IMAX, the company known for its giant screens and immersive cinema experiences, is betting that a steady pipeline of movies shot specifically for its format will keep theaters full and fatten its profit margins. That's the takeaway from a recent note by Wedbush, an investment bank, which sees the company's third-quarter results as the beginning of a longer growth run.
Wedbush expects IMAX to report revenue of $161 million for the third quarter, ahead of the roughly $150 million that analysts had been forecasting. The bank attributes the strength to IMAX's close relationships with filmmakers and its premium brand, which lets theaters charge more for tickets to its screenings.
Why filmed-for-IMAX matters
Not all movies shown on IMAX screens are created equal. Some are standard films converted to the format after production, while others are "filmed-for-IMAX" — shot with IMAX cameras or designed from the start to take advantage of the larger canvas. The latter tend to draw bigger crowds and command higher ticket prices, because audiences see them as a special event.
Wedbush argues that the growing number of filmed-for-IMAX releases scheduled through 2028 can keep screens busier and give theaters more pricing power. That's a key part of the company's strategy: instead of just being a hardware maker that sells or leases projection systems, IMAX wants to be a premium content brand that audiences actively seek out.
The company has been pushing this angle for years, signing deals with major studios and filmmakers to produce more content natively in the format. The payoff, according to Wedbush, could be a significant boost to profitability. The bank sees IMAX's EBITDA margins — a measure of operating profitability — climbing above 50% by 2028, up from current levels.
What it means for investors
For everyday investors, the Wedbush note highlights a few things worth watching. First, IMAX's business is tied to the health of the global box office. When moviegoers show up, IMAX benefits because it typically takes a cut of ticket sales or charges a premium for its systems. A strong slate of blockbuster films — especially those shot for IMAX — can drive outsized gains.
Second, the company's push into filmed-for-IMAX content is a margin story. If more movies are made for the format, IMAX can potentially negotiate better terms with theaters and studios, and its own production arm could generate higher-margin revenue. That's why Wedbush's margin forecast is so optimistic.
But there are risks. The box office is notoriously volatile, and a weak film slate can hurt IMAX as much as a strong one helps. The company also faces competition from other premium formats, such as Dolby Cinema and premium large-format screens from theater chains. And while filmed-for-IMAX releases are growing, they still represent a fraction of the overall movie output.
Investors should also keep an eye on IMAX's international exposure. The company has a significant presence in China, where box office trends can be unpredictable due to regulatory and cultural factors. Any slowdown there could weigh on results.
The bigger picture
IMAX's story is part of a broader trend in the entertainment industry: the rise of premium experiences. As streaming services have eaten into traditional moviegoing, theaters have fought back by offering bigger screens, better sound, and more comfortable seating. IMAX is one of the clearest beneficiaries of that shift, because its brand is synonymous with the big-screen experience.
Wedbush's note is just one analyst's view, and it's not a guarantee of future performance. But it does underscore the market's growing interest in IMAX as a play on the recovery of cinema attendance and the premiumization of entertainment.
For those considering IMAX stock, the key question is whether the company can deliver on its margin promise. The next few quarters will show whether the filmed-for-IMAX slate is enough to keep the momentum going. As always, it's wise to do your own research and consider how IMAX fits into your broader portfolio.
