Good day, and thank you for standing by. Welcome to the Q2 2025 IMAX Corporation Earnings Call. At this time, all participants are in listen-only mode. 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 raised. To withdraw your question, please press star one one again. 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. 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. 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. 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 a 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. 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. 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. Coming into the second quarter, we are 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 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 8x in our entire history, and three of those milestones came in this second quarter. 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 Filmed for IMAX strategy, the higher level is business as usual. In May, a New York Times feature posed a 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. Studios are competing more fiercely than ever to secure IMAX release windows and make IMAX a centerpiece of their marketing campaigns to event the size 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 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, 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. 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 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. 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 70 millimeter 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. 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. The second quarter 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. 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 weeks 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 for the Mission Impossible franchise and a double-digit percentage of the film's overall gross across its entire run. 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 in IMAX Expanded Aspect Ratio by our long-term partner Joe Kosinski, 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. In China, the much-anticipated film for IMAX release Dongji 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. At the current pace, we expect to set a new record within Q3. The second half slate looks promising. This weekend, Marvel's long-awaited Fantastic Four opens worldwide. The Rotten Tomatoes scores and pre-sales are pretty strong. Our Filmed 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 markets. The year concludes with the second installment [guess-Awaken] 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 and 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 August 8. Amazon will release its first ever Filmed for IMAX title next year with Ryan Gosling's project Hail Mary. We were very pleased by the announcement 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. 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. Thank you. 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 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. 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 second quarter 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. 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. The quarter 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. 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. 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 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. 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. 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%. 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 2024. Turning to cash flow and the balance sheet, 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 tend to be first half 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 first half related to partnering with exhibitor customers to grow and upgrade the IMAX network through joint revenue- sharing arrangements. 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 a significant announcement last week of our amended and enlarged credit facility, which we expanded from $300 million- $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. 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 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 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 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. 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. 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. Good morning and thanks for the question. Maybe first, Rich, given the strong demand for my IMAX slots and studios and filmmakers, do you see a future where all or almost all films you play across your circuit are Filmed for IMAX films? Just curious on how you see the evolution of the number of Filmed for IMAX movies across your network. I don't think it'll evolve to that point, Omar. We want to make Filmed for IMAX something really special, including, you know, the right kind of content, the right visual, the right sound. There are certain movies, while, you know, they might be really good movies, they just don't demand that kind of treatment. As you know, when it's a Filmed for IMAX, it gets a two- week minimum run and I just don't think that all the movies will be suitable for two wee- run. As you know, the slots are what's really valuable, like the IMAX play time. 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 you know, this quarter shows the results were so strong, the indexing was so strong. So just to give you a sense, in 2026 we already have nine Filmed for IMAX titles and for 2027 we already have at least eight. It is something we're going to lean into for the right content, but we won't make it ubiquitous. No, that's very helpful. Maybe switching to some recent media reports that have been stating that U.S. theater chains are under talked 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 U.S. exhibitors and potentially work together and grow the pie? Just curious on your thoughts on that. 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 and they're kind of scurrying to come up with a strategy. A lot of people have tried to create competitors 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 L.A. and New York City. And 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. Please stand by for our next question. Our next question comes from Chad Beynon with Macquarie. 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. 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, showing their partners that it helps to be with a brand that has bigger scale and marketing benefits? Thank you. 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. But I think we're going to use that carefully. So you could see in the quarter that 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 to do a Filmed for IMAX release where 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. 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, 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. 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. Okay, thanks, Rich. 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? Should we assume kind of a normal tax rate as that flows into free cash flow for the back half of the year? Yeah, 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. That's our goal as opposed to where we've been historically. Great. Thank you, [guess-Beth]. Thank you. All right, now our next question comes from Eric Handler with ROTH Capital. 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, 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 per event scale higher, you know, just the opportunities there with those. You know, where would you like to see the local language percentage be for overall box office as well? 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 years. Obviously, Ne Zha II distorted that to the upside a little bit. But if you think about that, look at the North American exhibitors, for example, it's close to zero, 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. And 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. And the last Demon Slayer did $30 million, 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. In a way, you see how Netflix has used it really intelligently to grow their network. 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. 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 going to want to play what they've contracted to get. It's more of a filler than it is something that's going to carry the programming. With that said, I think we have something like seven music events coming up in the next few months. So we have the Dead & 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 release a Rolling Stones movie later in the year. There's just a lot of high - content and there's a lot of interest in the music community to have more of it. 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. 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'll have the same financial impact that either the Hollywood slate does or the local language slate. That's helpful. And also, since you mentioned [guess-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, but given the success you have, 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? Well. Eric, in going through the past, you didn't mention the Ne Zha II, 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 we've been successful not only in Japan, but in the U.S. and China and a number of other markets with it. We do have a pretty good track record. 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 in to the right kind of animation. 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 and we have pretty good relationships with the anime studios and the animated studios globally and we've always valued it. For the right movies, we'll continue to lean into it. Thank you. 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. Thanks. Good morning. Hey Rich, quick question for you. I know it's been at least there wasn't CinemaCon and a little bit since then of some call for lower pricing by some of the studios on tickets. And we've had the 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 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 the 9th of July. 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 meet 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 tap into a moviegoer base that you may not have been able to before and that could be maybe a little tailwind towards your market share potential, kind of moviegoer awareness longer term? 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 this year right now. I mean, I know we reported the quarter, but this has been extremely strong since then. 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 for us. 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 a year from now. Especially film is something that the exhibitors don't really like to discount. It virtually sold out within 24 hours, in some cases much shorter time than that, minutes. 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. 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 think I understand why the exhibitors do it. You know, 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. That's what's driving rethinking the discount days. IMAX has exclusivity zones. We have IMAX film, we have filmmakers leaning in, extra costs and making an IMAX film. I just don't think discounting is likely to change the dynamic. Thank you. Our next question comes from Steven Frankel with Rosenblatt Securities. 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 SSIMWAVE using their technology, we 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 it. You don't have the upfront costs of having to put all that, 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. 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 and I think you'll see the base expanding, but not with a large cost associated with it. Great. Thank you. Thank you. 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 second half of 2025, your confidence level that you can grow your GBO in 2026 and have a quick follow- up? Yeah, Mike, I mean, I have an incredible amount of confidence and that because our 2026 slate is almost all filled up and just some of the high points. We have the Avatar carryover, you know, in early 2026, 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 got Moana. Back to Eric's question. We've got Minions 3. In the fourth quarter, we have Narnia, we have Avengers, we have Dune Part Three. This far in advance, it's unusual to have it virtually all opt in. 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 IMAX 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 one and two 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 all of those things give us confidence about 2026 and beyond. 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 U.S., which is obviously your strongest market. Do you think this momentum here, Rich, in installations can continue into 2026, or 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? 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. 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. Nice. Thanks, guys. Good luck. Thank you. Our next question comes from Drew Crum with B. Riley Securities. 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 second half and the drivers for achieving or perhaps exceeding that low 40% threshold? Thanks. Sure, Drew. When we look at adjusted EBITDA for the first two quarters, we've been very consistent at our 42.6%. There's puts and takes that go into each quarter, 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. P1, for instance, was heavy on local language, which costs us less and creates and leads to a significant incident 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. All of that comes with the decisions you simply make on ebbing and pulling your marketing and how much content you push into each quarter. Thank you. Our next question comes from David Karnovsky with JP Morgan. Thanks, Rich. Maybe I'll just go back and ask one more about 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 your decision to play the Narnia film next Thanksgiving. I just want to give you a chance to respond. Is that a fair assessment and how would you gauge your relationship with the domestic exhibitor community currently? Thanks. 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. And you know I talked to 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. 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? 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. 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. One little one. I don't mean to pick on anybody, but there's an exhibitor in Europe called the Vue that's actually been through two restructurings in the last three years and missed the PLF boom and they're 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 has been in business for 55 years. We have technology, we have relationships, we have lots of competitive advantages. It's almost like, and with no disrespect to Coke, if I came out, they 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. Thank you, Rich. Thank you. Our next question comes from Patrick Scholl with Barrington Research. 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 and what other, I guess, would be puts and takes might go into that growth. So the film theaters have done extremely well when there's IMAX film releases. This year for Sinners, the numbers were incredibly strong because Ryan Coogler filmed with IMAX cameras and Warner Bros put out film prints and they were extremely high capacity. Remember, we did over 20% in each of the two weekends on the initial weekends that we played it. Obviously, Oppenheimer last year, we all know how that movie performed, very good. I mentioned the pre-sales on pre-ticket sales for Odyssey. So we're always looking for it. 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. 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 released, 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 around it. Okay, Thank you. Our next question comes from Steven Laszczyk with GS. 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 the first half of the year that you called out in your prepared remarks. Be curious how you think about that trending into the second half 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 2026 and beyond. Thank you. Hi Steven. Cash flow continues to strengthen. We're looking, as we look at the target, 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. Our free cash flow continues to improve as well. We were historically at around 50% and we're trending towards that as well. If 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 an 85% conversion rate. That's what will continue to generate the cash flow. 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 II that's still out 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 the Ne Zha receipt coming in then. Thank you. We have time for one last question. It comes from David Joyce with Seaport Research Partners. 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. You know, film remastering and distribution was up year-over-year, but system rentals take rate compressed by 40 basis points. What would explain that, please? There is always different puts and takes, David. Sometimes you can have upgrades of theaters, and when you're upgrading a theater, you'll have to write off the old asset and put in the new theater. 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 is 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. You can see it in Content Solutions. 66% margin was 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. Thank you. This concludes the question- and- answer session. I would now like to turn it back to Rich 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 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. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.