiences in the world and delivering for our shareholders. Thank you with that I'll turn it open ended Pasha.

Richard Gelfond: We're focused on building on our momentum to strengthen our strategic position, executing with financial discipline, continuing to provide the most immersive entertainment experience in the world, and delivering for our shareholders. Thank you. With that, I'll turn it over to Natasha.

Speaker Change: Thanks, Rich and good morning, everyone IMAX second quarter demonstrated the strength of our model and the discipline of our execution IMAX delivered another quarter of record breaking results driven by a 41% year over year increase in global box office strong installation growth of 50% and <unk>.

Natasha Fernandes: Thanks, Rich. Good morning, everyone. IMAX's Q2 demonstrated the strength of our model and the discipline of our execution. IMAX delivered another Q of record-breaking results, driven by a 41% year-over-year increase in global box office, strong installation growth of 50%, and an adjusted EBITDA margin exceeding 42% for the second straight Q. These results are not just numbers. We believe they reflect the scalability of our platform, the momentum in our business, and the growing demand for premium cinematic experiences. We believe we're not just outperforming the market, we're expanding it. We're attracting more audiences to choose a theatrical experience, capturing more value per screen, expanding our global footprint, and delivering consistent returns, all while maintaining a sharp focus on capital efficiency and long-term shareholder value.

Richard Gelfond: 2026 kicks off the year with the Avatar carryover and features Christopher Nolan's The Odyssey as well as Avengers, Star Wars, The Mandalorian and Grogu, Super Mario Bros.

Speaker Change: And adjusted EBITDA margin exceeding 42% for the second straight quarter Easter.

Speaker Change: These results are not just numbers, we believe they reflect the scalability of our platform and momentum in our business and the growing demand for premium cinematic experiences.

Richard Gelfond: movie sequel, Toy Story 5, Greta Gerwig's Narnia, and Dune Part 3, and a very compelling 27th slate continues to take shape, including Star Wars Starfighter from Deadpool and Wolverine director Sean Levy, Avengers Secret Wars, The Batman 2, and Spider-Man Beyond the Spider-Verse.

Speaker Change: We believe we're not just outperforming the market we're expanding it.

Speaker Change: We're attracting more audiences to choose the theatrical experience capturing more value per screen, expanding our global footprint and delivering consistent return all while maintaining a sharp focus on capital efficiency and long term shareholder value.

Richard Gelfond: We continue to deepen our relationships with tech companies in the theatrical space as well. Our partnership with Apple has yielded excellent results to date on F1, and we're re-releasing F1 on August 8th. Amazon will release its first-ever film for Imax title next year with Ryan Gosling's Project Hail Mary. And we were very pleased by the announcement that Dune director Denis Villeneuve, a long-term partner of the company, who has called Imax, quote, the future of cinema, unquote, has been tapped to direct the next James Bond movie for Amazon MGM. And we're working closely with Netflix on the rollout of next year's Imax exclusive theatrical run of Narnia from Greta Gerwig.

Our results through the first half places us on track to meet or beat guidance for the full year, including on box office system installations now expected to be between 150 and 160 for the year and adjusted EBITDA margin now expected to be in the low <unk>.

Natasha Fernandes: Our results through H1 place us on track to meet or beat guidance for the full year, including on box office, system installations now expected to be between 150 and 160 for the year, and adjusted EBITDA margin now expected to be in the low 40s. Taking a closer look at our Q2 results. Overall, we delivered revenues of $92 million compared to $89 million in the prior year Q2, and achieved gross margin in Q2 of $54 million, which grew 22% year-over-year. This reflects a 58% margin or over 900 basis point improvement year-over-year, reflecting high incremental profit flow-through from the stronger box office performance, along with a more profitable mix of revenues.

Speaker Change: Taking a closer look at our Q2 results.

Speaker Change: Overall, we delivered revenues of $92 million compared to $89 million in the prior year second quarter and achieved gross margin in Q2, and $54 million, which grew 22% year over year.

Speaker Change: This reflects a 58% margin or over 900 basis point improvement year over year, reflecting high incremental profit flow through from the stronger box office performance, along with a more profitable mix of revenue.

Richard Gelfond: Furthermore, we continue to offer diversified content, including films for music fans, including concert documentaries for The Grateful Dead, Prince, and The Rolling Stones.

Speaker Change: Looking at our results at the segment level.

Speaker Change: Content solutions revenue of $34 million, reflecting the significant growth in IMAX box office of over 40%, while the prior year benefited from the downstream sale of deeply range of documentary to Amazon.

Natasha Fernandes: Looking at our results at the segment level, Content solutions revenues of $34 million reflected the significant growth in IMAX box office of over 40%, while the prior year benefited from the downstream sale of The Blue Angels documentary to Amazon. Content solutions gross margin of $22 million increased $6 million at a 66% margin up 2,000 basis points year-over-year, driven by strong incremental margins coming from the higher box office. Overall, box office outperformed the industry, resulting in Q2 global market share of 3.6% on less than 1% of screens, driven by a remarkable 5.3% share of domestic box office and 6% share of China's box office. Technology products and services revenues of $56 million was up 9% year-over-year with a gross margin of $30 million, up 17% year-over-year and at a 54% margin up 360 basis points year-over-year, driven by growth in box office and system sales.

Richard Gelfond: To close, the fundamentals of our business are strong. The strength and impact of our brand across the entertainment landscape has reached new highs and we have a tremendous runway with a strong slate and network growth prospects ahead. And we're focused on building on our momentum to strengthen our strategic position, executing with financial discipline, continuing to provide the most immersive entertainment experience in the world, and delivering for our shareholders.

Content solutions gross margin of $22 million increased $6 million at 66% margin up 2000 basis points year over year, driven by strong incremental margin coming from the higher box office overall box office outperformed the industry, resulting in Q2 global market share of $3.

Speaker Change: 6% on less than 1% of screen driven by a remarkable five 3% sure and domestic box office and 6% share of China box office.

Natasha Fernandes: With that, I'll turn it over to Natasha. Thanks, Rich, and good morning, everyone. Imax's second quarter demonstrated the strength of our model and the discipline of our execution. Imax delivered another quarter of record-breaking results, driven by a 41% year-over-year increase in global box office, strong installation growth of 50%, and an adjusted EBITDA margin exceeding 42% for the second straight quarter. These results are not just numbers. We believe they reflect the scalability of our platform, the momentum in our business, and the growing demand for premium cinematic experience. We believe we're not just outperforming the market, we're expanding it.

Speaker Change: Technology products and services revenues at $56 million was up 9% year over year with a gross margin of $30 million up 17% year over year, and a 54% margin up 360 basis points year over year, driven by growth in box office and system sales.

Speaker Change: The quarter saw strong growth in installations 36 systems versus 24 in the prior year, which included a higher mix of sales type arrangements.

Natasha Fernandes: The quarter saw strong growth in installations, 36 systems versus 24 in the prior year, which included a higher mix of joint revenue-sharing arrangements. Installations included 8 systems that were signed earlier this year and already installed in Q2 2025. This is a good indicator of the robust demand by exhibitors to install IMAX systems in advance of the exceptional IMAX slate in 2025 and beyond. For instance, in Japan year to date, we have installed 8 new systems, increasing our network there by 15% since the beginning of the year. Domestically, our backlog of 131 systems is up 46% year-over-year. The momentum for signings continues with 28 signings in Q2 and 124 year-to-date. We are only halfway through the year and are close to equaling the 130 systems signed in 2024.

Speaker Change: Moreover, installations included eight systems that were signed earlier this year and already installed in the second quarter of 2025.

Natasha Fernandes: We're attracting more audiences to choose a theatrical experience, capturing more value per screen, expanding our global footprint, and delivering consistent returns, all while maintaining a sharp focus on capital efficiency and long-term shareholder value. Our results through the first half place us on track to meet or beat guidance for the full year, including on box office, system installations now expected to be between 150 and 160 for the year, and adjusted EBITDA margin now expected to be in the low 40s. Taking a closer look at our Q2 results, overall we delivered revenues of $92 million, compared to $89 million in the prior year's second quarter, and achieved gross margin in Q2 of $54 million, which grew 22% year-over-year.

Speaker Change: This is a good indicator of the robust demand by exhibitors.

Speaker Change: IMAX systems in advance of the exceptional IMAX slate in 2025 and beyond.

And in Japan year to date, we have installed eight need systems, increasing our network there by 15% since the beginning of the year and domestically our backlog of 131 systems is up 46% year over year.

Speaker Change: And the momentum for signings continues with 28 signings in Q2 and 124 year to date.

Speaker Change: We are only halfway through the year and are close to equaling 130 systems signed in 2024.

Speaker Change: We are seeing good geographic diversity and signings, including higher per screen average countries, such as Australia, France. The U S and Japan. These signings are not only replenishing the growing our committed backlog feeding the pipeline for future network expansion.

Natasha Fernandes: We are seeing good geographic diversity in signings, including higher per-screen average countries such as Australia, France, the US, and Japan. These signings are not only replenishing, but growing our committed backlog, feeding the pipeline for future network expansion. Turning to operating expenditures, defined as research and development and selling, general and administrative expenses, excluding stock-based compensation, was $30 million in Q2, which decreased $3 million year-over-year, reflecting our continued focus on gaining operational efficiencies and looking for better ways to use technology and scrutinizing work processes to find productivity opportunities. We continue to take proactive steps, which led to year-to-date restructuring costs of over $840,000 to enhance operational efficiency and reduce annual costs while optimizing IMAX's organizational structure, including eliminating redundant roles, leveraging technology for efficiency, and centralizing select functions, which positively impacts both margin and OpEx.

Natasha Fernandes: This reflects a 58% margin, or over 900 basis point improvement year-over-year, reflecting high incremental profit flow-through from the stronger box office performance, along with a more profitable mix of revenues.

Speaker Change: Turning to operating expenditures defined as research and development and selling general and administrative expenses, excluding stock based compensation was $30 million in the second quarter, which decreased $3 million year over year, reflecting our continued focus on gaining operational efficiencies and looking for better ways to you.

Natasha Fernandes: Looking at our results at the segment level. Content Solutions revenues of $34 million reflected the significant growth in Imax's box office of over 40% while the prior year benefited from the downstream sale of the Blue Angels documentary to Amazon. Content Solutions' gross margin of $22 million increased $6 million at a 66% margin, up 2,000 basis points year over year, driven by strong incremental margins coming from the higher box office. Overall, box office outperformed the industry, resulting in Q2 global market share of 3.6% on less than 1% of screens, driven by a remarkable 5.3% share of domestic box office and 6% share of China's box.

Speaker Change: Technology, and scrutinizing work processes defined productivity opportunities.

Speaker Change: We continue to take proactive steps, which led to year to date restructuring costs of over 840000 to enhance operational efficiency and reduce annual costs, while optimizing imax's organizational structure, including eliminating redundant roles leveraging technology for efficiency.

Speaker Change: And centralizing select functions, which positively impacts both margin and opex.

Speaker Change: Overall, our strong operational performance led to a second quarter total consolidated adjusted EBITDA of 39 million, which increased $8 million or 26% year over year, driven by the higher revenues and gross margin.

Natasha Fernandes: Technology products and services revenues of $56 million was up 9% year-over-year, with a gross margin of $30 million, up 17% year-over-year, and at a 54% margin, up 360 basis points year-over-year, driven by growth in box office and system sales. Quarters saw strong growth in installations, 36 systems versus 24 in the prior year, which included a higher mix of sales-type arrangements. Moreover, installations included eight systems that were signed earlier this year and already installed in the second quarter of 2025.

Speaker Change: Technology products and services revenues of $56 million was up 9% year over year with a gross margin of $30 million up 17% year over year, and 54% margin up 360 basis points year over year, driven by growth in box office and system sales.

Natasha Fernandes: Overall, our strong operational performance led to a Q2 total consolidated adjusted EBITDA of $39 million, which increased $8 million or 26% year-over-year, driven by the higher revenues and gross margin. This resulted in a strong adjusted EBITDA margin percentage of 42.6%, up 780 basis points year-over-year and giving us a H1 adjusted EBITDA margin of also 42.6%. Q2 adjusted EPS was $0.26, up $0.08 year-over-year, driven fully by strong profit growth as tax expense year-over-year was a headwind of $0.09 given the tax benefit recognized as a result of the internal asset reorganization in Q2 of 2024. Turning to cash flow and the balance sheet. Cash flow from operations continues to build and is just over $30 million through the H1, which is up 25% from the prior year period.

Speaker Change: This resulted in our strong adjusted EBITDA margin percentage of 42, 6% up 780 basis points year over year, and giving us our first half adjusted EBITDA margin also 42, 6%.

Speaker Change: The quarter saw strong growth in installations 36 systems versus 24 in the prior year, which included a higher mix of sales type arrangements.

Speaker Change: Second quarter, adjusted EPS was <unk> 26 up 8% year over year, driven fully by strong profit growth as tax expense year over year was a headwind of <unk> given the tax benefit recognized as a result of the internal asset reorganization in the second quarter of 2024.

Speaker Change: Moreover, installations included eight systems that were signed earlier this year and already installed in the second quarter 2025.

Natasha Fernandes: This is a good indicator of the robust demand by exhibitors to install IMAX systems in advance of the exceptional IMAX slate in 2025 and beyond. For instance, in Japan, year-to-date, we have installed eight new systems, increasing our network there by 15% since the beginning of the year, and domestically, our backlog of 131 systems is up 46% year-over-year. And the momentum for signings continues with 28 signings in Q2 and 124 year-to-date. We are only halfway through the year and are close to equaling the 130 systems signed in 2024. We are seeing good geographic diversity in signings, including higher per screen average countries such as Australia, France, the U.S., and Japan.

Speaker Change: This is a good indicator of the robust demand by exhibitors.

Speaker Change: So IMAX systems in advance of the exceptional IMAX slate in 2025 and beyond.

Speaker Change: Turning to cash flow and the balance sheet cash flow from operations continues to build and it's just over $30 million through the first half, which is up 25% from the prior year period, a very good first six months considering the cash flow has yet to capture collections on the larger box office titles. This year.

Speaker Change: And in Japan and year to date, we have installed eight knee system, increasing our in network, thereby 15% since the beginning of the year and domestically our backlog of 131 systems is up 46% year over year.

Natasha Fernandes: A very good first 6 months, considering the cash flow has yet to capture collections on the larger box office titles this year, and cash expenses around compensation and events tends to be H1-weighted. We expect cash flows to continue to grow and similar to total adjusted EBITDA, the dynamics of cash flow are quite positive as box office expands, leading to incrementality, particularly considering the cash flow characteristics of our joint revenue-sharing arrangements, where the capital expenditure is at the beginning of an average 10-year contract term. Turning to investing cash flows. We continue to prioritize use of our available capital to invest in the business, including $15 million spent on growth CapEx in the H1 related to partnering with exhibitor customers to grow and upgrade the IMAX network through joint revenue-sharing arrangements.

Speaker Change: And the momentum for signings continues with 28 signings in Q2 and 124 year to date.

Speaker Change: And cash expenses around compensation and events tends to be first half weighted.

Speaker Change: We are only halfway through the year and are close to equaling 130 systems signed in 2024.

Speaker Change: We expect cash flow to continue to grow in similar to total adjusted EBITDA. The dynamics of cash flow are quite positive as box office expense, leading to incremental <unk>, particularly considering the cash flow characteristics of our joint revenue sharing arrangements, where the capital expenditures that at the beginning of an average 10 year car.

Speaker Change: We're seeing good geographic diversity and signings, including higher per screen average countries, such as Australia, France. The U S and Japan. These signings are not only replenishing the growing our committed backlog feeding the pipeline for future network expansion.

Natasha Fernandes: These signings are not only replenishing, but growing our committed backlog, feeding the pipeline for future network expansion.

Speaker Change: <unk> term.

Speaker Change: Turning to investing cash flows we continue to prioritize use of our available capital to invest in the business, including $15 million spent on growth capex in the first half related to partnering with exhibitor customers to grow and upgrade the IMAX network through joint revenue sharing arrangements. This represents an attractive.

Natasha Fernandes: Turning to operating expenditures, defined as research and development and selling general and administrative expenses, excluding stock-based compensation, was $30 million in the second quarter, which decreased $3 million year over year, reflecting our continued focus on gaining operational efficiencies and looking for better ways to use technology and scrutinizing work processes to find productivity opportunities.

Speaker Change: Turning to operating expenditures defined as research and development and selling general and administrative expenses, excluding stock based compensation was $30 million in the second quarter, which decreased $3 million year over year, reflecting our continued focus on gaining operational efficiencies and looking for better ways to you.

Speaker Change: Return on investment opportunity as numerous large partners, including AMC and Wanda and Regal are ramping up investment in IMAX as they upgrade their complexes, including bringing IMAX in to replace other premium formats.

Natasha Fernandes: This represents an attractive return on investment opportunity as numerous large partners, including AMC, Wanda, and Regal, are ramping up investment in IMAX as they upgrade their complexes, including bringing IMAX in to replace other premium formats as they look to capture more of the market share gains IMAX is delivering through our Filmed for IMAX program. We are also making progress strengthening further our capital structure with the significant announcement last week of our amended and enlarged credit facility, which we expanded from $300 million to $375 million with a term that extends into 2030 and at an improved borrowing rate. This is a very positive development that not only increases our liquidity and strengthens our capital structure, but also reflects the recognition of the momentum in our business, long-term trajectory, and support from our banking partners.

Speaker Change: With technology, and scrutinizing work processes to find productivity opportunities.

Natasha Fernandes: We continue to take proactive steps which led to year-to-date restructuring costs of over $840,000 to enhance operational efficiency and reduce annual costs, while optimizing Imax's organizational structure, including eliminating redundant roles, leveraging technology for efficiency, and centralizing select functions, which positively impacts both margin and Overall, our strong operational performance led to a second quarter total consolidated adjusted EBITDA of $39 million, which increased $8 million, or 26% year-over-year, driven by the higher revenues and gross margin. This resulted in a strong adjusted EBITDA margin percentage of 42.6% up 780 basis points year-over-year and giving us a first half adjusted EBITDA margin of also 42.6%.

Speaker Change: We continue to take proactive steps, which led to year to date restructuring costs of over 840000 to enhance operational efficiency and reduce annual costs, while optimizing imax's organizational structure, including eliminating redundant roles leveraging technology for efficiency.

Speaker Change: Look to capture more of the market share gains IMAX is delivering to our film for IMAX program.

Speaker Change: We are also making progress strengthening further our capital structure with a significant announcement last week of our amended and in large credit facility, which we expanded from 300 million to $375 million with a term that extends into 2030 and at an improved borrowing rates.

Speaker Change: And centralizing select functions, which positively impacts both margin and opex.

Speaker Change: Overall, our strong operational performance led to a second quarter total consolidated adjusted EBITDA of $39 million, which increased $8 million or 26% year over year, driven by the higher revenues and gross margin.

Speaker Change: This is a very positive development that not only increases our liquidity and strengthens our capital structure, but also reflects the recognition of the momentum in our business long term trajectory and support from our banking partners.

Speaker Change: This resulted in our strong adjusted EBITDA margin percentage of 42, 6% up 780 basis points year over year, and giving us our first half adjusted EBITDA margin also 42, 6%.

Speaker Change: Included in our capital structure $230 million of debt from our convertible senior notes due in April 2026 that bear an interest rate of 5% per annum with a capped call leading to a $37 per share conversion price with our strong liquidity position and available facilities we have.

Natasha Fernandes: Included in our capital structure is $230 million of debt from our convertible senior notes due in April 2026 that bear an interest rate of 0.5% per annum with a capped call leading to a $37 per share conversion price. With our strong liquidity position and available facilities, we have the ability to be opportunistic as we assess the timing of when to address these notes and the nature of the instrument, whether that be our revolver or through new notes. Our capital position remains very strong with cash at $109 million. Debt, excluding deferred financing costs, was $280 million, and our current available liquidity is approximately $490 million. In conclusion, our team is executing well and our H1 of the year exceeded our expectations on all of our guidance measures, IMAX box office, installations, and adjusted EBITDA margin.

Natasha Fernandes: Second quarter adjusted EPS was $0.26, up $0.08 year-over-year, driven fully by strong profit growth as tax expense year-over-year was a headwind of $0.09, given the tax benefit recognized as a result of the internal asset reorganization in the second quarter of 2020.

Speaker Change: Second quarter, adjusted EPS was <unk> 26 up 8% year over year, driven fully by strong profit growth as tax expense year over year was a headwind of nine.

Speaker Change: The ability to be opportunistic as we assess the timing of when to address these notes and the nature of the instrument whether that be our revolver or through new notes.

Speaker Change: Given the tax benefit recognized as a result of the internal asset reorganization in the second quarter of 2024.

Natasha Fernandes: Turning to cash flow and the balance. Cash flow from operations continues to build and is just over $30 million through the first half, which is up 25% from the prior year period. A very good first six months, considering the cash flow has yet to capture collections on the larger box office titles this year, and cash expenses around compensation and events tends to be first half waste.

Speaker Change: Our capital position remains very strong with cash at $109 million.

Speaker Change: Turning to cash flow and the balance sheet.

Speaker Change: Cash flow from operations continues to build and is just over $30 million through the first half, which is up 25% from the prior year period.

Speaker Change: Excluding deferred financing costs was $280 million and our current available liquidity is approximately $490 million.

Speaker Change: The first six months considering the cash flow has yet to capture collections on the larger box office titles this year and cash expenses around compensation and event tends to be first half weighted.

Speaker Change: In conclusion, our team is executing well and our first half of the year exceeded our expectations on all of our guidance measures IMAX box office installations, and adjusted EBIT margin. We are focused on execution in the second half has started off strong with July.

Natasha Fernandes: We expect cash flows to continue to grow, and similar to total adjusted EBITDA, the dynamics of cash flow are quite positive as box office expands, leading to incrementality, particularly considering the cash flow characteristics of our joint revenue sharing arrangements, where the capital expenditure is at the beginning of an average 10-year contract. Turning to investing cash flows, we continue to prioritize use of our available capital to invest in the business, including $15 million spent on growth CapEx in the first half related to partnering with exhibitor customers to grow and upgrade the Imax network through joint revenue sharing arrangements.

Speaker Change: We expect cash flow to continue to grow in similar to total adjusted EBITDA. The dynamics of cash flow are quite positive as box office expense, leading to incremental <unk>, particularly considering the cash flow characteristics of our joint revenue sharing arrangements, where the capital expenditures that at the beginning of an average 10 year.

Natasha Fernandes: We are focused on execution, the H2 has started off strong with July box office pacing to one of our highest Julys on record, driven by the mix of Hollywood and local language blockbusters, including the standout performance of "F1" and "Superman" runs, as well as the record Japan opening of "Demon Slayer" this past weekend and several larger budget local language titles in China and other countries, along with our first German and Brazil titles later in this year. Looking beyond 2025, there is good visibility into IMAX's future installations as we have a significant and replenishing backlog with a clear path to years of network growth as IMAX location zones are less than 50% penetrated globally, with potential for even more zones to be added to our addressable market.

Speaker Change: Surface casing to one of our highest july's on record driven by the mix of Hollywood and local language blockbusters, including the standout performance of F. One and Superman runs as well as the record Japan opening of demons layer. This past weekend and several larger budget local language titles in Chile.

Speaker Change: Short term.

Speaker Change: Turning to investing cash flows we continue to prioritize use of our available capital to invest in the business, including $15 million spent on growth capex in the first half related to partnering with exhibitor customers to grow and upgrade the IMAX Network Street joint revenue sharing arrangements.

Speaker Change: Ana and other countries along with our first German in Brazil titles later in this year.

Speaker Change: And looking beyond 2025, there is good visibility into IMAX as future installation as we have a significant and replenishing backlog with a clear path to years of network growth as IMAX locations zones are less than 50% penetrated globally with potential for even more zones to be added to our addressable.

Natasha Fernandes: This represents an attractive return on investment opportunity as numerous large partners, including AMC, WANDA, and Regal, are ramping up investment in Imax as they upgrade their complexes, including bringing Imax in to replace other premium formats as they look to capture more of the market share gains Imax is delivering through our Film for Imax program.

Speaker Change: This represents an attractive return on investment opportunity as numerous large partners, including AMC Wanda and Regal are ramping up investment in IMAX as they upgrade their complex, including bringing IMAX eat in to replace other premium formats as they look to capture more of the market share gains.

Speaker Change: <unk>.

Speaker Change: Similarly, the demand to secure an IMAX release window continues to grow resulting in filmmakers and studios building deeper and earlier partnerships. This is affording us a clear view into IMAX film slate for 2026 and beyond.

Speaker Change: <unk> is delivering to our film for IMAX program.

Natasha Fernandes: Similarly, the demand to secure an IMAX release window continues to grow, resulting in filmmakers and studios building deeper and earlier partnerships. This is affording us a clear view into IMAX's film slate for 2026 and beyond. In short, the model is working. Filmmakers and studios are partnering with IMAX to deliver the best movie experience. Consumers are noticing and choosing IMAX. Exhibitors are looking to meet that demand by adding more IMAX systems to their circuits, and it's translating to growth and expanding margins, profits, and cash flows for IMAX. That, in turn, will generate greater shareholder returns now and into the future. With that, I will turn the call over to the operator for Q&A.

Natasha Fernandes: We are also making progress strengthening further our capital structure, with the significant announcement last week of our amended and enlarged credit facility, which we expanded from $300 million to $375 million, with a term that extends into 2030 and at an approved borrowing rate. This is a very positive development that not only increases our liquidity and strengthens our capital structure, but also reflects the recognition of the momentum in our business, long-term trajectory, and support from our banking partners. Included in our capital structure is $230 million of debt from our convertible senior notes due in April 2026 that bear an interest rate of 0.5% per annum with a cap call leading to a $37 per share conversion price.

Speaker Change: We are also making progress strengthening further our capital structure with a significant announcement last week of our amended and in large credit facility, which we expanded from 300 million to 375 million, but the term that extends into 2030 and at an improved borrowing rates. This is a.

Speaker Change: In short the model is working filmmakers and studios are partnering with IMAX to deliver the best movie experience.

Speaker Change: <unk> are noticing and choosing IMAX.

Speaker Change: A very positive development that not only increases our liquidity and strengthens our capital structure, but also reflects the recognition of the momentum in our business long term trajectory and support from our banking partners.

Speaker Change: Exhibitors are looking to meet that demand by adding more IMAX systems to their circuits and it's translating to growth and expanding margins profits and cash flows for IMAX that in turn will generate greater shareholder returns now and into the future.

Speaker Change: Included in our capital structure is $230 million of debt from our convertible senior notes due in April 2026 that bear an interest rate of 5% per annum.

Speaker Change: With that I will turn the call over to the operator for Q&A.

Speaker Change: Thank you at this time, we will conduct a question and answer saying as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: Call, leading to a $37 per share conversion price with our strong liquidity position and available facilities, we have the ability to be opportunistic as we assess the timing of when to address these notes and the nature of the instrument whether that be our revolver or through new notes.

Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Omar Mejias with Wells Fargo. Your line is now open.

Natasha Fernandes: With our strong liquidity position and available facilities, we have the ability to be opportunistic as we assess the timing of when to address these notes and the nature of the instrument, whether that be our revolver or through new notes.

Speaker Change: Please stand by while we compile the Q&A roster.

Natasha Fernandes: Our capital position remains very strong with cash at $109 million, debt excluding deferred financing costs with $280 million, and our current available liquidity is approximately $490 million.

Speaker Change: Our first question comes from Omar <unk> with Wells Fargo. Your line is now open.

Speaker Change: Our capital position remains very strong with cash at $109 million.

Speaker Change: Debt, excluding deferred financing costs was $280 million and our current available liquidity is approximately $490 million.

Speaker Change: Yeah.

Speaker Change: Good morning, and thank you for the question.

Speaker Change: Maybe first rich.

Omar Mejias: Good morning, and thanks for the question. Maybe first, Rich, given the strong demand for IMAX slots from studios and filmmakers, do you see a future where all or almost all films you play across your circuits are Filmed for IMAX films? Just curious on how you see the evolution of the number of Filmed for IMAX movies across your network.

Speaker Change: Given the strong demand for my Mac slots from studios.

Natasha Fernandes: In conclusion, our team is executing well, and our first half of the year exceeded our expectations on all of our guidance measures, Imax box office, installations, and adjusted EBITDA margin. We are focused on execution, and the second half has started off strong with July box office pacing to one of our highest July's on record, driven by the mix of Hollywood and local language blockbusters, including the standout performance of F1 and Superman runs, as well as the record Japan opening of Demon Slayer this past weekend, and several larger budget local language titles in China and other countries, along with our first German and Brazil titles later in this year.

Speaker Change: In conclusion, our team is executing well and our first half of the year exceeded our expectations on all of our guidance measures IMAX box office installations, and adjusted EBITDA margin. We are focused on execution in the second half has started off strong with July.

Speaker Change: And film makers do you see a future where all or almost all films play across your circuit or a film for IMAX film just curious on how you see the evolution of the number of film for IMAX movies across your network.

Speaker Change: I don't think it will evolve to that point Omar we want to make film for IMAX, something really special including the right kind of content the right visual the right sound. So there are certain movies will they might be really good movies. They just do.

Speaker Change: Box office.

Richard Gelfond: I don't think it'll evolve to that point, Omar. We want to make Film for IMAX something really special, including the right kind of content, the right visual, the right sound. There are certain movies, while they might be really good movies, they just don't demand that kind of treatment. As you know, when it's a Film for IMAX, it gets a two-week minimum run, and I just don't think that all the movies will be suitable for a two-week run. As you know, the slots are what's really valuable, like the IMAX playtime. It's a little bit of a trade-off. When you do Filmed for IMAX, you get higher indexing, you get the right property, but you're agreeing to two weeks before you've seen the movie. Obviously, as this quarter shows, the results were so strong, and the indexing was so strong.

Speaker Change: Shifting to one of our highest your lives on record driven by the mix of Hollywood and local language blockbusters, including the standout performance of F. One and Superman runs as well as the record Japan opening of Demon player. This past weekend and several larger budget local language titles in China and other countries.

Speaker Change: Don't demand that kind of treatment and as you know when it's a film Brian exit it gets a two week minimum Ron and I, just don't think that all of the movies will be suitable for two week run as you know the slots are what's really valuable like the IMAX play time and.

Speaker Change: Along with our first German in Brazil titles later in this year.

Natasha Fernandes: And looking beyond 2025, there is good visibility into IMAX's future installation, as we have a significant and replenishing backlog with a clear path to years of network growth, as IMAX location zones are less than 50% penetrated globally, with potential for even more zones to be added to our addressable market. Similarly, the demand to secure an Imax release window continues to grow, resulting in filmmakers and studios building deeper and earlier partnerships. This is affording us a clear view into Imax's film slate for 2026 and beyond.

Speaker Change: And looking beyond 2025, there is good visibility into IMAX with future installation as we have a significant and replenishing backlog with a clear path to years of network growth as our.

Speaker Change: It's a little bit of a trade off when you do film for IMAX, you get higher indexing you get the right property, but you are agreeing to two weeks before you've seen the movie However, obviously the.

Speaker Change: Imacs location zones are less than 50% penetrated globally with potential for even more zones to be added to our addressable market.

Speaker Change: Similarly, the demand to secure an IMAX release window continues to grow resulting in filmmakers and studios building deeper and earlier partnerships. This is affording us a clear view into IMAX film slate for 2026 and beyond.

Speaker Change: This quarter shows the results were so strong in the indexing was so strong so just to give you a sense in 2026, we already have nine film for IMAX titles and for 2027, we already have at least eight so it is something we will.

Richard Gelfond: Just to give you a sense, in 2026, we already have 9 Filmed for IMAX titles. For 2027, we already have at least 8. It is something we're going to lean into for the right content, but we won't make it ubiquitous.

Natasha Fernandes: In short, the model is working. Filmmakers and studios are partnering with Imax to deliver the best movie experience. Consumers are noticing and choosing Imax. Exhibitors are looking to meet that demand by adding more Imax systems to their circuits, and it's translating to growth and expanding margins, profits, and cash flows for Imax that in turn will generate greater shareholder returns now and into the future.

Speaker Change: In short the model is working filmmakers and studios are partnering with IMAX to deliver the best movie experience consumers are noticing and choosing IMAX.

Speaker Change: Going to lean into for the right content, but we will make it ubiquitous.

Speaker Change: Visitors are looking to meet that demand by adding more IMAX systems to their circuits and it's translating to growth and expanding margins profits and cash flows for IMAX that in turn will generate greater shareholder returns now and into the future.

Speaker Change: No that's very helpful and maybe switching.

Omar Mejias: No, that's very helpful. Maybe switching to some recent media reports that have been stating that US theater chains are under talks about jointly marketing their PLF screens to better compete with the growing influence of IMAX. Do you view this as a competitive threat to your business or more of an opportunity to partner with US exhibitors to potentially work together and grow the pie? Just curious on your thoughts on that.

Speaker Change: Some recent media reports.

Speaker Change: That had been stating that U S theater chains are under cost about jointly marketing the pls creative to better compete with the growing there.

Operator: With that, I will turn the call over to the operator for Q&A.

Speaker Change: With that I will turn the call over to the operator for Q&A.

Speaker Change: Of IMS do you view this as a competitive threat to your business or more of an opportunity to partner with U S. Exhibitors can potentially work together and grow the pie just curious on your thoughts on that.

Operator: Thank you.

Operator: At this time, we will conduct a question and answer session. As a reminder, to ask your question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 118. Please stand by while we compile the Q&A roster.

Speaker Change: Thank you at this time, we will conduct a question and answers.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: Yeah, So Omar we've indexed on average of 15% on our <unk> films. This year on the opening weekend and more than 20% on three of them that's a real.

Speaker Change: Please standby, while we compile the Q&A roster.

Richard Gelfond: Yeah. Omar, we've indexed an average of 15% on our FFI films this year on opening weekend and more than 20% on three of them. That's a real aha moment for exhibitors who haven't been in the IMAX business before. They're kind of scurrying to come up with a strategy. A lot of people have tried to create competitors to IMAX over the years. The fact is that our brand and relationships with filmmakers are unmatched, and our technology is superior, and audiences know it. Two of the three exhibitors mentioned in the story you're referring to have told us that they're not part of any discussions. We just signed a renewal for 40 locations with Regal and are opening new locations with them in LA and New York City.

Omar Mejias: Our first question comes from Omar Mejias with Wells Fargo. Your line is now open. Good morning and thanks for the question.

Omar <unk>: Our first question comes from Omar <unk> with Wells Fargo. Your line is now open.

Speaker Change: Ha moment for exhibitors, who haven't been in the IMAX business before and they are kind of scurrying to come up with a strategy.

Speaker Change: Yeah.

Speaker Change: Good morning, and thanks for the question maybe first rich.

Richard Gelfond: Maybe first, Rich, given the strong demand for IMAX slots from studios and filmmakers, do you see a future where all or almost all films you play across your circuit are a film for IMAX films? Just curious on how you see the evolution of the number of film for IMAX movies across your network. I don't think it'll evolve to that point, Omar. We want to make film for Imax something really special, including, you know, the right kind of content, the right visual, the right sound. So there are certain movies, while, you know, they might be really good movies, they just don't demand that kind of treatment.

Speaker Change: The strong demand from IMAX slots from studios.

Speaker Change: Lot of people are trying to create competitors carmax over the years, but the fact is that our brand and relationships with filmmakers are unmatched and our technology is superior and audiences node.

Speaker Change: And film makers do you see a future where all or almost all films play across your circuit are done for IMAX Bill just curious in how you see the evolution of the number of film for IMAX movies across your network.

Speaker Change: Two of the three exhibitors mentioned in the story Youre, referring to have told us that they are not part of any discussion. We just signed a renewal for 40 locations with Regal and are opening new locations with them in L. A and New York City and.

Speaker Change: I don't think it will evolve to that point Omar we wanted to make films for IMAX, something really special including the right kind of content the right visual the right sound. So there are certain movies will yeah, they might be really good movies. They just do.

Speaker Change: You missed the boat.

Speaker Change: It's getting a little late and I think these are kind of.

Richard Gelfond: If you miss the boat, it's getting a little late, and I think these are kind of pathetic attempts to try and take a stand that is highly unlikely to work.

Speaker Change: <unk> attempts to try and take a stand that is highly unlikely to work.

Speaker Change: Don't demand that kind of treatment and as you know when it's a film Brian access it gets a two week minimum Ron and I, just don't think that all of the movies will be suitable for a two week run as you know the slots are what's really valuable like the IMAX play time and.

Richard Gelfond: And as you know, when it's a film for Imax, it gets a two-week minimum run. And I just don't think that all the movies will be suitable for a two-week run. As you know, the slots are what's really valuable, like the Imax play time. And it's a little bit of a trade-off. When you do film for Imax, you get higher indexing, you get the right property, but you're agreeing to two weeks before you've seen the movie. However, obviously, as, you know, this quarter shows, the results were so strong, the indexing was so strong. So, you know, just to give you a sense, in 2026, we already have nine film for Imax titles.

Speaker Change: That's very helpful. Appreciate it guys.

Omar Mejias: That's very helpful. Appreciate it, guys.

Speaker Change: Please standby for your next question.

Speaker Change: Our next question comes from Chad Beynon with Macquarie. Your line is now open.

Operator: Please stand by for our next question. Our next question comes from Chad Beynon with Macquarie. Your line is now open.

Chad Beynon: Hi, Good morning, Thanks for taking my question and nice results I wanted to piggyback on the back of that last question, maybe from a slightly different angle rich I recall from Investor day several years ago you.

It's a little bit of a trade off when you do film for IMAX, you get higher index, saying you get the right property, but you are agreeing to two weeks before you've seen the movie. However, obviously the as this.

Chad Beynon: Hi. Good morning. Thanks for taking my question. Nice results. I wanted to piggyback on the back of that last question, maybe from a slightly different angle. Rich, I recall from Investor Day several years ago, you laid out the IMAX difference in terms of the economics and the benefits of your partners that would earn your PSAs versus the PSAs they would earn on a non-IMAX screen, and I think the math was pretty compelling then. It seems like the results are diverging even further, given the indexing and some of the results that you're talking about. My question is, in the future, could there be opportunities to improve pricing similar to what we see in the hotel industry as they've increased royalty rates, showing their partners that it helps to be with a brand that has bigger scale and marketing benefits? Thank you.

Chad Beynon: Laid out the IMAX difference in terms of the economics and the benefits of of your partners.

Speaker Change: This quarter shows the results were so strong in the indexing.

Speaker Change: Strong so just to give you a sense in 2026, we already have nine film for IMAX titles and for 2027, we already have at least eight so it is something we're going to lean into the right content, but we won't make it ubiquitous.

Chad Beynon: That would earn your PSA is versus the PSS that would earn on a non IMAX screen.

Richard Gelfond: And for 2027, we already have at least eight.

Chad Beynon: I think the math was pretty compelling then it seems like the results are diverging even further given the indexing in some of the results that Youre talking about so my question is.

Richard Gelfond: So it is something we're going to lean into for the right content, but we won't make it ubiquitous.

Chad Beynon: In the future could there be opportunities to improve pricing similar to what we see in the hotel industry as they've increased royalty rates.

Speaker Change: Yes.

Omar Mejias: That's very helpful, and maybe switching to some recent media reports that have been stating that U.S. theater chains are under-taught about jointly marketing their PLF screens to better compete with the growing influence of IMAX.

Speaker Change: No that's very helpful and maybe switching.

Speaker Change: There's some recent media reports that.

Chad Beynon: Following their partners that it helps to be with a brand that has a bigger scale.

Speaker Change: That had been stating that U S theater chains are under cost about jointly marketing their pls creative to better compete with the growing there.

Chad Beynon: Marketing benefits. Thank you.

Chad Beynon: Thanks, Chad.

Richard Gelfond: Do you view this as a competitive threat to your business or more of an opportunity to partner with U.S. exhibitors to potentially work together and grow the pie? Just curious on your thoughts on that. Yes, so Omar, we've indexed an average of 15% on our FFI films this year on opening weekend and more than 20% on three of them. That's a real aha moment for exhibitors who haven't been in the Imax business before, and they're kind of scurrying to come up with a strategy. A lot of people have tried to create competitors to Imax over the years, but the fact is that our brand and relationships with filmmakers are unmatched, and our technology is superior, and audiences know it.

Speaker Change: Of IMS do you view this as a competitive threat to your business or more of an opportunity to partner with U S. Exhibitors can potentially work together and grow the pie just curious on your thoughts on that.

Chad Beynon: I'd say its definitely.

Richard Gelfond: Thanks, Chad. I would say it definitely gives IMAX a stronger hand in our negotiations with the content providers, whether it's studio or live content. I think we're going to use that carefully. You could see in the quarter that the three of the biggest movies, Sinners, F1, and Mission Impossible, the studios really leaned in to the IMAX of it all. We have Fantastic Four opening this weekend, and Disney has really leaned in to that. I think it's more beneficial for our overall results to get them to lean in more. When people ask, do a film IMAX release, or they want extra time in IMAX, we really use our negotiating style to look for things like IMAX premieres, IMAX tagging, the filmmakers getting more involved in the shout-outs, which has really been happening.

Chad Beynon: Gives IMAX a stronger hand in our negotiations with the content providers, whether it's studio or live content, but I think we're going to.

Chad Beynon: Use that carefully so you could see in the quarter that.

Speaker Change: Yeah. So Omar we've index, an average of 15% on our <unk> five films. This year on the opening weekend and more than 20% on three of them that's a real.

Chad Beynon: Three of the biggest movies.

Chad Beynon: <unk> F one and mission impossible.

Speaker Change: This studio has really leaned in to the IMAX or at all and.

Speaker Change: Tom moment for exhibitors, who haven't been in the IMAX business before and they're kind of scurrying to come up with a strategy a lot of people are trying to create competitors.

Speaker Change: We have.

Speaker Change: Fantastic for opening this weekend, a Disney has really leaned in to that and I think it's more beneficial for our overall results to get them to lean in more and when people ask do in film products release or they want extra time at IMAX, we really use.

Speaker Change: Over the years, but the fact is that our brand and relationships with filmmakers are unmatched and our.

Speaker Change: Technology is superior and audiences Noah.

Richard Gelfond: Two of the three exhibitors mentioned in the story you're referring to have told us that they're not part of any discussions.

Speaker Change: Two of the three exhibitors mentioned in the story Youre, referring to have told us that theyre not part of any discussions we just signed a renewal for 40 locations with Regal and are opening new locations with them in L. A and New York City.

Speaker Change: They are negotiating.

Speaker Change: Style to look for things like IMAX premieres IMAX tagging the filmmakers getting more involved in the shout outs, which has really been happening and I think its a dangerous game to get into kind of different pricing for different movies, I think you send signals that audience.

Omar Mejias: We just signed a renewal for 40 locations with Regal and are opening new locations with them in LA and New York City. And, you know, if you miss the boat, it's getting a little late, and I think these are kind of pathetic attempts to try and take a stand that is highly unlikely to work. That's very helpful. Appreciate it, guys.

Speaker Change: If you missed the boat.

Richard Gelfond: I think it's a dangerous game to get into kind of different pricing for different movies. I think you send signals that audiences will get that studios don't want to give. I think overall, we think it's a fair result for both the studios and us. You probably know that the entertainment business is one very driven by precedent. I think we're happy with where the rate is now, and we'll use whatever extra negotiating power we might have to try and make the experience better marketed and more accessible for people.

Speaker Change: It is getting a little late and I think these are kind of.

Speaker Change: Pathetic attempts to try and take a stand that is highly unlikely to work.

Speaker Change: We'll get that studios want to give.

Speaker Change: Don't want to give.

Speaker Change: Overall.

Speaker Change: We think it's a fair.

Speaker Change: That's very helpful. I appreciate it guys.

Speaker Change: For both the studios in US you probably know that the entertainment businesses, one very driven by precedent and I think we're happy with where the rate is now and we'll use whatever extra negotiating power and we might have to try and make the experience.

Speaker Change: Yeah.

Operator: Please stand by for our next question.

Speaker Change: Please standby for your next question.

Chad Beynon: Our next question comes from Chad Beynon with McQuarrie. Your line is now open. Hi, good morning. Thanks for taking my question, and nice results. I wanted to piggyback on the back of that last question, maybe from a slightly different angle. Rich, I recall from Investor Day several years ago, you laid out the Imax difference in terms of the economics and the benefits of your partners that would earn your PSAs versus the PSAs they would earn on a non-Imax screen. And I think the math was pretty compelling then. It seems like the results are diverging even further, given the indexing and some of the results that you're talking about.

Speaker Change: Our next question comes from Chad Bennett with Macquarie. Your line is now open.

Chad Bennett: Hi, Good morning, Thanks for taking my question and nice results I wanted to piggyback on the back of that last question, maybe from a slightly different angle rich I recall from Investor day several years ago.

Speaker Change: Better market it in more accessible for Pete.

Speaker Change: Okay. Thanks, Rich and then a quick housekeeping for Natasha you mentioned.

Chad Bennett: <unk> laid out the IMAX difference in terms of the economics and the benefits of of your partners that.

Chad Beynon: Okay. Thanks, Rich. A quick housekeeping for Natasha. You mentioned the tax impact from this quarter that was related to something last year. Is there anything else in H2, or should we assume kind of a normal tax rate as that flows into free cash flow for H2?

Speaker Change: The tax.

Speaker Change: The benefit of the tax impact from this quarter that was related to something last year is there anything else in the back half of the year should we assume kind of a normal tax rate as that flows into free cash flow for the back half of the year.

Chad Bennett: That would earn your PSA is versus the PSA as they would earn on a non IMAX screen.

Chad Bennett: I think the math was pretty compelling then it seems like the results are diverging even further given the indexing in some of the results that Youre talking about so my question is.

Richard Gelfond: So my question is… In the future, could there be opportunities to improve pricing, similar to what we see in the hotel industry, as they've increased royalty rates, you know, showing their partners that it helps to be with a brand that has bigger scale and marketing benefits? Thanks, Chad. I would say it definitely, you know, gives IMAX a stronger hand in our negotiations with the content providers, whether it's studio or live content. But I think we're going to use that carefully. So you could see in the quarter that, you know, the three of the biggest movies, Sinners, F1, and Mission Impossible, the studios really leaned in to the IMAX of it all.

Chad Beynon: Yeah, Chad I mean, our internal asset reorganization that we did last year, that's essentially what youre seeing come through this year Q1 had a higher tax rate Q2 has come down significantly and we're aiming towards just simply having an effective tax rate for the entire year.

Chad Bennett: In the future could there be opportunities to improve pricing similar to what we see in the hotel industry.

Natasha Fernandes: Chad. Our internal asset reorganization that we did last year, that's essentially what you're seeing come through this year. Q1 had a higher tax rate. Q2 has come down significantly, and we're aiming towards just simply having an effective tax rate for the entire year, as we said before. That's our goal as opposed to where we've been historically.

Chad Bennett: They've increased royalty rates.

Chad Bennett: Showing their partners that it helps to be with a brand that has bigger scale and marketing benefits. Thank you.

Speaker Change: And before that.

Speaker Change: That's our goal as opposed to where we've been historically.

Chad Bennett: Hum.

Chad Bennett: Thanks, Chad.

Speaker Change: Great. Thank you Beth.

Chad Bennett: I would say definitely.

Speaker Change: Thank you.

Chad Beynon: Great. Thank you both.

Chad Bennett: <unk> IMAX, a stronger hand in our negotiations with the content providers, whether it's studio or live content, but I think we're going to use that carefully. So you could see in the quarter that.

Eric Handler: All right and our next question comes from Eric Handler with Roth capital.

Operator: Thank you. All right, our next question comes from Eric Handler with Roth Capital.

Eric Handler: Good morning. Thank you for the question Rich Big Picture question for you as you think about your ultimate product mix between Hollywood movies local language alternative content.

Eric Handler: Good morning. Thank you for the question. Rich, big picture question for you. As you think about your ultimate product mix between Hollywood movies, local language, alternative content, where are you with alternative content and the number of events that you're doing a year? How are you seeing the average revenue per event scale higher? Just the opportunities there with those and where would you like to see the local language percentage be for overall box office as well?

Chad Bennett: The three of the biggest movies.

Chad Bennett: <unk> F. One and mission impossible. This studio has really leaned in to the IMAX or at all and yes, we are.

Eric Handler: Where are you with alternative content and like the number of events that youre doing the year.

Richard Gelfond: And, you know, we have Fantastic Four opening this weekend, and Disney has really leaned in to that. And I think it's more beneficial for our overall results to get them to lean in more. And when people ask, do a film for IMAX release, would they want extra time in IMAX? You know, we really used our negotiating style to look for things like IMAX premieres, IMAX tagging, the filmmakers getting more involved in the shout outs, which has really been happening.

Eric Handler: How are you seeing like the average revenue prevent scale higher.

Chad Bennett: Have.

Speaker Change: Fantastic for opening this weekend, a Disney has really leaned in to that.

Eric Handler: Just the opportunities there with those and where would you like to see the local language.

Speaker Change: Think it's more beneficial for.

Eric Handler: Percentage being for overall box office as well.

Speaker Change: Our overall results to get them to lean in more and when people ask doing.

Eric Handler: Yes, so so far this year, our percentage of local language content.

Speaker Change: <unk>, Brian extra Leafs, where they want extra time at IMAX, we've really used our negotiating.

Richard Gelfond: Yeah. So far, Eric, this year, our percentage of local language content is around 40%, which is much higher than historically. It's been closer to around 20 in the prior couple of years. Obviously, Ne Zha 2 distorted that to the upside a little bit. If you think about that, look at the North American exhibitors, for example. It's close to 0, their percentage for local language content. I think one of the superpowers of IMAX is our ability to get these films from all over the world. Your timing's good for the question because Demon Slayer just opened in Japan, and we set an all-time record for Japan, and we're actually releasing Demon Slayer in 40 other countries. The last Demon Slayer did $30 million, and this one is a broader release pattern than the last one.

Eric Handler: Around 40%, which is much higher than historically its been closer to around 20 in the prior couple of years, but obviously measure too distorted that to the upside a little bit, but if you think about that.

Speaker Change: Style fill up for things like IMAX premieres IMAX tagging the filmmakers getting more involved in the shout outs, which has really been happening and I think its a dangerous game to get into kind of different pricing for different movies I think it sends signals that audience.

Richard Gelfond: And I think it's a dangerous game to get into kind of different pricing for different movies. I think you send signals that audiences will get that studios want to give, don't want to give. And I think overall, you know, we think it's a fair result for both the studios and us. And you probably know that the entertainment business is one very driven by precedent. And I think, you know, we're happy with where the rate is now, and we'll use, you know, whatever extra negotiating power we might have to try and make the experience. better marketed and more accessible.

Speaker Change: Look at like the North American exhibitors for example, it's close to zero there percentage for local language content and I think one of the superpowers of IMAX is our ability to get these films from all over the world.

Speaker Change: We will get that studios want to give.

Speaker Change: Don't want to give.

Speaker Change: I think overall.

Speaker Change: We think that's a fair result for both the studios in US you probably know that the entertainment business. This one very driven by precedent and I think we're happy with where the rate is now and we'll use whatever extra.

Speaker Change: Your timing is good for the question because demon Slayer.

Speaker Change: Just opened in Japan, and we set an all time record for Japan, and we are actually releasing demon Slayer, an 40 40 other countries and.

Speaker Change: The last few months later to $30 million and this one is a broader release pattern than the last one so local languages a really important.

Speaker Change: <unk>.

Speaker Change: He might have to try and make the experience better market it in more accessible for people.

Chad Beynon: Okay, thanks, Rich.

Natasha Fernandes: And then a quick housekeeping for Natasha. You mentioned the tax benefit or the tax impact from this quarter that was related to something last year. Is there anything else in the back half of the year? Or should we assume kind of a normal tax rate as that flows into free cash flow for the back half of the year?

Speaker Change: Okay. Thanks, Rich and then a quick housekeeping for Natasha you mentioned the <unk>.

Speaker Change: Part of our diversity of content and in a way you see how Netflix has used really intelligently to grow their network and I think we're going to continue to lean in in a big way alternative content. While important is less of a game changer and there are few reasons for that one.

Richard Gelfond: Local language is a really important part of our diversity of content. And in a way, you see how Netflix has used it really intelligently to grow their network, and I think we're going to continue to lean in in a big way. Alternative content, while important, is less of a game changer, and there are a few reasons for that. One is, it generally has a shorter play time, and it also could conflict with studio offerings. For example, again, back to this coming weekend with Fantastic Four opening, if we had a live event or a different kind of alternative content, the studios are obviously going to want to play what they've contracted to get. It's more of a filler than it is kind of something that's going to carry the programming.

Speaker Change: Tax.

Speaker Change: The tax impact from this quarter that was related to something last year is there anything else in the back half of the year should we assume kind of a normal tax rate as that flows into free cash flow for the back half of the year.

Natasha Fernandes: Chad, I mean, our internal asset reorganization that we did last year, that's essentially what you're seeing come through this year, Q1 had a higher tax rate, Q2 has come down significantly, and we're aiming towards just simply having an effective tax rate for the entire year, as we said before. And so that's our goal, as opposed to where we've been Great, thank you both.

Speaker Change: Yeah, Chad I mean, our internal asset reorganization that we did last year, that's essentially what youre seeing come through this year Q1 had a higher tax rate Q2 has come down significantly and we're aiming towards just simply having an effective tax rate for the entire year.

Speaker Change: Is it generally has a shorter play time.

Speaker Change: And.

Speaker Change: It also could conflict with studio offerings. So for example, again back to this coming weekend with fantastic for opening if we had a live event or a different kind of alternative content.

Speaker Change: As we said before that.

Speaker Change: Those are obviously going to want to play with a contracted to get so it's more of a.

Speaker Change: That's our goal as opposed to where we've been historically.

Beth: Great. Thank you Beth.

Speaker Change: Pillar than it is kind of a something that's going to carry the programming.

Beth: Thank you.

Operator: All right, now our next question comes from Eric Handler with Roth Kappa. Good morning. Thank you for the question. Rich, a big picture question for you. As you think about your ultimate product mix between Hollywood movies, local language, alternative content, like, where are you with alternative content and like the number of events that you're doing a year? How are you seeing like the average revenue prevent scale higher? You know, just the opportunities there with those and you know, where would you like to see the local language? percentage B for overall box office as well. Yeah, so, so far, Eric, this year, our percentage of local language content is around 40%, which is much higher than historically.

Speaker Change: All right and our next question comes from Eric Handler with Roth capital.

Speaker Change: With that said I think we have something like seven of music events coming up.

Eric Handler: Good morning. Thank you for the question Rich Big Picture question for you as you think about your ultimate product mix between Hollywood movies local language alternative content like we are.

Richard Gelfond: With that said, I think we have something like seven music events coming up in the next few months. We have the Dead & Company coming up in the next few weeks. We have a Prince concert we just announced. I believe we haven't announced it, but we'll likely re-release The Rolling Stones movie later in the year. There's just a lot of high-quality content, and there's a lot of interest in the music community to have more of it. I think it's good. Last year, we did League of Legends in China. I think you'll see us do some other gaming things around the world now. I think we're still in somewhat of a test phase. We look at what the ROI is on each event.

Speaker Change: In the next few months, so we have the debt and company coming up in the next few weeks, we have a prince.

Speaker Change: We just announced.

Eric Handler: Where are you with alternative content and like the number of events that youre doing the year.

Speaker Change: I believe we're going to we haven't announced it but will likely we released the rolling stones moving later in the year is this a lot of high quality content and.

Eric Handler: How are you seeing like the average revenue prevent scale higher.

Eric Handler: Just the opportunities there with those and where would you like to see the local language.

Speaker Change: There's a lot of interest in the music community to have more of it. So I think it's good.

Eric Handler: Percentage being for overall box office as well.

Speaker Change: Last year, we did league of legends in China, I think Youll see us do some other gaming things around the world now and.

Eric Handler: Yes, so so far Eric this year, our percentage of local language content.

Eric Handler: Around 40%, which is much higher than historically its been closer to around 20% in the prior couple of years, but obviously not too distorted that to the upside a little bit, but if you think about that.

Speaker Change: And I think we're still in somewhat of a test phase. So we look at what the ROI is on each event, we are leaning into it for the right events, but I just don't think it will have the same financial impact that either the Hollywood slate does do or the local language slate.

Eric Handler: It's been closer to around 20 in the prior couple of years. But obviously, Nezha, too, distorted that to the upside a little bit. But if you think about that, you know, look at, like, the North American exhibitors, for example, it's close to zero. Their percentage for local language content, and I think one of the superpowers of Imax is our ability to get these films from all over the world. And, you know, your timing is good for the question, because Demon Slayer just opened in Japan, and we set an all time record for Japan, and we're actually releasing Demon Slayer in 40 other countries.

Richard Gelfond: We are leaning into it for the right events, but I just don't think it'll have the same financial impact that either the Hollywood slates does do or the local language slate.

Eric Handler: Look at the North American exhibitors for example, it's close to zero there percentage for local language content and I think one of the superpowers of IMAX is our ability to get these films from all over the world.

Speaker Change: That's helpful and also I mean, since you mentioned demas German you've had good success with several enemy movies in the past, but it seems a bit sporadic I have no idea how big the global market is for MMA.

Eric Handler: That's helpful. Also, since you mentioned Demon Slayer, you've had good success with several anime movies in the past, but it seems a bit sporadic. I have no idea how big the global market is for anime annually. Given the success you have you started talking with some of the anime companies about collaborations in the future and maybe increasing the amount of anime that you're seeing on the screens?

Eric Handler: Your timing is good for the question because demon Slayer, just opened in Japan, and we set an all time record for Japan, and we are actually releasing demon Slayer, an 40 40 other countries and.

Speaker Change: Annually.

Speaker Change: But given the success you have have you started talking with some of the MMA companies about.

Speaker Change: Collaborations in the future and maybe increasing the amount of anime that youre seeing on the screens.

Richard Gelfond: And the last Demon Slayer did 30 million dollars, and this one is a broader release pattern than the last one. So, local language is a really important part of our diversity of content. And in a way, you see how Netflix has used it really intelligently to grow their network. And I think, you know, we're gonna continue to lean in in a big way. Alternative content, while important, is less of a game changer, and there are a few reasons for that. One is, you know, it generally has a shorter play time, and it also could conflict with studio offerings.

Eric Handler: The last few months later did $30 million and this one is a broader release pattern.

Eric Handler: Well Eric.

Eric Handler: Last one so local languages are really important.

Speaker Change: Going through the past.

Speaker Change: Didn't mention his job to which did $160 million in IMAX and <unk>.

Richard Gelfond: Well, Eric, in going through the past, you didn't mention "Jojo 2," which did $160 million in IMAX and was an animated film as well. You're right, we have had a lot of success, particularly with anime on a global basis. It originates in Japan, or most of it does, and then we've been successful not only in Japan, but in the US and China, and a number of other markets with it. We do a pretty good track record. Again, we've done pretty well even with some Hollywood movies. The Illumination ones, we've done very well with, "Despicable Me" and movies like that. We've done really well with some Pixar, Disney movies and others. I think we're leaning into the right kind of animation. When we look at a movie, we don't say, "Oh, that's an animated one.

Eric Handler: Part of our diversity of content.

Eric Handler: In a way you see how Netflix has used it really intelligently to grow their network and I think we're going to continue to lean in in a big way alternative content. While important is less of a game changer and there are few reasons for that one is it.

Speaker Change: What's an animated film as well so you're right. We have got a lot of success, particularly with anime on a global basis. So it originates in Japan.

Or most of it does and then we've been successful not only in Japan, but in the U S and China and a number of other markets.

Eric Handler: Generally has a shorter play time.

Eric Handler: <unk>.

Speaker Change: So we do a pretty good track record, but again, we've done pretty well, even with some Hollywood movies, the illumination ones, we've done very well with Despicable me and.

Speaker Change: It also could conflict with studio offerings. So for example, again back to this coming weekend with fantastic for opening if we had a live event or a different kind of alternative content. The studios are obviously going to want to play what they've contracted to get so it's more of a what.

Richard Gelfond: So, for example, again, back to this coming weekend with Fantastic Four opening, if we had a live event or a different kind of alternative content, the studios are obviously gonna want to play what they've contracted to get. So, it's more of a filler than it is kind of something that's gonna carry the program. With that said, I think we have something like seven music events coming up, you know, in the next few months. So we have the Dead End Company coming up in the next few weeks. We have a Prince concert we just announced. I believe we're going to, we haven't announced it, but we'll likely, we release a Rolling Stones movie later in the year.

Speaker Change: Movies like that and we've done really well with some Pixar Disney movies and others. So I think we're leaning in to the right kind of animation and when we look at a movie we don't say Oh, that's an animated one let's go for that I think it depends on the kind of content we have.

Speaker Change: Pillar than it is kind of a something thats going to carry the programming.

Speaker Change: With that said I think we have something like seven of music events coming up.

Richard Gelfond: Let's go for that. I think it depends on the kind of content. We have pretty good relationships with the anime studios and the animated studios globally, and we've always valued it and for the right movies, we'll continue to lean into it.

Speaker Change: Pretty good relationships with the anime studios in the animated studios globally, and we've always valued at and for the right movies will continue to lean into it.

Speaker Change: In the next few months, so we have the dead and company coming up in the next few weeks, we have a prince.

Speaker Change: We just announced.

Speaker Change: I believe we're going to we haven't announced it but will likely we released the rolling stones moving later in the year, there's just a lot of high quality content and.

Speaker Change: Great. Thank you.

Eric Handler: Great. Thank you.

Richard Gelfond: There's just a lot of high quality content. And There's a lot of interest in the music community to have more of it. So I think it's good. You know, last year we did League of Legends in China. I think you'll see us do some other gaming things around the world now. And I think we're still in somewhat of a test phase. So we look at what the ROI is on each event. You know, we are leaning into it for the right events, but I just don't think it'll have the same financial impact that either the Hollywood Slates does do or the local language.

Speaker Change: Thank you.

Speaker Change: And to allow for everybody in the queue to participate if you could please limit your questions limit yourself to one question. Our next question comes from Eric Wold with Texas Capital Securities.

Operator: Thank you. To allow for everybody in the queue to participate, if you could please limit yourself to one question. Our next question comes from Eric Wold with Texas Capital Securities.

Speaker Change: There's a lot of interest in the music community to have more of it. So I think it's good.

Speaker Change: Last year, we did league of legends in China, I think Youll see us do some other gaming things around the world now and.

Speaker Change: Yeah.

Eric Wold: Thanks, Good morning.

Speaker Change: Rich good question.

Eric Wold: Thanks. Good morning. Hey, Rich. A quick question for you. I know there's been, at least there was at CinemaCon and a little bit since then, some call for lower pricing by some of the studios on tickets. We've had the move by AMC recently to add to the Discount Tuesdays and move to the 50% off on Wednesdays. Just want to get your thoughts on what you think that could do for IMAX going forward. I think it's early. I know that their 50% just went into effect at the start of this month, or on 9 July.

Speaker Change: Ben.

Speaker Change: And I think we're still in somewhat of a test phase. So we look at what the ROI is on each event.

Ben: Let me start wasn't cinema Khan, and some a little bit to incentives some coal for.

Speaker Change: Leaning into it for the right events, but I just don't think it'll have the same financial impact that either the Hollywood slate does do or the local language slate.

Ben: Lower pricing by some of the studios on takeaway.

Ben: We've had to move by by AMC.

Ben: <unk> kind of you kind of add to the discount Tuesdays and moved to.

Ben: Is it 50% off on Wednesdays.

Richard Gelfond: That's helpful. And also, I mean, since you mentioned Demonster, I mean, you've had good success with several anime movies in the past, but it seems a bit sporadic. I have no idea how big the global market is for anime annually, but given the success you have, have you started talking with some of the anime companies about, you know, Well, Eric, you know, in going through the past, you didn't mention the Ja2, which did $160 million in Imax and was an animated film as well. So you're right, we have had a lot of success, particularly with anime on a global basis.

Speaker Change: That's helpful and also I mean, since you mentioned demas German you've had good success with several enemy movies in the past, but it seems a bit sporadic I have no idea how big the global market is for MMA.

Ben: Just kind of get your thoughts on what you think that could do kind of for IMAX going forward I think it's early I know that there are 50% just went into effect at the start of this month or on the ninth July but do you think.

Ben: Moving to lower price, if that becomes kind of more than norm mid week across the board not just with AMC.

Speaker Change: Annually.

Eric Wold: Do you think moving to lower pricing, if that becomes more the norm midweek across the board, not just with AMC, but with more of your exhibitor partners, does that give more of an incentive to maybe that cohort of moviegoers that may have been more not willing to pay up for IMAX previously to now need more incentive to try out IMAX, given that the baseline price is cheaper and maybe the adding on IMAX may be more agreeable to them? Maybe you can tap into a moviegoer base that you may not have been able to before, and that could be maybe a little of a tailwind towards your market share potential, moviegoer awareness longer-term.

Speaker Change: But given the success you have have you started talking with some of the MMA companies about.

Ben: Mortgage exhibitor partners.

Speaker Change: Collaborations in the future and maybe increasing the amount of anime that youre seeing on the screens.

Ben: That give more of an incentive to.

Ben: Maybe that cohort of movie door that may have been more.

Eric Handler: Well Eric.

Ben:

Speaker Change: Going through the past.

Ben: Not willing to pay up for IMAX previously to now meet more incentive to try out IMAX given that the baseline pricing cheaper than maybe the adding onto IMAX maybe more.

Speaker Change: Didn't mention his job to which did $160 million in IMAX and <unk>.

Speaker Change: What's an animated film as well so you're right. We have had a lot of success, particularly with anime on a global basis. So it originates in Japan.

Ben: Agreeable to them and maybe you can kind of tap into a moviegoer base that you may not have been able to before and it could be.

Richard Gelfond: So it originates in Japan, or most of it does. And then we've been successful not only in Japan, but in the US and China and a number of other markets with it. So we do a pretty good track record. But again, we've done pretty well, even with some Hollywood movies, the Illumination ones, we've done very well with Despicable Me and movies like that. And we've done really well with some Pixar, Disney movies and others. So I think we're leaning in to the right kind of animation. I don't when we look at a movie, we don't say, oh, that's an animated one.

Speaker Change: Or most of it does and then we've been successful not only in Japan, but in the U S and China and a number of other markets.

Ben: Maybe a little bit of tailwind towards your.

Ben: Your market share potential kind of moviegoer awareness.

Ben: Longer term.

Speaker Change: With it so we do a pretty good track record, but again.

Eric Wold: So Eric I think the IMAX consumer over the years has shown that it's willing to pay a premium price for a premium experience and look at.

Speaker Change: Done pretty well, even with some Hollywood movies, the illumination ones.

Richard Gelfond: Eric, I think the IMAX consumer over the years has shown that it's willing to pay a premium price for a premium experience. Look at this year right now. I know we reported the quarter, but our business has been extremely strong since then. We're around $700 million now, and it's not even the end of July yet. I think our pricing formula is working pretty well for us. Especially another example I would give you is that, as you know, The Odyssey tickets went on sale for certain of the film theaters, and this is for a movie that's opening 1 year from now. Especially film is something that the exhibitors don't really like to discount, and it virtually sold out within 24 hours, in some cases, much shorter time than that, minutes.

Speaker Change: Done very well at the <unk>.

Ben: At this year right now.

Speaker Change: Movies like that and we've done really well with some Pixar Disney movies and others. So I think we're leaning in to the right kind of animation what when you look at a movie we don't say Oh, that's an animated one let scope for that I think it depends on the kind of content and we have pretty good really.

Ben: We reported a quarter, but our business has been extremely strong since then and.

Ben: We're around $700 million now and it's not even the end of July.

Ben: I think our pricing formula is working pretty well.

Richard Gelfond: Let's go for that. I think it depends on the kind of content and we have pretty good relationships with the anime studios and the animated studios globally. And we've always valued it and for the right movies, we'll continue to lean into it.

Ben: For us and especially another example, I would give you is that as you know.

Speaker Change: <unk> chips with the anime studios and the animated studios globally, and we've always valued and for the right movies will continue to lean into it.

Ben: The Odyssey tickets went on sale.

Ben: For certain of the film theaters and this is for a movie Thats opening a year from now and especially film is something that the exhibitors don't really like the discount and it virtually sold out within 24 hours in some cases.

Speaker Change: Alright, thank you.

Operator: Thank you. And to allow for everybody in the queue to participate, if you could please limit yourself to one question.

Speaker Change: Thank you.

Speaker Change: And to allow for everybody in the queue to participate if you could please limit your questions limit yourself to one question. Our next question comes from Eric Wold with Texas Capital Securities.

Speaker Change: Much shorter time than that minutes. So I, just don't think that the premise that lower prices or that.

Eric Wold: Our next question comes from Eric Wold with Texas Capitol Security. Thanks, good morning. Hey, Rich, a quick question for you. I know there's been, at least there was at CinemaCon and a little bit since then, some call for lower pricing by some of the studios on tickets, and we've had to move by AMC recently to kind of add to the discount Tuesdays and move to the 50% off on Wednesdays. Just kind of get your thoughts on what you think that could do kind of for Imax going forward. I think it's early. I know that their 50% just wouldn't affect at the start of this month or on the 9th of July, but do you think moving to lower pricing, if that becomes kind of more the norm midweek across the board, not just with AMC, but with more of your exhibitor partners, does that give more of an incentive?

Richard Gelfond: I don't think the price we charge is keeping people away. I think people recognize it's a premium experience and they're willing to pay for it. You look at analogies such as sports ticketing or concert ticketing or other kinds of entertainment, and I think the trends go the other way. I understand why the exhibitors do it. They have huge capacity and in fact, in certain cities, probably overbuilt, and I think they're competing with other exhibitors for traffic in those markets, and that's what's driving rethinking the discount days. IMAX has exclusivity zones. We have IMAX film. We have filmmakers leaning in. Extra costs in making an IMAX film. I just don't think discounting is likely to change the dynamic.

Speaker Change: Okay.

Speaker Change: I'll rephrase it I don't think the price we charge is keeping people away I think people recognize it.

Eric Wold: Thanks, Good morning.

Speaker Change: Rich quick question for you I know it's been.

Speaker Change: Yeah.

Speaker Change: Let me say it wasn't silicon and some a little bit to incentives some coal for.

Speaker Change: <unk> experience and they're willing to pay for it.

Speaker Change: You look at analogies, such as sports ticket concert ticketing or.

Speaker Change: Lower pricing by some of the studios on takeaway.

Speaker Change: Had to move by by AMC.

Speaker Change: Other kinds of entertainment and I think the trends go the other way I think I understand why the exhibitors do it.

Speaker Change: <unk> kind of you kind of add to the discount Tuesdays and moved to.

Speaker Change: Is it 50% off on Wednesdays.

Speaker Change: Have a huge capacity and in fact.

Speaker Change: Just kind of get your thoughts on what you think that could do for IMAX going forward I think it's early I know that there are 50% just went into effect at the start of this month or on the 19th of July but do you think move.

Speaker Change: In certain cities, probably overbuilt and I think they are competing with.

Speaker Change: Other exhibitors for traffic in those markets and Thats that is whats driving rethinking the discount days, but IMAX has exclusivity zones.

Speaker Change: Moving to lower pricing, if that becomes kind of more than norm mid week across the board not just with AMC.

Speaker Change: IMAX film, we are filmmakers leaning in.

Speaker Change: Mortgage exhibitor partners.

Speaker Change: Extra costs, and making an IMAX film and I, just don't think I'm discounting is likely to change the dynamic.

Speaker Change: Does that give more of an incentive could.

Richard Gelfond: to maybe that cohort of moviegoers that may have been more not willing to pay up for Imax previously and now need more incentive to try out Imax given that the baseline price is cheaper and maybe the adding on Imax may be more agreeable to them. And maybe you can kind of tap into a moviegoer base that you may not have been able to before and that could be maybe a little of a tailwind towards your market share potential kind of moviegoer awareness kind of longer term.

Speaker Change: Maybe that cohort of movie doors that may have been more.

Speaker Change: Not willing to pay up for IMAX previously to now meet more incentive to try out IMAX given at the baseline pricing cheaper than maybe the adding an IMAX maybe more.

Speaker Change: Thank you. Our next question comes for next question comes from Steven Frankel with Rosenblatt Securities.

Operator: Thank you. Our next question comes from Steven Frankel with Rosenblatt Securities.

Steven Frankel: Good morning ritual and go back quickly to the kind of alternative content discussion you had wired a group of theaters for live events, maybe give us an update on.

Speaker Change: Agreeable to them and maybe you can kind of tap into a moviegoer base that you may not have been able to before and that could be maybe.

Steven Frankel: Good morning, Rich. I want to go back quickly to the alternative content discussion. You had wired a group of theaters for live events. Maybe give us an update on how many.

Speaker Change: Maybe a little tailwind towards your.

Speaker Change: How many.

Speaker Change: Your market share potential kind of movie goer awareness.

Speaker Change: Are you able to do that today and do you have plans to grow that network any further.

Speaker Change: Longer term.

Richard Gelfond: So, Eric, I think the Imax consumer over the years has shown that it's willing to pay a premium price for a premium experience. And, you know, look, at this year right now, I mean, I know we reported the quarter, but our business has been extremely strong since then. And, you know, we're around 700 million dollars now, and it's not even the end of July yet. So, you know, I think our pricing formula is working pretty well for us. And especially another example I would give you is that, as, you know, the Odyssey tickets went on sale for certain of the film theaters.

Steven Frankel: are able to do that today, and do you have plans to grow that network any further?

Speaker Change: So Eric I think the IMAX consumer over the years has shown that it's willing to pay a premium price for a premium experience and look at.

Speaker Change: So we wire I don't remember exactly the number its around 200 theaters I think a little bit more.

Richard Gelfond: I don't remember exactly the number, it's around 200 theaters, I think a little bit more, because that was the way to distribute alternative content. Since we acquired SSIMWAVE, using their technology, we came up with an alternative way to deliver alternative content, and that way is by streaming. It's a much more cost-effective way than wiring it. You don't have the upfront cost of having to put the special cabling in. In fact, for the event we did in China around the League of Legends, that was a completely streamed event, and we did over 150 theaters, and we were able to put that together really quickly, and that one virtually sold out at a higher price.

Speaker Change: Because that was the way to distribute alternative content.

Speaker Change: At this year right now.

Speaker Change: Since we acquired sym ways using their technology.

Speaker Change: We reported a quarter, but our business has been extremely strong since then and.

Speaker Change: Came up with an alternative way to deliver alternative content and that way is by streaming and it's a much more cost effective way and wiring. It you don't have the upfront cost of having to put all of that put the special K.

Speaker Change: We're around $700 million now and it's not even the end of July yet so I think our pricing formula is working pretty well.

Speaker Change: For us and especially another example, I would give you is that as you know.

Speaker Change: The Odyssey tickets went on sale.

Speaker Change: Cabling and and in fact for the event and in China.

Speaker Change: For certain of the film theaters and this is for a movie Thats opening a year from now and especially film is something that the exhibitors don't really like the discount and it virtually sold out within 24 hours in some cases.

Richard Gelfond: And this is for a movie that's opening a year from now, and especially film is something that the exhibitors don't really like to discount and it virtually sold out within 24 hours in some cases. You know, much shorter time than that minute. So I just don't think that the premise that lower prices, or that, I'll rephrase it, I don't think the price we charge is keeping people away. I think people recognize it's a premium experience and they're willing to pay for it. And you look at analogies such as sports ticketing or concert ticketing or other kinds of entertainment.

Speaker Change: Around the league of legends that was a completely streamed event and we did.

Speaker Change: Over 150 theaters, and we were able to put that together really quickly and that one virtually sold out at a higher price. So it's a long way of saying I think we are going to do it for more theaters, but I don't think we will have to put up the capital like we did at the beginning because we are able we were able to.

Speaker Change: Much shorter time than that minutes. So I, just don't think that the premise that lower prices for that.

Richard Gelfond: It's a long way of saying, I think we are going to do it for more theaters, but I don't think we'll have to put up the capital like we did at the beginning, because we were able to find a more cost-effective way of doing it. I think you'll see the base expanding, but not with a large cost associated with it.

Speaker Change: I'll rephrase it I don't think the price we charge is keeping people away I think people recognize its a premium experience and they're willing to pay for it.

Speaker Change: <unk>, a more cost effective way of doing it and I think youll see youll see the base, expanding but not with a large cost associated with it.

Speaker Change: You look at analogies, such as sports ticket concert ticketing or.

Speaker Change: Great. Thank you.

Speaker Change: Other kinds of entertainment and I think the trends go the other way I think I understand why the exhibitors do it.

Eric Wold: And I think the trends go the other way. I understand why the exhibitors do it. They have huge capacity. And in fact, in certain cities, probably overbuilt. And I think they're competing with other exhibitors for traffic in those markets. And that's what's driving rethinking the discount days. But Imax has exclusivity zones. We have Imax Film, we have filmmakers leaning in. You know, extra costs and making an Imax Film. And I just don't think a discounting is likely to change the dynamic. Thank you.

Steven Frankel: Great. Thank you.

Mike Hickey: And our next question comes from Mike Hickey with the benchmark company.

Operator: Thank you. Our next question comes from Mike Hickey with The Benchmark Company.

Speaker Change: Have huge capacity and in fact, yes.

Speaker Change: In certain cities, probably overbuilt and I think they are competing with.

Mike Hickey: Hey, Rich latasha, Jennifer Thanks for taking our questions and congrats on a strong Q2 rich just two from US film visibility Rich's I think probably.

Mike Hickey: Hey, Rich, Natasha, Jennifer. Thanks for taking our questions, and congrats on a strong Q2, Rich. Just two from us. Film visibility, Rich, is, I think, probably the best it's ever been for you. Just curious, as we sort of get into the H2 of 2025, your confidence level that you can grow your GBO in 2026. I have a quick follow-up.

Speaker Change: Other exhibitors for traffic in those markets and Thats that is whats driving rethinking the discount days, but IMAX has exclusivity zones.

Mike Hickey: The best it's ever been for you just curious as you sort of get into the second half of 'twenty five your confidence level there.

Speaker Change: IMAX film, we are filmmakers filling in.

Mike Hickey: You can grow your <unk> in 2000.

Speaker Change: Extra costs, and making an IMAX film and I, just don't think I'm discounting thats likely to change the dynamic.

Mike Hickey: In 2006, and I have a quick follow ups.

Mike Hickey: Yes, Mike I may not have an incredible amount of confidence in that because some are 26 slate is almost all filled up and.

Richard Gelfond: Yeah, Mike. I have an incredible amount of confidence in that because our 2026 slate is almost all filled up, and just some of the high points, we have the Avatar carryover in early 2026, and got number of other good films there, including Project Hail Mary from Amazon MGM Studios. In Q2, we've got The Super Mario Bros. Movie 2, we've got the new The Mandalorian & Grogu, we've got Toy Story 5, Supergirl in Q3. Obviously, the most anticipated one is The Odyssey from Christopher Nolan. We've got Moana, back to Eric's question. We've got Minions 3. In Q4, we have Narnia: The Magician's Nephew, we have Avengers, we have Dune: Part Three. This far in advance, it's unusual to have it virtually all locked in.

Steven Frankel: Our next question comes from Steven Frankel with Rosenblatt Security.

Speaker Change: Thank you. Our next question comes for next question comes from Steven Frankel with Rosenblatt Securities.

Mike Hickey: Some of the high points, we have the avatar carryover.

Richard Gelfond: Good morning, Rich. I want to go back quickly to the alternative content discussion. You had wired a group of theaters for live events. Maybe give us an update on... How many are able to do that today and do you have plans to grow that network any further? So we wired, I don't remember exactly the number, it's around 200 theaters, I think a little bit more, because that was the way to distribute alternative content. Since we acquired SimWave using their technology, we came up with an alternative way to deliver alternative content, and that way is by streaming.

Mike Hickey: Early 'twenty six and number of other good films, there, including project held Marais from Amazon and MGM in the second quarter, We've got Super Mario Brothers to we've got the New Star Wars, and Oregon, We've got toy story five Super girl in the third quarter.

Steven Frankel: Good morning, Rich you want to go back quickly to the alternative content discussion you had wired a group of theaters for live events, maybe give us an update on.

Speaker Change: How are you.

Speaker Change: Any.

Speaker Change: Are you able to do that today and do you have plans to grow that network any further.

Speaker Change: So we wire I don't remember exactly the number its around 200 theaters I think a little bit more.

Mike Hickey: Obviously, the most anticipated one is the Odyssey from Chris Nolan, We got in Atlanta back to Eric's question. We've got minions three in the fourth quarter. We are at <unk>. We have Avengers, we have due in part III. So this far in advance.

Speaker Change: Because that was the way to distribute alternative content.

Speaker Change: Since we acquired sym wave using their technology.

Speaker Change: Came up with an alternative way to deliver alternative content and that way is by streaming and it's a much more cost effective way than wiring that you don't have the upfront cost of having to put all of that put the special K.

Mike Hickey: <unk>.

Mike Hickey: It's unusual to have it.

Mike Hickey: Virtually all opt in and then for 2007 I think I said this earlier.

Richard Gelfond: And it's a much more cost effective way than wiring it. You don't have the upfront costs of having to put all that, you know, put the special cabling in. And in fact, for the event we did in China around the League of Legends, that was a completely streamed event, and we did over 150 theaters, and we were able to put that together really quickly. And that one virtually sold out at a higher price. So it's a long way of saying, I think we are going to do it for more theaters, but I don't think we'll have to put up the capital like we did at the beginning, because we were able to find a more cost effective way of doing it.

Richard Gelfond: For 2027, I think I said this earlier we not only have a number of films locked in, but we have at least that are Filmed for IMAX films in that. I would say there hasn't been a point in history where we've had this much locked in 1 and 2 years in advance. Obviously, we have our theater backlog as well. As we talked about in our remarks, signings and installs are going very well. I think that all of those things give us confidence about 2026 and beyond.

Mike Hickey: Not only have a number of films locked in but we haven't leased at.

Speaker Change: IMAX film film, Brian Thats films in that so I would say.

Speaker Change: Cabling and and in fact for the event and in China.

Mike Hickey: There hasnt been a point in history, where we.

Mike Hickey: Had this much locked in one and two years in advance obviously, we have our theater backlog as well.

Speaker Change: Around the league of legends that was a completely streamed event and we did.

Speaker Change: Over 150 theaters, and we were able to put that together really quickly and that one virtually sold out at a higher price.

Mike Hickey: As we talked about in our remarks signings and installs are going very well.

Mike Hickey: Thanks to all of those things give us confidence about 2006 and beyond.

Speaker Change: It's a long way of saying I think we are going to do it for more theaters, but I don't think we will have to put up the capital like we did at the beginning because we were able we were able to find a more cost effective way of doing it and I think youll see youll see the base, expanding but not with a large cost associated with it.

Mike Hickey: Nice thanks, rich that's a good sort of segue to installations. It looks like you raised your installation guidance for.

Mike Hickey: Nice. Thanks, Rich. That's a good sort of segue to installations. It looks like you raised your installation guidance for 2025. Obviously, your signings have been spectacular. Also nice to see some installation growth from the US, which is obviously your strongest market. Do you think this momentum here, Rich, in installations can continue into 2026? Are you sort of maybe pulling forward some demand here from your exhibitor partners, just given the strength of 2025, certainly the buzz of Avatar 3, and as you just highlighted, an exceptional 2026 film slate?

Richard Gelfond: And I think you'll see the base expanding, but not with a large cost associated.

Mike Hickey: 25, obviously youre signings have been spectacular also nice to see some installation growth.

Mike Hickey: The U S, which is obviously your strongest market do you think this momentum here rich in installations can continue into 2006 or are you sort of maybe pulling forward some.

Speaker Change: Great. Thank you.

Michael Hickey: Thank you. And our next question comes from Mike Hickey with The Benchmark Company. Hey Rich, Natasha, Jennifer, thanks for taking our questions and congrats on a strong Q2, Rich. Just two from us, film visibility, Rich, is I think probably the best it's ever been for you. Just curious, as we sort of get into the second half of 25, your confidence level that you can grow your GVO in 2026. And I have a quick follow-up.

Mike Hickey: And our next question comes from Mike Hickey with the benchmark company.

Mike Hickey: Some demand here from your exhibitor partners just given the strength of 25, certainly the buzz of.

Speaker Change: Hey, Richard Kasha, Jennifer Thanks for taking our questions and congrats on a strong Q2 rich just two from US film visibility Rich's I think probably.

Mike Hickey: Avatar three and as you just highlighted an exceptional 26 film slate.

Mike Hickey: The best it's ever been for you just curious as you sort of get into the second half of 'twenty five your confidence level.

Mike Hickey: I think both in a way Mike So I think yes. Some people are installing earlier because they see the back end of the year, which obviously.

Richard Gelfond: I think both, in a way, Mike. I think, yes, some people are installing earlier because they see the back end of the year, which obviously, Avatar stands out, but also Zootopia is there, which especially internationally has a strong following, and then Wicked, Predator, Running Man. There's a lot of things still to come. By the same token, we've almost equaled all the signings we had for the whole year last year. While some are being pulled forward, the backlog is being replenished with the new theaters coming online. The pace we're on is certainly very strong. I think it's both. I think it's new ones coming into the queue as well as ones moving forward.

Mike Hickey: You can grow your <unk> in 2000.

Mike Hickey: In 2006, and I have a quick follow ups.

Richard Gelfond: Yeah, Mike, I mean, I have an incredible amount of confidence in that because, you know, our 26th slate is almost all filled up. And, you know, just some of the high points, we have the Avatar carryover, you know, in early 26 and got a number of other good films there, including Project Hail Mary from Amazon MGM. In the second quarter, we've got Super Mario Brothers 2. We've got the new Star Wars, Mandalorian. We've got Toy Story 5, Supergirl in the third quarter. Obviously, the most anticipated one is the Odyssey from Chris Nolan. We've got Moana, back to Eric's question.

Mike Hickey: Avatar stands out but also zootopia is.

Mike Hickey: Yeah, Mike I mean, I have an incredible amount of confidence.

Mike Hickey: They are which especially internationally has a strong following and then.

Mike Hickey: That because some are 26 slate is almost all filled up and yes. It does.

Mike Hickey: <unk> predator running then a lot of things still to come but by the same token we are almost equal to all the signings we had for the whole year last year. So while some are being pulled forward. The backlog is being replenished with the new theatres coming online.

Mike Hickey: Some of the high points, we have the avatar carryover.

Mike Hickey: Early 2006 and number of other good films, there, including project Hail Mary from Amazon and MGM.

Mike Hickey: Current quarter, we've got Super Mario Brothers to we've got the New Star Wars <unk>, Oregon, We've got toy story five Super girl in the third quarter. Obviously, the most anticipated one is the Odyssey from Chris Nolan, we've gotten Atlanta back to Eric's question, We've got minions three.

Mike Hickey: This the pace. We're on is certainly very strong. So I think it's both I think its new ones coming in to the queue is ones as well as ones moving forward.

Mike Hickey: All right. Thanks, guys. Good luck.

Richard Gelfond: We've got Minions 3. In the fourth quarter, we have Narnia. We have Avengers. We have Dune Part 3.

Mike Hickey: Thank you.

Mike Hickey: Nice. Thanks, guys. Good luck.

Speaker Change: Our next question comes from drew Crum with B Riley Securities.

Mike Hickey: In the fourth quarter, we are at <unk>, we have Avengers, we have due in part III. So this far in advance.

Richard Gelfond: Thank you.

Operator: Our next question comes from Drew Crum with B. Riley Securities.

Richard Gelfond: So, this far in advance, it's, you know, it's unusual to have it, you know, virtually all locked in. And then for 27, I think I said this earlier, you know, we not only have a number of films locked in, but we have at least that are Imax film, film for Imax films in that. So, I would say, you know, there hasn't been a point in history where we've had this much locked in one and two years in advance. Obviously, we have our theater backlog as well. And as we talked about in our remarks, you know, signings and installs are going very well.

drew Crum: Okay. Thanks, Good morning, everyone. So you made a subtle upgrade to your adjusted EBITDA guidance for the year, you're sitting at just under 43% year to date can you discuss what the puts and takes are.

Mike Hickey: <unk>.

Mike Hickey: It's unusual tablet.

Drew Crum: Okay, thanks. Good morning, everyone. You made a subtle upgrade to your adjusted EBITDA guidance for the year. You're sitting at just under 43% year to date. Can you discuss what the puts and takes are for margins in the H2 and the drivers for achieving or perhaps exceeding that low 40s threshold? Thanks.

Mike Hickey: Virtually all of that and then for 2007 I think I said this earlier, we not only have a number of films locked in but we have at least that.

drew Crum: For margins in the second half and the drivers for achieving or perhaps exceeding that low $40 threshold.

Brian: IMAX film film, Brian Thats films in that so I would say.

Brian: There hasn't been a point in history, where we've had this much locked in one and two years in advance obviously, we have our theater backlog as well.

Speaker Change: Sure drew when we look at adjusted EBITDA.

Speaker Change: The first two quarters, we have been very consistent that our 42, 6%, but there's puts and takes that go into each quarter and whether that be the.

Natasha Fernandes: Sure, Drew. When we look at adjusted EBITDA, for the first 2 quarters, we've been very consistent at our 42.6%, but there's puts and takes that go into each quarter, and whether that be the incrementality we get from the box office as a positive, and then our decision-making on how much to spend on marketing, or a nature of mix between local language content and Hollywood content and the remastering costs that occur. Q1, for instance, was heavy on local language, which costs us less and leads to a significant EBITDA margin. Whereas you come to other quarters, like we'll have Avatar in Q4, there's an opportunity, as we've done before, where we would want to spend more on marketing for Avatar as it's such a huge film, and not only is it a 2025 impact, but it has a 2026 impact.

Brian: And as we.

Brian: We talked about it in our remarks signings and installs are going very well. So I think the all of those things give us confidence about 26 and beyond.

Richard Gelfond: So, I think that all of those things give us confidence about 26 and beyond. Nice. Thanks, Rich.

Speaker Change: The increment holiday to get them. The box office is a positive and then our decision making on how much to spend on marketing or nature of mix between local language content and Hollywood content and the remastering costs that occur and so.

Michael Hickey: Then that's a good sort of segue to installations.

Speaker Change: Nice. Thanks, Rich then that's a good sort of segue to installations. It looks like you raised your installation guidance for.

Michael Hickey: It looks like you raised your installation guidance for Twenty-five. Obviously, your signings have been spectacular. Also nice to see some installation growth from the U.S., which is obviously your strongest market.

Speaker Change: <unk> for instance, with heavy on local language, which cost us less and create.

Speaker Change: 25, obviously youre signings have been spectacular also nice to see some installation growth from the U S, which is obviously your strongest market do you think this momentum here rich in installations can continue into 2006 or are you.

Speaker Change: To a significant EBITDA margin, whereas the economy to other quarters like we will have avatar in Q4, and so there is an opportunity as we've done before where we would want to spend more on marketing for avatar is it as it's such a huge element not only into 2025 impact, but it hasnt impacted.

Richard Gelfond: Do you think this momentum here, rich in installations, can continue into twenty-six, or are you sort of maybe pulling forward some demand here from your exhibitor partners, just given the strength of twenty-five? Certainly, the buzz of Avatar 3, as you just highlighted, an exceptional twenty-six on slate. I think both, in a way, Mike. So, I think, yes, some people are installing earlier because they see, you know, the back end of the year, which obviously, you know, Avatar stands out, but also Zootopia is there, which especially internationally has a strong following. And then, you know, Wicked, Predator, Running Man, there's a lot of things still to come.

Speaker Change: Sort of maybe pulling forward.

Speaker Change: Some demand tiers from your exhibitor partners just given the strength of 25, certainly the buzz of.

Speaker Change: All of that comes with the decision is simply make an ebbing and flowing your marketing and <unk>.

Natasha Fernandes: All of that comes with the decisions you simply make on ebbing and flowing your marketing and how much content you push into each quarter.

Speaker Change: The top three and as you just highlighted an exceptional 26 film slate.

Speaker Change: How much content increases each quarter.

Speaker Change: I think both in a way Mike So I think yes. Some people are installing earlier because they see the back end of the year, which obviously.

Speaker Change: Thank you.

Speaker Change: And our next question comes from David Karnofsky with JP Morgan.

Operator: Thank you. Our next question comes from David Karnovsky with J.P. Morgan.

Speaker Change: Alright, Thanks, Rich maybe I'll just go back and ask one more about kind of a press report last week on the Pls.

Speaker Change: Avatar stands out but also zootopia.

David Karnovsky: All right. Thanks. Rich, maybe I'll just go back and ask one more about kind of the press report last week on the PLF. I suppose one of the takeaways from that report was that there's this undercurrent of tension between exhibitors and IMAX specifically around studios marketing towards the IMAX performance or even kind of your decision to play the Narnia film next Thanksgiving. I just want to give you a chance, like, to respond. Is that a fair assessment and how would you gauge your relationship with the kind of domestic exhibitor community currently? Thanks.

Speaker Change: <unk>, which especially internationally.

Speaker Change: I suppose one of the takeaways.

Speaker Change: Strong, calling and then WIC predator.

Speaker Change: From that report was that there is this undercurrent of tension between exhibitors in IMAX, specifically around studios marketing towards the IMAX performance or even kind of your decision to play of the Narnia film next Thanksgiving I just want to give you a chance to respond is that a fair assessment and kind of how would you gauge your relationship with.

Speaker Change: Credit are running there there's a lot of things still to come but by the same token we have almost equal to all the signings we had for the whole year last year. So while some are being a pull forward the backlog is being replenished with the new theatres coming online and.

Richard Gelfond: But by the same token, you know, we've almost equaled all the signings we had for the whole year last year. So, while some are being pulled forward, the backlog is being replenished with the new theaters coming online. And, you know, the pace we're on is certainly very strong. So, I think it's both. I think it's new ones coming in to the queue as well as ones moving forward.

Speaker Change: This the pace. We're on is certainly very strong. So I think it's both I think its new ones coming in to the queue is ones as well as ones moving forward.

Speaker Change: The kind of domestic exhibitor community currently thanks.

Speaker Change: I think it's excellent our biggest client AMC just signed a deal with us for additional theaters, including a bunch of new ones and they are leaning in and.

Richard Gelfond: I think it's excellent. Our biggest client, AMC, just signed a deal with us for additional theaters, including a bunch of new ones, and they're leaning in. I talked to Adam Aron after that story ran to get his perspective, and he basically felt that it was remote that any consortium was going to be put together in any way, and he certainly said he had zero interest in that. We also spoke with a number of the other big exhibitors that were in North America, and they reassured us that they're either in the IMAX business or want to be in the IMAX business. Regal just signed a big deal for us, 30 or 40 theaters. I think it's really good. How could it not be good?

Michael Hickey: Nice.

Michael Hickey: Thanks, guys.

Operator: Good luck.

Speaker Change: Alright, Thanks, guys. Good luck.

Speaker Change: Thank you.

drew Crum: Our next question comes from Drew Crum with B. Reilly Security. Okay, thanks.

Speaker Change: Our next question comes from drew Crum with B Riley Securities.

Speaker Change: I talk to Adam Aron after that story ran to get his perspective and he basically felt that it was remote that any consortium was going to be put together in any way is certainly <unk> zero interest in that we also spoke with a number of the other big exhibitors.

Natasha Fernandes: Good morning, everyone. So you made a subtle upgrade to your adjusted EBITDA guidance for the year. You're sitting at just under 43 percent year-to-date. Can you discuss what the puts and takes are for margins in the second half and the drivers for achieving or perhaps exceeding that low 40s threshold? Thanks. Sure, Drew, when we look at adjusted EBRA, I mean, for the first two quarters, we've been very consistent at our 42.6%, but there's puts and takes that go into each quarter and whether that be the incrementality we get from the box office as a positive, and then our decision making on how much to spend on marketing or a nature of mix between local language content and Hollywood content and the remastering costs that occur.

drew Crum: Okay. Thanks, Good morning, everyone. So you made a subtle upgrade to your adjusted EBITDA guidance for the year, you're sitting at just under 43% year to date can you discuss what the puts and takes are.

Speaker Change: That were.

drew Crum: For margins in the second half and the drivers for achieving or perhaps exceeding that low $40 threshold.

Speaker Change: In North America.

Speaker Change: Stay reassured us that.

Speaker Change: They're either in the IMAX business or want to be in the IMAX business.

drew Crum: <unk>.

drew Crum: Sure drew when we look at adjusted EBITDA.

Speaker Change: Regal just signed a big deal for us, 30% or 40 theaters.

drew Crum: Two quarters, we've been very consistent that our 42, 6%, but there's puts and takes that go into each quarter and whether that be.

Speaker Change: So I think it's really good I mean, how could it not be good I mean first of all look at Amc's market share as everybody reports this week in their market share is going to be excellent because theyre in the IMAX business and I think look at the box office that we brought in for our partners. So I think what the story did was it.

drew Crum: The increments holiday, we get from the box office is a positive and then our decision making on how much to spend on marketing or nature of mix between local language content and Hollywood content and the remastering of that occurring.

Richard Gelfond: First of all, look at AMC's market share as everybody reports this week, and their market share is going to be excellent because they're in the IMAX business. I think, look at the box office that we brought in for our partners. I think what the story did was it found people who aren't in the IMAX business, and obviously, if you were losing market share and losing money, you would be disgruntled. If I were them, I'd get into the IMAX business, rather than make up stories to try and convince investors they're going to compete with IMAX.

Natasha Fernandes: And so, you know, P1, for instance, was heavy on local language, which costs us less and creates and leads to a significant margin, whereas you come to other quarters, like, we'll have Avatar and Q4. And so there's an opportunity, as we've done before, where we would want to spend more on marketing for Avatar as it's such a huge film and not only is it a 2025 impact, but it has a 26 impact. And so all of that comes with the decision to simply make on ebbing and flowing your marketing and how much content you push into each quarter.

Speaker Change: Down people, who aren't in the IMAX business and obviously, if you are losing market share and losing money to you would be disgruntled. So if I were them I'd get into the IMAX business, rather than make up stories to try and convince investors they're going to compete.

drew Crum: Q1 for instance, with heavy on local language, which costs us less and create.

drew Crum: Leads to a significant either.

drew Crum: On a margin, whereas the economy to other quarters like will have avatar in Q4, and so there is an opportunity as we've done before where we would want to spend more on marketing for avatar is it at such a huge element not only into 2025 impact, but it hasn't done so.

Speaker Change: With IMAX one little one.

Speaker Change: I mean to pick on anybody, but there's yes.

Richard Gelfond: One little one, and I don't mean to pick on anybody, but there is an exhibitor in Europe called Vue that has actually been 2 restructurings in the last 3 years and missed the PLF boom, and they are launching their own PLF, which they announced in the trades is going to be a threat to IMAX. Good luck with that. People have been trying this. IMAX's been in business for 55 years, and we have technology, we have relationships. We have lots of competitive advantages, and it is almost like, and with no disrespect to Coke, if I came out and I said, I'm going to start a new soda brand, and I'm going to band together with others, and we're going to compete with Coke. The good news is, if you're Coke, it doesn't work that way. If you're IMAX, it doesn't work that way.

Speaker Change: And exhibitor in Europe called the view, that's actually been two restructurings in the last three years and Miss the PLO boom and they are launching their own pls, which they announced in the trades is going to be a threat to IMAX. So.

drew Crum: All of that comes with the decision is simply make an ebbing and flowing your marketing and how.

drew Crum: How much content, especially at each quarter.

drew Crum: Thank you.

Speaker Change: Good luck with that I mean people can try in this high and Thats been in business for 55 years, and we have technology, we have relationships, we have lots of competitive advantages in it it's almost like.

drew Crum: Thank you.

David Karnovsky: And our next question comes from David Karnovsky with JP Morgan. All right, thanks.

David Karnofsky: And our next question comes from David Karnofsky with JP Morgan.

Richard Gelfond: Rich, maybe I'll just go back and ask one more about kind of the press report last week on the PLF. You know, I suppose one of the takeaways, you know, from that report was that, you know, there's this undercurrent of tension between exhibitors and IMAX specifically around, you know, studios marketing towards the IMAX performance or even kind of your decision to play the Narnia film next Thanksgiving. I just want to give you a chance like to respond, is that a fair assessment and kind of how would you gauge your relationship with the kind of domestic exhibitor community currently?

Speaker Change: Alright, Thanks, Rich maybe I'll just go back and ask one more about kind of the press report last week on the Pls.

Speaker Change: Disrespect to Coke, if I came out I said I'm going to start a new soda brand then I'm going to band together with others. So we're going to compete with Coke I mean, the good news is if you're a coat it doesn't work that way and if your IMAX it doesn't work that way.

David Karnofsky: I suppose one of the takeaways.

David Karnofsky: From that report was that there's this undercurrent of tension between exhibitors in IMAX, specifically around studios marketing towards the IMAX performance or even kind of your decision to play or an art NFL next Thanksgiving.

Speaker Change: Thank you rich.

David Karnofsky: To give you a chance to respond is that a fair assessment and kind of how would you gauge your relationship with the kind of domestic exhibitor community currently thanks.

Speaker Change: Thank you.

David Karnovsky: Thank you, Rich.

Speaker Change: And our next question comes from Patrick show with Barrington Research.

Operator: Thank you. Our next question comes from Patrick Sholl with Barrington Research.

David Karnofsky: I think it's excellent our biggest client AMC.

Patrick show: Hi, Thanks for taking the question.

Speaker Change: Another question on like the backlogs in sidings.

Patrick Sholl: Hi. Thanks for taking the question. Just another question on the backlogs and signings. With the Regal agreement that you announced in May, you mentioned the 70-millimeter film projector. I was just wondering how many of those are in the backlog, and how those types of screens have performed with the Filmed for IMAX initiative. Just what other, I guess, would be puts and takes might go into that growth of that.

David Karnofsky: <unk> signed a deal with us for additional theaters, including a bunch of new ones and they are leaning in and.

Speaker Change: And with the Regal agreement that they do now.

Speaker Change: First in May.

David Karnofsky: I talked to him Aaron after that story ran to get his perspective and he basically felt that it was remote that any consortium was going to be put together in any way is certainly said he had zero inches to that we also spoke with a number of the other big exhibitors that were.

Speaker Change: You mentioned the $70 million 70 millimeter film projector I was just wondering how many of those are in the backlog and like how those types of.

Speaker Change: Screens have performed for the with the film for IMAX initiative.

Speaker Change: And just what other I guess it would be.

David Karnofsky: In North America.

Speaker Change: Puts and takes might go into that.

David Karnofsky: They reassured us that they are either in the IMAX business or want to be in the IMAX business.

Speaker Change: That growth of that.

Speaker Change: So on the film theatres have done extremely well when there is IMAX film releases. So this year for centers I mean, the numbers were incredibly strong because Ryan Krueger filmed with IMAX cameras, and Warner brothers put out film prints.

David Karnofsky: Regal just signed a big deal for US 30, or 40 theaters.

Richard Gelfond: The film theaters have done extremely well when there is IMAX film releases. This year for "Sinners," the numbers were incredibly strong because Ryan Coogler filmed with IMAX cameras, and Warner Brothers put out film prints, and they were extremely high capacity. Remember, we did over 20% in each of the 2 weekends on that initial weekends that we played it. Obviously, "Oppenheimer" last year, we all know how that movie performed very good. I mentioned the pre-ticket sales for "Odyssey." We are always looking. Now, we do not produce new film projectors because it is an older technology, and even though it brings in a lot of audiences, there are costs associated with it.

David Karnofsky: So I think it's really good I mean, how could it not be good I mean first of all look at Amc's market share as everybody reports this week in their market share is going to be excellent because they are in the IMAX business and I think look at the box office that we brought in for our partners. So I think what the story did was it.

Speaker Change: Sure.

Speaker Change: Extremely high capacity and remember what we did over 20% in each of the two weekends.

Speaker Change: Initial weekend stuff, we played it so and obviously Oppenheimer last year and we all know.

David Karnofsky: People, who aren't in the IMAX business and obviously, if you are losing market share and losing money you would be disgruntled. So if I were them I get into the IMAX business.

Speaker Change: How that movie performed very good I mentioned, a pre sales on a pre ticket sales for Odyssey.

David Karnofsky: Rather than make up stories to try and convince investors they're going to compete.

Speaker Change: So.

Speaker Change: We're always looking for now we don't produce new film projectors, because it's a older technology and even though it brings in a lot of audiences.

David Karnofsky: With IMAX one little one.

David Karnofsky: I don't mean to pick on anybody but there is.

David Karnofsky: And exhibitor in Europe called the view, that's actually been two restructurings in the last three years and Miss the Pls boom and they're launching their own pls, which they announced in the trades is going to be a threat to IMAX. So good.

Speaker Change: It's there are costs associated with it however, we've been scouring the globe and I do think for Odyssey will have more film theaters that we had four.

Richard Gelfond: However, we've been scouring the globe, and I do think for "The Odyssey" we'll have more film theaters than we had for the last film release, "Sinners," or Christopher Nolan's last movie, "Oppenheimer." We're trying to address that issue, but there's a limited supply and the economics are terrific around it.

Speaker Change: The last film releases centers or Knoll and his last movie.

David Karnofsky: Good luck with that I mean people can try on this that's been in business for 55 years.

Speaker Change: Oppenheimer.

Speaker Change: We're trying to address that issue, but there is a limited supply and the economics are terrific around them.

David Karnofsky: <unk> technology, we have relationships, we have lots of our competitive advantages and it it's almost like.

Speaker Change: Okay. Thank you.

David Karnofsky: Disrespect to Coke, if I came out I said I'm going to start a new soda brand on that.

Patrick Sholl: Okay. Thank you.

Speaker Change: Our next question comes from Steven last check with GFS.

David Karnofsky: Band together with others, so we're going to compete with Coke.

Operator: Our next question comes from Stephen Laszczyk with GS.

Steven Frankel: Hey, thanks.

David Karnofsky: The good news is if you're a coke it doesn't work that way and if your IMAX it doesn't work that way.

Speaker Change: Maybe just one on cash flow could you update us just around your latest thinking for cash flow conversion this year, maybe relative to EBITDA.

Stephen Laszczyk: Hey, thanks. Maybe just one for Natasha on cash flow. Could you update us just around your latest thinking for cash flow conversion this year, maybe relative to EBITDA? Appreciate there's been some timing dynamics in H1 of the year that you called out in your prepared remarks. Just would be curious how you think about that trending in H2. As you look ahead on cash conversion, just be curious how you're thinking about cash generation as the business hits stride in 2026 and beyond. Thank you.

Rich Gelfond: Thank you rich.

Operator: Thank you.

Patrick Sholl: And our next question comes from Patrick Sholl with Barrington Research. Hi, thanks for taking the question. Just another question on like the backlogs and signings with the regal agreement they announced in May. You mentioned the 70 million 70 millimeter film projector. I'm just wondering how many of those are in the backlog and like how those types of. screens have performed with the Film for IMAX initiative, and just what other, I guess it would be. Puts and Takes might go into that growth of that. So the film theaters have done extremely well when there's IMAX film releases.

David Karnofsky: Thank you.

Steven Frankel: Appreciate there's been some timing dynamics in the <unk>.

Speaker Change: And our next question comes from Patrick Sholl with Barrington Research.

Steven Frankel: Half of the year that you called out in your prepared remarks should be curious how you think about that trending in <unk>.

Steven Frankel: Second half and then as you look ahead on cash conversion and just be curious how youre thinking about.

Patrick Sholl: Hi, Thanks for taking the question.

Patrick Sholl: Just another question on <unk>.

Steven Frankel: Cash generation is the business hits stride in 2006 and beyond thank you.

Patrick Sholl: The backlogs in sidings.

Patrick Sholl: And with the Regal agreement.

Patrick Sholl: <unk>.

Patrick Sholl: In may.

Speaker Change: You mentioned the $70 million 70 millimeter film projector I was just wondering how many of those are in the backlog and like how those types of.

Speaker Change: Hi, Fi and cash flow continues to strengthen I mean, we're looking at we look at the targets. We're looking more similar right now to pre COVID-19 as conversion levels. Our first half operating cash flow was $30 million is up 25% year over year.

Natasha Fernandes: Hi, Steven. Cash flow continues to strengthen. As we look at the targets, we're looking more similar right now to pre-COVID cash conversion levels. Our H1 operating cash flow was $30 million. It's up 25% year over year. Our free cash flow continues to improve as well. We're historically at around 50% and we're trending towards that as well. As you start to think about just the operating leverage in our model, that's what starts to push through straight down to cash. We've talked about this before, but exceeding box office levels over $250 million in each quarter, essentially every dollar beyond that flows right through down to EBITDA into cash at about a 85% conversion rate. That's what'll continue to generate the cash flow.

Patrick Sholl:

Patrick Sholl: Screens have performed for the with the film for IMAX initiative.

Patrick Sholl: And just what other I guess it would be.

Steven Frankel: Our free cash flow.

Patrick Sholl: Puts and takes might go into that.

Steven Frankel: To improve and while we were historically at around 50% and we're trending towards that as well.

Patrick Sholl: That growth of that.

Speaker Change: So on the film theatres have done extremely well when there is IMAX film releases. So this year for centers I mean, the numbers were incredibly strong because Ryan Krueger filmed with IMAX cameras, and Warner brothers put out film prints.

Steven Frankel: You start to think about just the operating leverage in our model that's what starts to lift through straight down to cash so they talked about this before but.

Richard Gelfond: So this year for Sinners, I mean, the numbers were incredibly strong because Ryan Coogler filmed with IMAX cameras and Warner Brothers put out film prints and, you know, there were extremely high capacity. And remember, we did over 20% in each of the two weekends, that initial weekends that we played it. So, and obviously Oppenheimer last year, we all know, you know, how that movie performed very good. And I mentioned the pre-sales on pre-ticket sales for Odyssey. So, we're always looking for, now we don't produce new film projectors because it's an older technology and even though it brings in a lot of audiences, there are costs associated with it.

Steven Frankel: Exceeding box office level over $250 million in each quarter essentially every dollar beyond that flows right through down to EBITDA into cash.

Patrick Sholl: Sure.

Patrick Sholl: Extremely high capacity whenever we get over 20% in each of the two weekends.

Steven Frankel: That 85% conversion rate and so that's what I'll continue to generate the cash flow and even as they start to think about it. We have we already now Q3 will be a strong cash flow because China cash flows come in a little later on their film content that they just generally have a cycle where film at the close and then you get paid your cash itself.

Patrick Sholl: Initial weekend stuff, we played it so and obviously Oppenheimer last year, we all know how.

Natasha Fernandes: Even as we start to think about it, we already know Q3 will be a strong cash flow because China's cash flows come in a little later on their film content because they just generally have a cycle where films have to close and then you get paid your cash. Imagine the Ne Zha 2 that still sits out there and the cash will come in in Q3. Even with our strong H1 cash flow, we already know Q3 is going to be strong with the Ne Zha receipts coming in then.

Patrick Sholl: How that movie performed very good I mentioned, a pre sales on pre ticket sales for Odyssey.

Patrick Sholl: So.

Patrick Sholl: We're always looking for now we don't produce new film projectors, because it's a older technology and even though it brings in a lot of audiences.

Steven Frankel: Imagine in Asia, two that's still out there and the cash will come in in Q3.

Steven Frankel: Even with our strong first half cash flow, we already know Q3 and to be strong with dementia receipts coming in then.

Patrick Sholl: It's there are costs associated with it however, we've been scouring the globe and I do think for Odyssey will have more film theaters that we had four.

Steven Frankel: Thank you.

Richard Gelfond: However, we've been scouring the globe, and I do think for Odyssey, we'll have more film theaters than we had for the last film release, Sinners, or Nolan's last movie, Oppenheimer. So, we're trying to address that issue, but there's a limited supply and the economics are terrific.

Stephen Laszczyk: Thank you.

Speaker Change: And we have time for one last question and it comes from David Joyce with Seaport Research partners.

Operator: We have time for one last question, and it comes from David Joyce with Seaport Research Partners.

Patrick Sholl: The last film releases centers or <unk> last movie.

David Joyce: Thank you, it's great to see the operating leverage really showing through but I had a question on.

Patrick Sholl: Oppenheimer.

David Joyce: Thank you. It's great to see the operating leverage really showing through. I had a question on trying to understand the puts and takes of the take rates. Film remastering and distribution was up year over year, but system rentals take rate compressed by 40 basis points. What would explain that, please?

Patrick Sholl: We're trying to address that issue, but there is a limited supply and the economics are terrific around it.

David Joyce: Trying to understand the puts and takes of the take rates film Remastering and distribution was up year over year, but system rentals to great compressed by 40 basis points.

Speaker Change: Okay. Thank you.

Stephen Laszczyk: Our next question comes from Stephen Laszczyk. Hey, thanks. I have just one for Natasha on cash flow. Could you update us just around your latest thinking for cash flow conversion this year, maybe relative to EBITDA? I appreciate there's been some timing dynamics in the first half of the year that you called out in your prepared remarks. Just be curious how you think about that trending into the second half.

David Joyce: What would explain that please.

Speaker Change: Our next question comes from Steven last check with GFS.

David Joyce: Okay.

David Joyce: There's always different let's say hey, David sometimes you can have upgrades of theaters and so when youre upgrading a theater, you'll have to write off the old asset and putting the new theater, but you know that the increments holiday will come within a within the very early stages of the 10 year turn on that location.

Steven Frankel: Hey, thanks.

Natasha Fernandes: There's always different puts and takes, David. Sometimes you can have upgrades of theaters, when you're upgrading a theater, you'll have to write off the old asset and put in the new theater, but you know that the incrementality will come within the very early stages of the 10-year term on that location as you upgrade to new technology. It's a very good investment. It all comes down to the mix in relation to whether we're putting in sales deals or JV deals as well. That kind of ebbs and flows your margin take rate. Overall, the operating leverage, as you can see from the content solutions, we've done really well in that $1.2 billion guide that we're working towards this year is flowing through.

Steven Frankel: Maybe just one on cash flow could you update us just around your latest thinking for cash flow conversion this year, maybe relative to EBITDA.

Steven Frankel: Appreciate there's been some timing dynamics on the <unk>.

Steven Frankel: First half of the year that you called out in your prepared remarks would be curious how you think about that trending in <unk>.

David Joyce: Is it upgrades and new technology. So it's a very good investment it all comes down to the mix in relation to where.

Natasha Fernandes: And then as you look ahead on cash conversion, just be curious how you're thinking about cash generation as the business hits stride in 26 and beyond. Thank you.

Steven Frankel: Second half and then as you look ahead on cash conversion and just be curious how youre thinking about.

David Joyce: Whether we're putting in.

Steven Frankel: Cash generation is the business hits stride in 2006 and beyond thank you.

David Joyce: Sales deals or JV deals as well and so that kind of ebbs and flows of your margin take rate, but overall the operating leverage as you can see from the content solutions, we've done really well in that $1 2 billion guide that we're working towards this year is flowing through you can see it in content solutions, 66% margin.

Natasha Fernandes: Hi, Steven. Cash flow continues to strengthen. I mean, we're looking, as we look at the targets, we're looking more similar right now to pre-COVID cash conversion levels. Our first half operating cash flow was $30 million. It's up 25% year over year. You know, our free cash flow continues to improve as well. We're historically at around 50% and we're trending towards that as well. And, you know, if you start to think about just the operating leverage in our model, that's what starts to push through straight down to cash. And we've talked about this before, but, you know, exceeding box office levels over $250 million in each quarter, essentially every dollar beyond that flows right through down to EBITDA into cash at about an 85% conversion rate.

Speaker Change: Hi, Steve and cash flow continues to strengthen I mean, we're looking at we look at the targets. We're looking more similar right now to pre Covid asked conversion levels. Our first half operating cash flow was $30 million is up 25% year over year.

Natasha Fernandes: You can see it in content solutions, a 66% margin, with a very strong return and our overall gross margin of over 58% flowing right through to the EBITDA margin of 43%. It's been a great quarter and a great H1 to the year, and we expect good things from the rest of the year as well.

David Joyce: With a very strong return and our overall gross margin of over 58% flowing right through to the EBITDA margin of 43%, it's been a great quarter and a great first half of the year and we expect good things from the rest of the year as well.

Steven Frankel: Our free cash flow.

Steven Frankel: <unk> to improve as well we were historically around 50% and you are trending towards that as well.

Speaker Change: Okay. Thank you.

Steven Frankel: As you start to think about just the operating leverage in our model. That's what starts to lift through straight down to cash as we talked about this before but.

David Joyce: Okay.

Richard Galvan: And this concludes the question and answer session I would now like to turn it back to rich Gulf on for closing remarks.

David Joyce: Well, great. Thank you.

Operator: This concludes the question and answer session. I would now like to turn it back to Rich Gelfond for closing remarks.

Steven Frankel: Exceeding box office level over $250 million in each quarter essentially every dollar beyond that flows right through down to EBITDA and the cash.

Richard Galvan: Thanks, everyone for joining us I want to leave the call with a few final thoughts.

Richard Gelfond: Thanks, everyone, for joining us. I want to leave the call with a few final thoughts. IMAX has reached a new inflection point in our business and is poised to achieve new levels of success. Filmmakers and studios want to release their best films in IMAX. Consumers overwhelmingly prefer to see those films in IMAX. As a result, theater operators want to be in the IMAX business. All of this is creating a virtuous cycle that leads to growing revenue driven by higher box office, more systems signed, and more installations. This means more value generated for consumers, our partners, and for you, our shareholders. There simply has never been a better time to be in the IMAX business. Thank you all.

Richard Galvan: IMAX has reached a new inflection point in our business and is poised to achieve new levels of success.

Steven Frankel: About 85% conversion rate and so that's what I'll continue to generate the cash flow and even as we start to think about it. We have we already know Q3, it will be a strong cash flow.

Natasha Fernandes: And so that's what will continue to generate the cash flow. And even as we start to think about it, we have, we already know Q3 will be a strong cash flow because China's cash flows come in a little later on their film content because they just generally have a cycle where films have to close and then you get paid your cash. And so imagine the new job too, that's still pissed out there and the cash will come in and Q3. So even with our strong first half cash flow, we already know Q3 is going to be strong with the new job receipts coming in then.

Richard Galvan: Filmmakers and studios, one or at least their best films in IMAX consumers overwhelmingly prefer to see those films in IMAX and as a result theater operators want to be in the IMAX business. All of this is creating a virtuous cycle that leads to growing revenue driven by higher box office.

Steven Frankel: China cash flows come in a little later on their film content that they just generally have a cycle where films at the close and then you get paid your cash and so imagine the new job too.

Steven Frankel: There and the cash will come in in Q3, even with our strong first half cash flow. We already know Q3 is going to be strong with dementia receipts coming in then.

Richard Galvan: More systems sign and more installations.

Richard Galvan: This means more value generated for consumers our partners and for you. Our shareholders. This simply has never been a better time to be in the IMAX business. Thank you all.

Speaker Change: Thank you.

David Joyce: And we have time for one last question and it comes from David Joyce with Seaport Research Partners. Thank you. It's great to see the operating leverage really showing through, but I had a question on trying to understand the puts and takes of the take rates, you know, film remastering distribution was up year over year, but system rentals take great compressed by 40 basis points. What would explain that, please? There's always different puts and takes.

Speaker Change: And we have time for one last question and it comes from David Joyce with Seaport Research partners.

Richard Galvan: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

David Joyce: Thank you, it's great to see the operating leverage really showing through but I had a question on.

David Joyce: Trying to understand the puts and takes of the take rates film Remastering and distribution was up year over year, but system rentals to great compressed by 40 basis points.

David Joyce: What would explain that please.

David Joyce: Okay.

David Joyce: There's always different puts and takes David sometimes you can have upgrades of theatres and so when youre upgrading a theater you'll have to write off the old asset and put in the new theater, but you know that the increments holiday will come within a within the very early stages of the 10 year term on that location.

Natasha Fernandes: David, sometimes you can have upgrades of theaters. And so when you're upgrading a theater, you'll have to write off the old asset and put in the new theater. But you know that the incrementality will come within the very early stages of the 10-year term on that location as you upgrade to new technology. So it's a very good investment. And it all comes down to the mix in relation to whether we're putting in sales deals or JV deals as well. And so that kind of adds and slows your margin take rate. But overall, the operating leverage, as you can see from the content solutions, we've done really well in that 1.2 billion guide that we're working towards this year is flowing through.

David Joyce: As you upgrade to new technology. So it's a very good investment it all comes down to the mix in relation to where.

David Joyce: Whether we're putting in.

David Joyce: Sales deals or JV deals as well and so that kind of ebbs and flows of your margin take rate, but overall the operating leverage as you can see from the content solutions has done really well in that $1 2 billion guide that we're working towards this year. It's flowing through you can see it in context delicious 66% margin.

Natasha Fernandes: You can see it in content solutions, a 66% margin with a very strong return and our overall gross margin of over 58%, going right through to the EBITDA margin of 43%.

David Joyce: With a very strong return and our overall gross margin of over 58% flowing right through to the EBITDA margin of 43%.

Natasha Fernandes: It's been a great quarter and a great first half of the year, and we expect good things from the rest of the year.

David Joyce: A great quarter, and a great first half of the year and we.

David Joyce: Good things from the rest of the year as well.

Richard Gelfond: Thank you.

David Joyce: Great. Thank you.

David Joyce: Okay.

Operator: And this concludes the question and answer session.

Rich Gelfond: And this concludes the question and answer session I would now like to turn it back to rich Gulf on for closing remarks.

Richard Gelfond: I would now like to turn it back to Richard Gelfond for closing remarks. Thanks everyone for joining us. I want to leave the call with a few final thoughts. Imax has reached a new inflection point in our business and is poised to achieve new levels of success. Filmmakers and studios want to release their best films in Imax. Consumers overwhelmingly prefer to see those films in Imax. And as a result, theater operators want to be in the Imax business. All of this is creating a virtuous cycle that leads to growing revenue driven by higher box office, more system design, and more installation.

Speaker Change: Thanks, everyone for joining us I want to leave the call with a few final thoughts.

Speaker Change: IMAX has reached a new inflection point in our business that is poised to achieve new levels of success filmmakers and studios one or at least their best films in IMAX consumers overwhelmingly prefer to see those films in IMAX and as a result theater operators want to be in the IMAX business.

Speaker Change: All of this is creating a virtuous cycle that leads to growing revenue driven by higher box office more systems side and more installations.

Richard Gelfond: This means more value generated for consumers, our partners, and for you, our shareholders. This simply has never been a better time to be in the IMAX business.

Speaker Change: This means more value generated for consumers our partners and for you. Our shareholders. This simply has never been a better time to be in the IMAX business. Thank you all.

Operator: Thank you all. Thank you for your participation in today's conference.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Operator: This does conclude the program. You may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].