Premium cinema technology company IMAX (NYSE: IMAX) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 35.1% year on year to $125.2 million. Its non-GAAP profit of $0.58 per share was 22.9% above analysts’ consensus estimates.

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“2025 was a transformational year for IMAX, in which we took our performance to the next level and firmly established IMAX as a premier global platform for entertainment and events,” said Rich Gelfond, CEO of IMAX.

Company Overview

Originally developed for World Expo '67 in Montreal as an innovative projection system, IMAX (NYSE: IMAX) provides proprietary large-format cinema technology and systems that deliver immersive movie experiences with enhanced image quality and sound.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $410.2 million in revenue over the past 12 months, IMAX is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, IMAX’s sales grew at an incredible 24.5% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. IMAX’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.6% over the last two years was well below its five-year trend.

This quarter, IMAX reported wonderful year-on-year revenue growth of 35.1%, and its $125.2 million of revenue exceeded Wall Street’s estimates by 3.8%.

Looking ahead, sell-side analysts expect revenue to grow 7.2% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will spur better top-line performance.

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Operating Margin

IMAX has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 10.9%, higher than the broader business services sector.

Looking at the trend in its profitability, IMAX’s operating margin rose by 16.2 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, IMAX generated an operating margin profit margin of 19.3%, up 9 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

IMAX’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

IMAX’s EPS grew at an astounding 23.8% compounded annual growth rate over the last two years, higher than its 4.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of IMAX’s earnings can give us a better understanding of its performance. IMAX’s operating margin has expanded over the last two years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, IMAX reported adjusted EPS of $0.58, up from $0.27 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects IMAX’s full-year EPS of $1.44 to grow 16.7%.

Key Takeaways from IMAX’s Q4 Results

It was good to see IMAX beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 5.5% to $38.51 immediately following the results.

Sure, IMAX had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).