Participants

Jennifer Horsley; Head of Investor Relations; Imax Corp

Richard Gelfond; Chief Executive Officer, Director; Imax Corp

Natasha Fernandes; Chief Financial Officer, Executive Vice President; Imax Corp

Eric Wold; Analyst; Texas Capital Securities

Chad Beynon; Analyst; Macquarie Research

David Karnovsky; Analyst; JPMorgan

Eric Handler; Analyst; ROTH Capital

David Joyce; Analyst; Seaport Global Securities LLC

Omar Mejias; Analyst; Wells Fargo Securities, LLC

Steve Frankel; Analyst; Rosenblatt Securities, Inc.

Patrick Sholl; Analyst; Barrington Research Associates

Mike Hickey; Analyst; The Benchmark Company

Presentation

Operator

Thank you for standing by, and welcome to IMAX first-quarter 2025 earnings conference call.
(Operator Instructions) I would now like to hand the call over to Jennifer Horsley, Head of Investor Relations for IMAX. Please go ahead.

Jennifer Horsley

Good afternoon and thank you for joining us to IMAX's first-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.
Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made of available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted to 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. 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 these statements as a result of new information, future events, or otherwise. During today's call, references may be made to certain non-GAAP financial measures. Discussion of management's use of these measures and the definition of these measures, as well as the reconciliation to non-GAAP financial measures are contained in this afternoon's press release and our earnings materials, which are available on the Investor Relations page of our website at IMAX.com.
With that, let me now turn the call over to Mr. Richard Gelfond. Rich?

Richard Gelfond

Thanks, Jennifer, and thank you, everyone, for joining today. IMAX got off to an excellent start in the first quarter. We banked nearly $300 million in global box office, our best first quarter ever. We've signed agreements for more than 100 new and upgraded systems year-to-date compared to 130 in all 2024.
And we kicked off a great summer slate with a run of eight consecutive film Primex releases. The fundamentals of our business have never been strong longer. In recent weeks. that fact has been obscured by noise around tariffs, China, and speculation about the potential impact on the Hollywood slate.
We've look deeply at this issue. We've talked to every studio and our industry partners throughout China, cultivator across our 30 years of doing business in the country. We're highly confident that the quote moderate reduction in Hollywood imports announced by China Film administration were largely target films with limited box office potential in the market for smaller budget kind of fair, not the kind of films that drive IMAX's business. So we're not letting the noise distract us from the opportunity ahead.
We drove double digit growth in revenue and adjusted EBITDA in the first quarter and adjusted EBITDA margin of 43%. The Hollywood fleet is ramping up, building to the year-end crescendo of Avatar: Fire and Ash in December. We've already seen select footage and a very enthusiastic.
We've had many promising new locations set to open across high PSA markets in Asia and Australia, North America, the Middle East. And IMAX uniquely benefits from a very positive confluence of trends in global content. The rapid rise of big budget, high production value, local language blockbusters from around the world and to the continued resurgence of the Hollywood slate with releases from the biggest filmmakers and tempo franchises lined up through the end of the decade.
We continue to rebuild our leverage in the industry to provide a diverse, dynamic, truly global programming slate. On the content side, first, 2025 is shaping up to be a watershed year for our growing, successful, local language strategy. Chinese New Year or exceeded our wildest expectations with 182 million in IMAX box office, triple our previous record. Like Top Gun: Maverick, Oppenheimer, and Dune: Part Two before it, Ne Zha 2 became synonymous with IMAX as we've earned more than 164 million to date with the film.
We index 7.5% with the film in China are less than 1% of the screens, about double our average with local animated releases. As a reminder, IMAX collects a higher fee in China with local language releases than it does with Hollywood releases. We see tremendous opportunities ahead with international films. It's quite possible that IMAX delivers its highest grossing local language films of all time in China, Japan, and India this year.
In Japan, Demon Slayer: Infinity Castle, the sequel to the highest grossing Japanese film of all time arrives in July, followed by a global release in the fall. And in India, War 2 has the potential to join the ranks of India's biggest block busters when it comes out in August. These well-established markets are building bankable and often exportable franchises to rival Hollywood releases. We're tapping into fast-growing film industries in priority markets like Saudi Arabia, Vietnam, Indonesia, and Thailand, to expand our content portfolio and drive network growth.
In 2019, local language film accounted for 12% of our total global box office. In 2023, that figure rose to 21%. And in the first quarter of '25, it was a 68% of our box office. We've already delivered more local language box office this year than we did in all of 2024. And we remain very bullish on our Hollywood slate that features more IMAX DNA than ever.
Every Hollywood released schedule for now to August was filmed with IMAX cameras. Just this past weekend, we delivered 20% of the domestic opening of centers, which was shot in park for IMAX with IMAX 70 millimeter film. And on Monday, center continued its torrid pace in IMAX, dropping very little from Sunday day and delivering $2 million indicating a grade hold is likely for this week.
Yet again, when an auteur filmmaker like Ryan Coogler leans into IMAX, audiences heed the call and turn out for the platform in a big way. This outperformance is consistent with what we’ve seen with the big IMAX 70-millimeter releases like Oppenheimer and Dune: Part Two.
Sinners also delivered our biggest domestic opening weekend ever for a horror film. Over the next few months, buzz is building for our film for IMAX slate. Mission: Impossible - The Final Reckoning will make a splashy debut at Cannes in just a few weeks, followed by the London and New York premieres in IMAX.
Inside are high on both Marvel’s Thunderbolts and Fantastic Four. The trailers for Superman have racked up hundreds of millions of views online. How to Train Your Dragon screened to acclaim at CinemaCon. And early IMAX exclusive F1 pre-sales are strong, and we have many IMAX exclusive elements and events throughout its promotional campaign.
This year concludes with Zootopia 2 and Avatar: Fire and Ash. The first two Avatar films earned more than $250 million apiece in IMAX. 2026 kicks off with the Avatar carryover and features Christopher Nolan’s The Odyssey, as well as Avengers, Star Wars, Super Mario Brothers, Toy Story, Greta Gerwig’s Narnia, and the Dune sequel from Denis Villeneuve.
And 2027 already boasts another Avengers and Star Wars, as well as Batman 2 and Frozen 3. Once viewed as a competitive threat, streaming services are leaning into IMAX in a big way. Whether it’s our exclusive window for Greta Gerwig’s Narnia for Netflix, the longest theatrical window Netflix has ever granted at 28 days or Apple prioritizing an IMAX release before securing the studio partner for F1 or Amazon purchasing our original documentary Blue Angels and committing tentpoles like Project Hail Mary and Mercy to the Film for IMAX program.
And as we open our content aperture, we continue to drive incremental box office with our growing slate of events and experiences, including a record-breaking exclusive debut of Becoming Led Zeppelin and this weekend’s Pink Floyd live at Pompeii.
Our exclusive re-release of Studio Ghibli’s classic Princess Mononoke, which earned $4 million in its debut, the biggest IMAX domestic opening ever for local language film and our sold-out live sports test in France with the annual Le Classique football match.
Global network and technology. Looking at our global network, our system signings and installations are a strong indicator of anticipation among exhibitors and the prevailing sentiment that IMAX will be the preferred choice for consumers worldwide as the slate rolls out.
We installed 21 systems worldwide in the first quarter, our second best first quarter ever for installs, and we’ve signed agreements year-to-date for 101 new and upgraded IMAX systems worldwide. This includes a major agreement with AMC, which will add 12 new IMAX locations and upgrade virtually its entire IMAX footprint in the US to IMAX with laser. We also continue to expand our roster of partners in the US. This year alone, we’ll open at least 11 locations with regional partners that we’ve signed up in the past 12 months.
Internationally, Japan continues to be a priority market for us. Year-to-date, IMAX has now signed agreements for 11 new and upgraded locations in Japan, including a rare location with two auditoriums in Tokyo. We also expanded across Western Europe with our fast-growing partners at Kinepolis in a multi-territory agreement spanning France, Belgium, Spain, the Netherlands, as well as the US and Canada.
To close, it is a very exciting time at IMAX. Our business has proven to be resilient and able to thrive in many different economic cycles. We have no doubt that will remain true. We have visibility to a more promising slate through the end of the decade than we’ve ever seen in the future and a strong trajectory for continued network growth. We look forward to seizing the opportunity to deliver results for all of our shareholders.
Thank you. With that, I’ll turn it over to Natasha.

Natasha Fernandes

Thanks, Rich, and good afternoon, everyone. In the first quarter, IMAX exceeded its expectations across global box office, system signing, system installations and adjusted EBITDA. Our results in the quarter were driven by record box office and 40% year-over-year growth in IMAX system installations worldwide. And this outperformance again highlighted the operating leverage in our model with a total adjusted EBITDA margin of 42.7%. We are on track to achieve our guidance for the full year, including a record $1.2 billion in global box office.
Taking a closer look at our Q1 results, we delivered revenues of $87 million, up 10% from the prior year first quarter. Content Solutions revenues of $34 million grew year-over-year with gross margin of $24 million, up 7%, driven by our record Chinese New Year box office and our overall programming strategy, which featured a mix of content including Hollywood, local language, re-releases, concert films and sports. Our best-ever Q1 box office also led to a high Q1 global market share of 3.5% on less than 1% of screens globally and a record of 5.4% in China, both of which reflect IMAX’s outperformance in the quarter.
Technology Products and Services revenues of $51 million was up 17% year-over-year, with gross margin of $29 million up 23%, driven in part by growth in global box office. The quarter also saw growth in installation, 21 versus 15 systems in the prior year, which included a higher mix of sales type arrangements.
The geographic mix of installations was evenly spread with seven systems in each of domestic, rest of the world, and China. Exhibitors globally are shifting into investment mode in advance of the strong upcoming IMAX slate.
Similarly, encouraging was the strength in Q1 signings, which at 95 systems was up 87 from the prior year and included signings in high per-screen average markets such as the US, Europe, and Japan. The strong Q1 signings lift the IMAX backlog to 516 systems, up 74 systems or 17% year-over-year, representing a solid pipeline for future global growth of the IMAX network.
The gross margin performance in Q1 of 61% increased 200 basis points year-over-year, reflecting high incremental profit flow-through from the stronger box office performance.
Operating expenditures defined as research and development and selling general and administrative expenses, excluding stock-based compensation, was $30 million and increased $950,000 year-over-year, driven primarily by timing of expenses. We continue to take proactive steps to enhance operational efficiency and reduce annual costs while optimizing IMAX’s organizational structure, including eliminating redundant roles and centralizing select functions, which positively impact both margin and OpEx.
Overall, first quarter total consolidated adjusted EBITDA of $37 million increased $5 million or 15% year-over-year, driven by the higher revenues and gross margin. This resulted in an adjusted EBITDA margin of 42.7%, up over 200 basis points year-over-year.
First quarter adjusted EPS was $0.13, which includes a higher year-over-year deduction for non-controlling interest associated with a strong IMAX China result. The tax rate was 47% in the quarter, primarily reflective of the geographic mix of profits that led to a higher tax valuation allowance of $3.2 million or negative 6% impact year-over-year. For the full year, we expect the tax rate to be at a more normalized rate based on the historical trends and our geographic forecast of annualized profits.
Turning to cash flow and the balance sheet, cash flow from operations provided $7 million in Q1, which is an $18 million improvement over the prior year period. A good start to the year given seasonally, Q1 is generally a lower cash flow quarter based on the timing of revenues and payments such as annual compensation payouts. 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 contracts, where the capital expenditure is at the beginning of an average 10-year contract term.
During Q1, we used our available capital to invest in the business, including $12 million spent on growth CapEx related to partnering with exhibitor customers to grow and upgrade the IMAX network through joint revenue sharing arrangements.
Our capital position remains very strong with cash of $97 million. Debt excluding deferred financing costs is $282 million. As a reminder, $230 million of our debt comes 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. Our current available liquidity is over $400 million, which includes over $300 million in available borrowing capacity under the company’s various revolving facilities.
We are confident about our outlook for 2025 and beyond. While still early in the year, we are ahead of our expectations and we have started the second quarter off strong with good offers from Minecraft and Sinners, which leads into summer titles with larger potential, including five more film for IMAX titles in Q2 alone. The visibility into IMAX’s future slate has never been as good, including a standout 2026, and the significant runway to grow our network further is clear as IMAX location zones are less than 50% penetrated.
Longer term, we are confident in our future as the demand for IMAX increases and we achieve greater network scale, deepen our relationships with exhibitors, studios and filmmakers, and broaden our content aperture to distribute even more content across our global platform.
We believe with the strength of the IMAX brand, our strong balance sheet and business model, that IMAX is well positioned to deliver sustainable growth, expanding margins and increasing cash flows in 2025 and beyond.
With that, I will turn the call over to the operator for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Eric Wold, Texas Capital Securities.

Eric Wold

Thank you. Good afternoon, everybody. A couple of questions. I guess one question on China and one on kind of the made for IMAX outlook. Rich, you mentioned an expectation that any modest reduction in Hollywood film imports would be focused on the smaller budget films that would not really impact the IMAX slate. So I have to assume then that there has also not been any adverse shift in tone from Chinese exhibitors around kind of in-process signing discussions or the timing of planned installations.

Richard Gelfond

Hey, Eric. We’re coming off our best quarter in China ever, which we just reported today and that’s what affects theater owners and people making movies and things like that. So I would say, there’s not only not a reduction in activity in the market within China, there’s an increase. There’s more incoming calls. There’s more interest in movies. We were just a key member of the Beijing Film Festival this weekend where a panel talked about the future of film. And there was almost no one in the panel who didn’t talk about IMAX and how important it was because they’re looking, like coming off a Nezha and three -- a record by over 3 times of any film we’ve ever done. So the narrative in China is completely positive in a very material way.
In terms of, the reduction of films, moderate reduction coming in, let’s just do a reality check. So Thunderbolts opens in a week and a half. That’s been approved. It’s getting in. Today they did Lilo & Stitch in China. There have been three other films submitted in the last couple weeks. We’ve talked to almost every Hollywood studio and they expect all their major films to get in discussions with the Chinese Government.
So our relationships in China have told us that, the kind of reductions, if there are any, would be kind of the less financially broad ones than the kinds of films IMAX typically plays. So I think, I remain very confident about China in a lot of ways and I don’t think that the moderate film reduction will have a material impact on IMAX.

Eric Wold

No. That’s perfect. And then my follow-up on, you’ve got a Made for IMAX with now the big run of Made for IMAX films starting, I guess, the Sinners are moving through the summer. What is the primary gating factor to having a larger percentage of a film shot with IMAX cameras in the years ahead? Is it purely the number of IMAX cameras that are available to be used? Do you need any broader sign-off from a greater number of studios and producers? And then, kind of what is that right number, do you think, without potentially diluting the kind of the Made for IMAX cachet?

Richard Gelfond

So Eric, I’d say it has more to do with slots than anything else. So for example, we have eight films in a row coming right now, so they just aren’t more films we could have done in this period of time. And plus, we really want to be discriminating about it. So I don’t think you should look at our success as how many we’re doing in a particular period of time, because I think it needs to be the right kind of film for us to do it.
And as a matter of fact, in terms of the film camera, that’s a little bit different. There is a limiting factor there in the number of cameras on the digital side. There isn’t, but right now, as you know, then the Nolan’s are shooting Odyssey with a significant number of IMAX cameras, which we’re very excited about, obviously, for next summer.
But we can’t really shoot more than two simultaneously with the film cameras. And once they’re done shooting, then I think you’ll see us film some other IMAX made film cameras once that concludes somewhat later this year. But I’d say, that I don’t want you to think too much about supply of cameras. It’s much more an issue of the right slots and the right content.

Eric Wold

Perfect. Thank you.

Operator

Chad Beynon, Macquarie.

Chad Beynon

Hi. Good afternoon. Thanks for taking my question. Rich, another one on China, but focusing on the positive outcome for the first quarter. I know, I guess, thinking about the last several quarters, it was your focus to zone in on Tier 1 and Tier 2 in terms of new distribution zones. But as we look at the first quarter outperformance in China, can you talk about where that strength came from, and if it did come from Tier 3 to five cities, if that might change kind of the outlook of the aperture of your zones in that market? Thank you.

Richard Gelfond

I don’t have that data at my fingertips, Chad. However, I believe it was uniform across all markets. And I think, there are a couple of factors for it, obviously, the movie itself was very special and that drove audiences as, you know, as I said, my prepared comments that our market share was up significantly, especially in the animation area. And the other thing was on the marketing side, we tried a very different marketing approach and we kind of joint ventured with a number of entities, including the studio that made Nezha and we did combined promotions.
And then we’ve leaned much more into the right social media. So TikTok was a key component of where we placed our marketing. We’re trying to re-examine not only in China, but throughout the world. Historically, films are marketed on billboards and bus stations and it’s transitioned somewhat. But we found for this film in particular, that social marketing and that our investment in that was extremely successful and I think that had a lot to do with the result.

Chad Beynon

Okay. Great. Thank you. And then with respect to the signings announced in the quarter and around CinemaCon, has anything changed just in terms of the general terms or how you guys are thinking about JVs versus STLs? Not getting into specific contracts, but just given the weight of the signings in the first quarter, if anything changed generally in terms of how you’re talking to future partners? Thank you.

Richard Gelfond

Thanks. No. Not at all. And as a matter of fact, our signings were quite diverse. As I said in my script, we have over 100 now. Just to put it in context, we had 130 for the year last year, but demand is very strong. And I think what’s fueling that is the film slate for this year in 2026 and how far out the backlog of films goes.
But in terms of our terms, no, and I’ll tell you, kind of something you’ll find interesting. So given the success of Nezha, we discussed whether we would want to sign a lot more theaters in China, because obviously the IMAX brand and market share is going in the right direction. And we said, no, we want to be as careful as we always were in terms of who the partner is and what the terms are and what the box office is. So we’re looking at in the same ROI calculus that we always have.

Chad Beynon

Thanks, Rich.

Operator

David Karnovsky, JPMorgan.

David Karnovsky

Hey, thank you, Rich. Theatrical windows are a big topic with exhibitors and studios right now, and I know it’s much less of an issue for IMAX, given you typically carry movies for a week or two, but you have screened films recently with windows to PVOD. I think it’s short of 17 days or 24 days, and so I’m curious on your view of how you kind of see this issue, whether there’s risk now or maybe whether there’s any risk to consider down the line?

Richard Gelfond

Yeah. So I don’t -- we don’t really pay attention to what the PVOD windows are because we don’t really view that as competitive. With IMAX, you are right that exhibitors are really focused on that issue, and as you know, at CinemaCon, that was a big subject.
And I definitely understand windowing being important to exhibitors, but we had a very good quarter because we have global diversification. As you know, the North American exhibitors, it was a very challenging quarter.
Again, I know it’s going to be controversial, but I think they should really focus on the kind of content and getting more content, which we’re trying to do with foreign language films and alternative things and less on whether the window is 30 days or 45 days. I just don’t think that’s going to make a material difference to their business at the end of the day, and for us, it makes virtually no difference at all.
We’re sympathetic to not trouncing on their theatrical release, but I think just way too much has been made of it and I don’t think that’s going to save the industry. I think more good content and more diversified content is much more important.

David Karnovsky

Okay. And then just two for Natasha. I guess first on the higher install year-over-year, how should we interpret this? You highlighted in the deck 40% growth but maintain the guide. Is it reasonable to assume the higher end at least is more achievable now? And then just on the Content Solutions gross margin, really outsized in the quarter. I’m assuming that had to do with China performance, but can you walk through the drivers here? Did any of that marketing shift that Rich mentioned a few minutes ago, does social play a role at all?

Natasha Fernandes

So our guidance for the year we reiterated is 145 to 160 for installations. It’s just simply a timing mix, David, as to exhibitors came to the table and wanted to install sooner than we had originally planned, which is a good thing. I mean, ahead of the slate that’s coming up, it is in everyone’s best interest to get installed, but it also comes down to timing of capital allocation from their end and what they’re able to do.
And so, from a mixed perspective in timing, we still believe the back end of the year is going to be the heaviest period of time. Normally, we install 50% of our systems in the last quarter. And so, I would say, it’s the same sort of mix as last year with respect to timing.
And then mix of JV versus sales as well. We still reiterate the same guidance we gave where it would be heavier towards JV this year, which is good as we look towards capturing the incrementality on the box office, which leads into the answer for your second question with respect to the margin and the Content Solution.
That is a prime example of what we’ve been talking about on our prior calls with respect to incrementality. When you start to work through the ability of achieving these higher box office levels, it flows mostly to the bottom-line without additional costs.
We do have a correlation slide in our investor presentation on the website. But if you look through that, when you start to see box office levels over $250 million, you can start to see a higher flow through incrementality of about 85% of every dollar is flowing right through from revenue to EBITDA and I think that’s where you’re starting to see that come through on that Content margin.
Also coupled with that is Q1, it was heavily driven by Chinese New Year. And so local language content does cost us less from IMAX remastering perspective and also from a marketing perspective. Rich touched on it just now, but marketing through social media channels versus print is obviously less expensive as well. So that gave us the opportunity on the margin there too.

David Karnovsky

Thanks.

Operator

Eric Handler, ROTH Capital.

Eric Handler

Thank you very much. Good afternoon. Thanks for the question. Rich, I wonder if you could just give a little insight into how much runway do you have in terms of visibility for what movies are going to be shown in China in 2Q and maybe talk about some other areas for local language content around the world in 2Q?

Richard Gelfond

Yeah. We have an awful lot of visibility, Eric, into China. As a matter of fact, earlier today, we had our IMAX China Board meeting, and we went through the slate for the rest of the year. And Natasha, jump in if you want to.
But I think there were like six or seven local language movies that have already been announced for this year. A number with IMAX cameras, a number of them, we’ve been on set there, we’ve seen clips, we’ve interacted with the studios, and we feel pretty good about it.
And if you look for a trend, Eric, that’s gotten more favorable to us over time. It used to be a little bit more of a black box process, but the China film regulators have gotten better at kind of giving us approvals more in advance for what’s coming in the film slate and what the films are about. And the studios and the filmmakers have been much more willing to show us footage and put together marketing plans.
So again, I know some of the names. I don’t know these films well enough to talk about them, but I could say that our CEO of IMAX China is quite optimistic about the slate of local language films for this year.

Natasha Fernandes

Eric, if it’s helpful, we have added a slide in our deck as well, but there’s 10 local languages confirmed in China that we’ve put on that slide to be a little more helpful to everybody to see visibility into this year. As well, there’s the Hollywood slate as well that we expect to come through.

Eric Handler

Okay. And then just as a follow-up, I wonder if you could talk about Sinners a little bit. I mean, 20% market share is fantastic. I wonder if there’s a few things that maybe you could point to why, how that got to -- how Sinners got to 20% versus other movies that are low-to-mid double digits. What sort of worked really well there?

Richard Gelfond

So I’d say a couple of things. Number one, it’s a really good movie and really well shot by an auteur filmmaker and it was close to 100% on Rotten Tomatoes. And as you know, IMAX delivers the best when it’s a really great filmmaker, it’s a really great film, and cinemaphiles really want to see it. So I think that was kind of, the film was the kind of film.
But maybe even more importantly, equally or more, is that Ryan Coogler and Michael B. Jordan really leaned into it, Eric. And I don’t know if you saw the piece that Michael, no, that Ryan created where he went through all the film formats and how people should see it and why they should see it in IMAX. And he did a lot of -- he kind of followed some of the Chris Nolan playbook, which is to talk about why it was important to him to make it an IMAX film, why people should see it that way, what the benefits are.
And then throughout the opening weekend, he went to a number of IMAX theaters throughout North America and talked about it and showed up. And I understand Michael B. Jordan showed up at the BFI in London over the weekend. And when they did talk shows and they talked about the movie, like IMAX was an integral part of the movie. And we’ve always thought that was a key point, but this is like a clear demonstration of that.
And then, Eric, also besides the indexing, a really good thing has happened this week, which is usually for an IMAX release, a Monday is typically 10% of the weekend’s gross, but on Sinners this Monday was 20% of the weekend’s gross. And then Sinners on Tuesday was 20% of the weekend’s gross. Now, I’m not talking about the percentage of box office that also held at 20%, but I’m talking about the gross proceeds. So that it bodes very well for the run.
And one of the things we were hoping was that because the movie was so good and so well received by fans and critics, that it would broaden out and that IMAX was a tool for it to broaden out. And again, I’m not saying it’s going to do numbers like Oppenheimer or Dune, but it’s the same kind of effect we’re seeing in very similar numbers, where the IMAX film has enabled this broadening out effect.

Eric Handler

Thanks, Rich. Appreciate it.

Operator

David Joyce, Seaport Research Partners

David Joyce

Thank you. I wanted to ask about the health of the consumer. Just wondering if you’ve had conversations, anecdotally, with the theater owners related to how well Minecraft and Sinners have done. And while Captain America overall was soft, I think he still did fine there. Just wondering if the theater owners that also have regular screens have any comments about, people skewing more to the IMAX showtimes. You did talk about having higher share, of course, so that kind of answers the question. But I’m just wondering, are they also, like, asking for more IMAX showtimes? Are they trying to fit more in? I’m just wondering if you had any more anecdotes about the consumer? Thanks.

Richard Gelfond

Yeah. I mean, David, as you said, you answered the question that, I mean, again, go to Nezha. I mean, this is in China where the consumers are not as prosperous as they are here. And it’s something we traditionally index in the 3%-ish range. And we did 7.5%. And at the end of the run, we were at 13%. So I think that’s kind of a test lab for consumers. It’s an affordable luxury. So although, obviously, there are challenges as there always are.
But going to an IMAX movie is kind of a special thing. And since I’ve been here, there are probably three or four recessionary periods and every year on the box office is up during those periods that I’ve been here than it was before. So if it’s something more expensive like vacation, travel, restaurant, I could see it having much more of an impact. But in a way, because this is something special and it doesn’t cost that much more, I haven’t really seen an effect from that and I haven’t heard about it from our colleagues.

David Joyce

All right. Thank you.

Operator

Omar Mejias, Wells Fargo

Omar Mejias

Thank you for taking my question. Rich, maybe sticking with China. In the US, historically, the box office has been resilient during recessionary periods as moviegoing remains an affordable form of entertainment. Can you provide any color on how the Chinese box office performs during recessionary periods and if you have any concerns that a potential economic slowdown could pressure consumers in China and limit attendance? Thanks.

Richard Gelfond

Well, my first comment, Omar, is during the first quarter, it was a pretty slow economic period in China and we set records by multiples. So we have some fairly recent data that we can draw on. But I just don’t think it’s going to be different in China. Remember, we’re in 90 countries. So I don’t think the Chinese behavior is different than other countries. And I think for a good product and well marketed, that the market will be there. And it’s too early to say, obviously, but we haven’t seen any evidence of that.

Omar Mejias

Thank you.

Natasha Fernandes

And I think the other thing to consider, Omar, is government support during recessionary periods as well. Like Chinese New Year, there was government support through there and we saw some last year and they’ve announced at the Beijing Festival as well that there’ll be continued support. So I think even from that perspective, that there is always support during these recessionary periods.
And when you think about it, the most discretionary part of moviegoing is concessions. And so they still want to go out and experience something. But there’s an opportunity to, if you really need to save money, you’re not spending as much on concessions, but you’re going to enjoy the experience.

Richard Gelfond

And IMAX does not make any of its money from concessions.

Omar Mejias

Very good. Very clear. Thank you, guys. Appreciate it. Very helpful.

Operator

Steven Frankel, Rosenblatt Securities.

Steve Frankel

Thanks. Rich, given the step-up in the number of film for IMAX titles and traditionally these were very labor-intensive DMR processes, what are you doing to make sure that featuring more film for IMAX doesn’t cause some incremental pressure on gross margin?

Richard Gelfond

Yeah. So first of all, DMR conversion is not labor-intensive, and we’ve made a lot of progress over the years of automating it. Obviously, there’s some quality control aspects where you have to check it and make sure it’s right. Second of all, for a lot of our foreign language titles, especially those in Asia, India, China, we outsource and we partner with local firms there that help with the DMR process and that was facilitated by us putting DMR in the cloud.
So our margins have gotten better on the DMR side over the years and we continue to look at that aspect of our business. So that’s a priority for us, continuing to evolve the process and continuing to make it more automated. So I don’t really see margins being squeezed. Do you want to add anything, Natasha?

Natasha Fernandes

I think the only thing, Steve, is the two-week windows and I think what I’m hearing from your question is that if you keep doing film for IMAX and they’re back-to-back, you’re going to lose the opportunity for incrementality of playing it longer. But I don’t see that as something necessarily hindering us in that the first weekend and the second weekend are usually your biggest box office recoupment periods.
And then we have the ability to find time in other spots during the year to bring titles back or to slot things in. I mean, you can go back to Maverick, which was a couple years ago, but we brought it back 4 times to 5 times throughout a year. And we’ve done that with other titles. We brought back re-releases. So whenever we see something that plays really well across the IMAX network, we look for opportunities to bring it back.

Steve Frankel

Perfect. That’s what I was looking for. Thank you.

Operator

Patrick Sholl, Barrington Research.

Patrick Sholl

Hi. Thanks for taking the question. I was just wondering if you could drill in a little bit more on, like, the available dating slots for the film to IMAX and just managing, like, international distribution. That also kind of conflicts with expanding the film for IMAX lineup in international markets.

Richard Gelfond

Well, we do local language films, as you know. Like in other countries, we use IMAX cameras. But you have to look at the slate and look at what the competition is from Hollywood and kind of see where you have open shows and open times and ways to do it. But we’ve been able to balance it. I think that’s what you were asking or I’m missing the point of your question.

Patrick Sholl

That was mostly it. Thank you.

Richard Gelfond

By the way, operator, we have time for a few more questions, if there are any.

Operator

Mike Hickey, The Benchmark Company.

Mike Hickey

Hey, Rich, Natasha, Jennifer. Great first quarter, guys. Congratulations. Thanks for squeezing us in, Rich. Appreciate that. Obviously, Rich, very unique environment here. We’re all sort of operating through and we definitely appreciate your confidence. Very nice to hear in terms of film product getting into China. I guess, how do you think about the risk that Hollywood film studios could delay films until they’re 100% confident that the films would be approved for distribution in China? I guess, are you seeing a mirroring in confidence, I guess, from the Hollywood studios in terms of getting film product in?
And then the second question, Rich, do Chinese consumers view IMAX as an American brand, and if so, do you expect to encounter any pushback or brand sensitivity as a result? Obviously, I realize you guys crossed the first quarter and have significant market share, but I’m just wondering as this sort of character continues, if there could be some pushback on the brand or not? Thanks guys.

Richard Gelfond

So Mike, because we’re buddies, I’m going to be exceptionally blunt, which is, I think, I answered the question about films getting into China for different times and maybe I wasn’t clear the Thunderbolts is opening in a week. There are five other films that have been submitted.
We’ve been told by the studios that they’ve been told by the Chinese that the films have been getting in and we’ve been told that by the Chinese and we’re talking to studios about the release patterns of those. So I’m not very concerned about that. Could there be small films that don’t get in? There could be, but I don’t think it’s going to have a material impact on our business.
Number two, historically, 25% of our profit comes from China. And this year we’ve already had a first quarter that blew away any expectation we had from the year. So if China suffered from small films, it’s virtually, it’s a very little concern to me. And I don’t know, Operator, maybe I don’t know how many more questions we could have. So I can answer more about China.
But the second part, Mike, was the consumer and the brand. So IMAX brand in China is. Remember, we have 800 theaters. It’s like a local prestige brand and in our brand surveys, people value it more in China than they do anywhere else in the world.
And I probably -- this is probably a minor point, but I’m actually a Canadian company for those of you who don’t know that. So I don’t know what the Canadian backlash is in China, but Mike, next time you’ll buy me a drink to apologize for too many micromanaging of the China question.

Mike Hickey

All right, Rich. Appreciate it.

Richard Gelfond

I’m not even being ambiguous or covering myself. I just couldn’t be clearer about it.

Mike Hickey

Thanks, Rich.

Operator

Thank you. I would now like to turn the conference back to Rich Gelfond for closing remarks. Sir?

Richard Gelfond

So thank you very much, Operator, and thank you all for joining. I mean, the pivot time for IMAX is right now. I mean, we’ve talked about now for a pretty long time, we’ve got eight film prime X movies in a row coming out, two of them that we started with Minecraft and Sinners on both beat our budget. So the Minecraft has and Sinners is on a path to beat our budget after that. We have Mission, Train Your Dragon, Formula One, Superman, Fantastic Four, I mean, there’s never been a period of time where that kind of line up film for IMAX has existed in front of us.
And this is this is it. We’ve talked about it for a long time. Now, it’s the time to happen and it’s all happening in the aftermath where I have to say, we partly got lucky in the first quarter. I mean, we had a Chinese film, which beat our previous record by over 3 times and we have that in the back. So I just feel very good about our business and very confident about the course we’re on, and now it’s our turn to execute and we believe we will. And I thank you all for joining and for your questions.

Operator

This concludes today’s conference call. Thank you for participating. You may now disconnect.