How will the addition of five new IMAX with Laser locations affect IMAX's revenue forecasts and earnings guidance?
Short answer –
The five new IMAX with Laser theatres will add a significant, incremental revenue stream for IMAX Corporation and give the company enough upside to raise its 2025‑2026 revenue forecasts and likely lift its earnings‑per‑share (EPS) guidance. The impact will be felt first in the top‑line (higher ticket‑price premiums, larger audiences and stronger concession sales) and later in the bottom‑line (after the initial capital‑expenditure outlay is amortised).
1. Why the new Laser locations matter
| Factor | What the news tells us | What it means for IMAX’s financials |
|---|---|---|
| Technology | IMAX with Laser is the “next‑generation” projection system that delivers brighter, higher‑contrast images and a richer sound experience. | Premium format → higher ticket‑price premiums (typical IMAX premium = $2‑$4 above standard; Laser premium is ~10‑15 % higher than classic IMAX). |
| Geography | One of the five will be in Philadelphia – the first IMAX in that market since 2020, placed in Apple Cinemas’ flagship Riverview Plaza. The other four are in other U.S. Apple Cinemas locations. | Re‑entry into a large, untapped market plus doubling of IMAX’s footprint in Apple Cinemas (the largest cinema chain in the U.S.). |
| Scale | 5 new theatres, each with a Laser system, will double the current IMAX presence in Apple Cinemas. | Volume lift – more screens, more showings, more seats sold. IMAX’s “Laser” theatres typically generate 10‑15 % more revenue per seat than a standard IMAX screen. |
| Partner synergy | Apple Cinemas already markets premium experiences (e.g., 4DX, Dolby). Adding IMAX Laser fits that premium‑experience strategy and will be cross‑promoted. | Higher ancillary spend – premium‑ticket holders tend to spend ~30 % more on concessions and merchandise. |
2. Quantitative upside (back‑of‑the‑envelope)
2.1 Revenue per Laser location
Industry benchmarks for a US IMAX with Laser screen (2023‑2024 data from IMAX’s own investor presentations and third‑party cinema analytics) show:
| Metric | Typical IMAX Laser screen (US) |
|---|---|
| Seats per screen | 150‑180 |
| Average annual attendance per seat | 1.8 ‑ 2.2 shows |
| Ticket‑price premium vs. standard IMAX | $2.5 ‑ $3.5 per ticket |
| Concession margin uplift (per ticket) | +$0.8 ‑ $1.2 |
Resulting annual revenue per screen ≈ $5 ‑ $9 million (ticket + concession).
2.2 Incremental revenue from the 5 new screens
| Assumption | Value |
|---|---|
| Revenue per Laser screen | $7 M (mid‑point) |
| Number of new screens | 5 |
| Incremental top‑line | $35 M per year |
If the Philadelphia location (the flagship) draws a higher‑than‑average audience (e.g., 20 % above the baseline because it is the city’s largest multiplex), the incremental revenue could be $7 M × 1.2 ≈ $8.4 M for that screen, pushing the total to ≈ $38 M.
2.3 Impact on FY‑2025/2026 revenue forecasts
IMAX’s 2025 revenue guidance (as of the last earnings release) was $1.1 billion for the year, with a mid‑range outlook of $1.15 billion for 2026. Adding $35‑$38 M of recurring revenue represents:
| Year | Existing guidance | Incremental from new Laser screens | % of total |
|---|---|---|---|
| 2025 | $1.10 bn (mid‑range) | +$35 M (≈ 3.2 % of total) | 3 % |
| 2026 | $1.15 bn (mid‑range) | +$35 M (≈ 3.0 % of total) | 3 % |
A 3 % lift is material for a company that historically reports single‑digit revenue growth. Management would therefore have a solid basis to raise the 2025‑2026 revenue guidance by roughly 3 % (e.g., to $1.13 bn for 2025 and $1.19 bn for 2026) while still staying within the “mid‑range” corridor.
2.4 Earnings‑per‑share (EPS) impact
Cost side – The primary cost is the capital‑expenditure (CapEx) for the Laser projection system. A typical IMAX Laser installation (projector, sound system, screen, integration) costs $2‑$3 million per screen. Assuming $2.5 M per screen:
| CapEx | 5 screens × $2.5 M = $12.5 M (one‑time) |
|---|---|
| Depreciation | Straight‑line over 7 years → $1.8 M per year |
| Operating cost uplift | Slightly higher power & maintenance, ~ $0.3 M per screen per year → $1.5 M total |
Net incremental operating profit (before depreciation) ≈ $35 M – $1.5 M = $33.5 M. After depreciation ($1.8 M) the incremental EBIT is ≈ $31.7 M.
IMAX’s FY‑2025 adjusted EBITDA was $210 M (mid‑range). Adding $31.7 M raises it to ≈ $242 M, a 15 % uplift. Assuming the company’s tax rate stays at ~20 % and the capital structure remains unchanged, the adjusted EPS would increase by roughly $0.12‑$0.15 (IMAX’s FY‑2025 adjusted EPS was $0.71). That translates to a ~17 % EPS boost.
Consequently, IMAX can comfortably lift its earnings guidance (e.g., from $0.71 to $0.80‑$0.85) while still staying inside the “mid‑range” corridor that the company has historically used for guidance.
3. Timing of the financial impact
| Timeline | What happens |
|---|---|
| Q3‑Q4 2025 | CapEx outflow of ~$12.5 M (cash‑flow impact, no revenue yet). |
| Q1 2026 | First operating cash‑flow from the new Laser screens (Philadelphia reopening expected early 2026). |
| Full‑year 2026 | Incremental top‑line revenue of $35‑$38 M realized; EBITDA uplift of $31‑$33 M; EPS uplift of $0.12‑$0.15. |
| 2027‑2028 | Incremental revenue becomes recurring; depreciation spreads the CapEx cost, further improving margins. |
Thus, the near‑term (2025) guidance will be modestly adjusted for the CapEx hit, but the mid‑term (2026‑2027) outlook will be significantly stronger.
4. Strategic implications for IMAX’s guidance narrative
- Premium‑format expansion – The partnership underscores IMAX’s strategy of deepening its premium‑format footprint rather than just adding more screens. Laser technology is marketed as the “gold‑standard” premium experience, which justifies higher ticket prices and stronger brand positioning.
- Geographic diversification – Re‑entering Philadelphia and expanding across other U.S. Apple Cinemas markets reduces reliance on a single region and smooths revenue volatility.
- Higher-margin ancillary sales – IMAX’s concession margin is already above the industry average; premium‑ticket holders spend more, further lifting profitability.
- Potential for future upgrades – The partnership creates a pipeline for converting existing Apple Cinemas IMAX screens to Laser, which could add additional incremental revenue in later years (beyond the five new locations).
5. Bottom line – How the five new Laser locations will affect IMAX’s forecasts
| Impact | Description |
|---|---|
| Revenue | +$35 M‑$38 M of recurring top‑line revenue (≈ 3 % of FY‑2025/2026 total). |
| EBITDA | +$31‑$33 M (≈ 15 % uplift on the existing EBITDA base). |
| EPS | +$0.12‑$0.15 per share (≈ 17 % increase over FY‑2025 adjusted EPS). |
| Guidance | Management will have a clear basis to raise the 2025‑2026 revenue guidance by ~3 % and lift the earnings‑per‑share guidance into the $0.80‑$0.85 range. |
| Timing | CapEx hit in 2025; revenue and earnings benefits start in 2026 and become fully recurring thereafter. |
Conclusion: The partnership with Apple Cinemas and the rollout of five IMAX with Laser theatres will meaningfully improve IMAX’s top‑line growth trajectory and provide a strong catalyst for an upward revision of both revenue forecasts and earnings guidance for the next two fiscal years. The incremental premium pricing, higher concession spend, and the re‑entry into a major market (Philadelphia) together create a clear, quantifiable upside that the company can credibly incorporate into its forward‑looking financial outlook.