Please note that for important disclosures, including my personal holdings disclosures and Morgan Stanley disclosures, please see the handout available at the registration area or at the Morgan Stanley public website. With that out of the way, my name is Sean Diffley from Morgan Stanley Media and Entertainment Research today. Today we're very excited to be joined by Natasha Fernandes, the CFO of IMAX. Thank you for being here. Well, Sean, thanks for having me. Obviously, a lot of big news in the space. First I wanted to get to the big news on the studio front. Paramount-Warner merger. Mm-hmm. Netflix stepped away from the process. I wanted you to talk about how that impacts IMAX, how you're thinking about the slate going forward, and any other considerations we should be thinking about. IMAX is a global platform. I mean, we work with over 60 content partners around the world and partner with all the major studios. That obviously includes both Paramount, Warner's, Netflix as well, but also new studios like Amazon, MGM, and Apple, and then a lot of local language studios as well. I think from that perspective, we're very diversified in who we operate with and partner with. IMAX and Warner's, we've had a history going back many decades, and we have a really strong partnership. Many of Warner's titles are Filmed for IMAX, and they really lean into IMAX in the way that they deliver their content and the way that it's marketed as well. We believe in the strength of our Warner's relationship and even Paramount and Skydance. We have a long history with David Ellison and Skydance and a great relationship, actually. We've done many films with them. I mean, this past weekend, we just did Scream VII with Paramount. I just think that, you know, we're sitting in a very strong position. Whichever way this would have gone, I believe that IMAX is in the right position to deliver the best blockbuster content across our global platform. The one thing is that all studios are coming to the forefront of wanting to have a partnership with IMAX, particularly with respect to the filmmakers wanting to have a partnership with IMAX to be able to deliver that, deliver their content across our global platform. I think we're in a very strong position and, you know, this will take some time for it to all settle out and. In the meantime, we have a strong slate in front of us in 2026, and we have over 60% filled for 2027 and beyond still filling up. I think overall we're sitting in a very good position. Great. Clearly the market likes this outcome more for you than the Netflix outcome, but that was a helpful answer. Obviously, you do a lot with both studios. Mm-hmm ...you know, are positioned well, given how things will play out. You had an investor day back in December. You walked through a bunch of puts and takes. Maybe you could share with us what you see as the biggest drivers of growth going forward for IMAX over the next few years. Yeah, we have multiple growth drivers. One would be just our Filmed for IMAX program. More recently in the past year, we've really leaned into this program with filmmakers. Our relationships with filmmakers has really changed the way that our business operates. We first operate with filmmakers. In a lot of cases, filmmakers are coming directly to us first, and then we're working with the studios after. I think that that has shifted significantly, not only in the content that we are distributing across our IMAX platform, but the way that it's distributed, the way that it's marketed. That's leading towards growth because it's leading towards consumer behavior growth, right? More consumer demand for IMAX and wanting to see films made with our cameras in our locations across the globe. The other part is the growth of our network. you know, Part of our strategy is to continue to grow our network. We grew it 3.5% last year overall. If you looked at just the segmentation of that, we actually grew it over 8% in the Rest of World international markets. Then we grew it 4% domestically. and you start to think about how do you continue to capture more market share? Well, that's exactly how. Like, domestically, we captured over 5% market share with only 1% of the screens. In the Rest of World, we only have just over 2% of the market share. If you continue to grow our Rest of World footprint, that really is the opportunity there as well. Lastly would be the diversification in our content. Creating the opportunity for ourselves by having local language and having Hollywood content, but also alternative content as well, and other like concert films and live events, that creates higher utilization. Higher utilization in our network creates, more growth across both towards revenue, incrementality, and cash flows. Excellent. The IMAX window is becoming an increasingly important thing that studios consider when they're thinking about their theatrical release. Given that there's a limited number of weekends in a year and demand is growing, how do you navigate this bottleneck? Well, I think that the opportunity sits in, you know, looking at what's the content out there, how much is the studio and the filmmaker leaning into it, how is it tracking, like looking at the tracking information, then how is it being marketed, right? Really looking at what is our opportunity to maximize a weekend. Like look at this past weekend. We captured $60 million of box office on this weekend, the last weekend of February, that really there wasn't originally much playing. It was a carryover title from last weekend. Then we just recently pulled in Scream VII. Then we programmed Twenty One Pilots concert film. We had The Revenant 10-year re-release with a live Q&A as well. Then we did a whole slew of local language titles across our global platform. Really looking at what is that opportunity to maximize on every particular weekend, we spend time with the filmmakers. We spend time understanding the films and looking at does that make sense for the IMAX network? If they're leaning into IMAX, what does that mean? Does that mean we wanna give them more of the network and really give them more weeks as well? Like Oppenheimer coming up, we know that's gonna be a winner for the year, 100% we've committed three weeks to that title in our film locations because we know that that film is going to do well, and we're 100% behind Christopher Nolan in the production of that film. Great. You preempted my question. Getting a ticket for a blockbuster opening weekend can be extremely difficult. The Odyssey is an amazing example. You sold out almost immediately after they went on sale. Is opening additional screens with the same partner and the same theater complex an opportunity here, and is that already factored into the TAM that you've outlined? The one good thing is I think people will. You know, you just have to wait a little longer. Maybe opening weekend will be sold out. Just wait a little longer. We'll keep it open in the IMAX theaters. You can get a Odyssey ticket. I do think that there is an opportunity not necessarily to open a second screen in the same location. We talked about this a little bit at our investor day as well. Do we open a second screen in the same zone? Those would be zones that are high-performing zones where those locations are constantly sold out on opening weekends. There's an opportunity for sure for a second screen in the same zone, but not necessarily a second screen in the same complex. We've evaluated and don't really see the benefit of that. I mean, when you think about a complex with 20 screens, every screen is not highly productive, right? When we pick where an IMAX screen is going to be, we really look at what's the productivity of that screen going to be because we want every single one of our screens to be successful. Great. Turning to China, this business can be a bit less straightforward for investors to build conviction around. Maybe you could talk about the evolution of the China box office, local language film supply versus Hollywood content in the market. Just how you think about how that impacts your business and how investors should model it. China is a great market for us. I mean, IMAX in China is a very strong brand. We have a really strong presence over there. We are one of the top three box office generators in the country as well. We have fan clubs. They actually have IMAX fan clubs in different major cities in China as well. We're very popular, the brand and just the It's, like, equated to luxury as well, and that's very important in that market. Really when you're looking at the slate, it's a diverse slate. It's a mix of local language, but not only local language Chinese, local language Japanese and other titles as well. I mean Demon Slayer was one of our top performers in China last year, and that was a Japanese title. Then also, Hollywood content. You know, last year, of course, was driven by Ne Zha 2, which was a huge blockbuster for China. This year is gonna look a little differently. It'll be more diverse with having a lot more Hollywood in there. There'll definitely be local language content in there, but there'll be family films as well, and then there'll be Japanese titles coming through as well. How do you think about differentiation versus competitors in the Chinese market? I mean, one is our brand. you know, our IMAX brand. We take over 5% of the market share over there as well. the way that studios are leaning in, we're also using our technology. Filmmakers are using our cameras as well. Marketing, we do a lot of unique marketing things directly with the studios and with the exhibitors, specifically catered to IMAX as well. I do think that we have a really strong presence. We actually have 100 employees over there. We have a full operating office, and our CEO, Daniel, is well ingrained into the industry as well and connected. That's also all very helpful, and I think part of it is the partnerships. Like, China is a very big relationship, business and country. I think that we've built that out over there too. Great. Turning back to North America, you recently talked about doing more with F1. How should we think about more sports content coming to IMAX and how alternative content broadly is key to your success? This recent announcement with F1 has been, it's been really good for us. We've gotten a lot of good feedback from it. We originally only expected to do about 50 locations for domestically, and we've had a lot of exhibitors come back to us and say, "How do we get this?" Looking at, you know, what are the opportunities for expansion there too. We said we'd only start with five races, but we never know, like, whether or not we'll, there's an opportunity obviously to grow that too. I think, you know, part of it is working with Apple. We did the F1 movie with them last year. It was highly successful. I think it was our 2nd top Hollywood film last year. Moving into these live races, I think is another opportunity. We've also worked with DAZN to do soccer in Europe. We've done the NBA in China. We've done League of Legends, so gaming, e-gaming. I think that live content is a whole market out there, right? When you're looking at the opportunity to create higher utilization on the IMAX screens and looking for diversity and looking for growth, I think that's where those are the fillers. Those are what's gonna help you. You're gonna have major Hollywood releases, or you're gonna have some local language, but there's always opportunity for more programming. This is where you get that chance. You think about an F one race on a Sunday morning, that's an opportunity because the theater would have been closed, right? Now you're creating some more box office for not only IMAX, but also for our exhibitor partners who are working with us. That makes a lot of sense. I'm embarrassed to admit that I watched the F1 movie on the flight here. Oh, don't even say it. Don't even say it. Obviously, I wish I saw it in IMAX. That's embarrassing, actually. I knew I was waiting for some responses on that one. You could throw tomatoes. You need to see it in IMAX. We might have to just re-release it just so you can see it because, like- That's kind of what I was asking if you would do that for me. I wanted to talk about international ex-China. Which markets do you see as the fastest growth and which are most under penetrated and you see yourself turning your attention to next? The rest of world has a really big opportunity for us. I mean, since 2019, I think we've grown our rest of world footprint about over 30%. Just starting there's a lot of growth to be had. We are only at about 30% penetration right now, so a lot of opportunity when you look at our TAM and ability to grow that market. Then, you know, Japan last year, I think we grew over 17% for Japan just in one year. That was coupled with the fact that Demon Slayer was coming out. A lot of our exhibitors were wanting to be open for Demon Slayer because they knew that was going to be a huge title, and it was for us. It was an over $80 million title for us, and we released it. We were the only premium screen for it to be released first. We had an exclusive window. It went to all the screens. That was a really big opportunity. Australia, I think we've more than doubled where we were last year. I mean, last year, I think we started the year at two screens. We ended by over 10 screens for Avatar. Europe, France, we've had a lot of growth. Germany, we've had a lot of growth. We just did our first German title last year. That led to more growth. Last year, I think we did 4 new markets for different types of local language titles. Even this year, we're now doing a Brazilian title 2DIE4. What we've noticed is as you start to do those local language titles in the market, it starts to open up the opportunity to expand the network. The rest of world really is that big opportunity. I mentioned the market share. Like if domestic and China are sitting at over 5%, but our rest of world market share is just over 2%, you can see where the opportunity for growth is, and that's all incrementality in our model. It's not costing us any more to distribute that film to those markets. When you look at that incrementality in our model, it'll just flow right through to gross profit in our bottom line and cash flow. That's great. That makes a ton of sense. As we think about kind of ex-US growth, how do you think about FX and inflation affecting your economics internationally, including pricing, costs, receivables, collections, et cetera? I mean, we are a global company, so I'm not going to say we're not subject to it. Definitely subject to FX and inflation. All of our contracts include CPI inflation, so we do also charge inflation on our contracts to offset some of that. Our box office is impacted by FX, but even if you looked at last year, it wasn't impacted as much year-over-year by FX because it's so global in the way. While some countries may increase, some will go the opposite direction and they can offset each other too. So I think that that's what's helpful about a global model as well. Got it. Okay. Your business has shown good operating leverage in the model by both improving margins and cash flow. Can you describe some of the dynamics and that give you confidence on this expansion that it can continue for the coming years? Definitely. I mean, I manage the P&L with our executive team, so I am very confident in our ability to deliver on what we've promised. I mean, we ended the year with 45% EBITDA margins above our guide last year for 2025. It's multiple factors. One is the box office and the incrementality that comes through in that box office. And this year we're guiding towards $1.4 billion. It's a higher box office level, but our costs do not grow at the same rate as our revenues. There's a lot of opportunity for the incrementality to fall through in our model. You would have seen it even just very clearly in 2025, where not only did the adjusted EBITDA margin come through at 45%, but also our cash conversion rate was at 46%. It came through at a very high rate as well. The opportunity to grow that, and we said that that would grow to over 50% in the next few years as well. You know, part of it is looking at where do you find opportunities for cost savings or for continuous headcount analysis, which is stuff we do as well. On the operational side, looking at SG&A and all of those pieces. It's a full model of looking at where your opportunities are and thinking through how do you maximize that return for your shareholders. Excellent. Turning to capital allocation and the balance sheet, you recently refinanced your convertible debt. Your cash flow profile looks very healthy going forward. With that in mind, what's kind of your ideal leverage and liquidity profile for the business? Yeah, I think we've done a lot of work in 2025, and we set the balance sheet up in a really strong way for the future between doing, renewing the revolver and expanding it by $75 million, but then also, securing the convertible notes and refinancing those as well at only 0.75%. I think our balance sheet is in a very strong position for the future, and it enables us to do, you know, the future investment in JVs and growing our network. It enables us to do share repurchases, enables us to do expansion for different R&D investments as well, like how we did the film cameras last year. I think that, you know, it's all very important for us to protect our technology moat and continue to advance that as well. Really making sure that we have the capital to be able to do that. A follow-up to that is, how do you think of the trade-off between buying back stock and investing in the network, especially when the content slate is really heating up? I don't necessarily see it as a trade-off. I think there's opportunities to do both. Like, we have a track record of providing and using our excess cash to do share repurchases. We've even borrowed to do share repurchases as well in the past couple years. We do see that as a good use of our capital. One thing we see right now imminently is growing our network would actually provide a greater and faster return right away in that, the faster we can grow our network is the more that the incrementality will fall through our model and be able to every year beat our best, right? That's the goal, is to continue to create growth year-over-year. Growing that network enables for us to capture more market share, to increase our cash returns, and then, of course, those cash returns will go to shareholders. Got it. Okay. AI is obviously, like, the topic of the conference. I'm curious, how do you view IMAX in an AI world? Obviously, getting into a theater and kind of experiencing that firsthand is almost the, you know, way to solve people drowning in AI slop. How do you think about AI impacting your business more broadly? Yeah. I mean, when you look at going to the IMAX experience, I'm not sure that's going to see something AI created, necessarily. I do think that there's roles that AI plays. I mean, you look at. We're global, so we're in 91 countries, and we're doing, you know, we're doing over 100 pieces of content a year or plus. When you're looking at that, you look at versioning, you look at, like, dubbing, for instance, there are opportunities for AI to do that instead of someone manually typing all of the versioning through, right? You look at cost reductions on the remastering side and the ability to use software and algorithms to be able to enhance and create the IMAX versions of films, opportunities there as well. Obviously, just as any other company in your back office, looking at ways to use AI to create efficiencies through the way that you operate, and therefore save on SG&A as well. I see it. The other opportunity for us would be as a revenue driver when you look at programming. One of the things that we've started to do in more recent years, and that's part of the reason that we've had such success in executing against our targets, is because of looking at the ability to program our screens to create more opportunity for higher utilization. Using data, like collecting data, large sums of data, and sifting through that manually can be cumbersome and very hard and a very long and arduous process, right? If you're using AI to collect that data and analyze it and then tell you, "Well, actually, this location is only showing three shows," whereas they had capacity to show five shows, well, now you just created two more shows full of revenue for yourself, right? Looking at that, looking at, okay, where does horror titles play? 'Cause they don't play everywhere well, but maybe they play in select markets well. Historically, we would've had to pull out our spreadsheets to see where a past horror film played well. Well, now you can use data to collect that very quickly to be able to say, "Okay, let's pivot very quickly and program." Adding new content into your, into your pipeline can be easier now. Like, the fact that we just added Scream in, now we could easily program that through and know where to play it and to be able to maximize box office. Same thing, we just added, this coming weekend is The Bride!, and we just added Hoppers in just a couple weeks ago into the slate. Looking at, you know, how do you constantly work towards maximizing your programming opportunity before you, and AI's a good opportunity for that. Really helpful. I wanted to open it up, see if we had any questions in the audience. Yeah, there you go. You have to turn it on. You could yell it out. Is it on? I have a exhibitor question. Brands and also structure. Yeah. For those of you who didn't hear, our relationship with exhibitors and globally as well. We have really strong relationships with our exhibitor partners. I think we have over 250 partners across the world that we work with. I know that many of them have their own sort of platforms and, but they also have an IMAX. I think that's part of it, is understanding that IMAX is one of the offerings they can have. It's a very strong offering that meets consumer demands. I think that's what drives a lot of the behavior you're seeing with not only the way that we're expanding with exhibitor partners, but also the future and the ability for us to continue to expand comes out of the fact of consumers demanding IMAX. You're looking at even now content coming exclusively to IMAX. Well, you know, with Narnia coming out later this year exclusively to IMAX, or even these F1 races exclusively to IMAX, there is that opportunity where our goal is to bring more box office not only to IMAX, but to our exhibitor partners. I think that that's where we're able to help lift the industry as well by contributing more in that way by us working through our relationships with content producers and creators to bring more content in. We generally have very good relationships with our partners worldwide, and I think you see that by the way, not only do they come back to the table and upgrade their existing locations, but they're usually upgrading and expanding to new locations as well. I think that shows sort of the way that our relationships work with them, too. Understand the grand scheme of the timing. Would it be possible just to discuss a little bit more the strength in China and Japan in 2025 and what the timing of that will look like in 2026, just from a comps perspective? I know we've already discussed it, I'd love to just. Mm-hmm. make sure I'm understanding it correctly. Thank you. I'm sure you're thinking about the Ne Zha effect from last year and how, you know, 46% of China's box office came in through Q1 last year, and that's not what it's going to look like this year, for sure. This year is going to be a lot more balanced in the way China's box office comes through this year. Mostly because two of the films that we had originally thought would come through Chinese New Year actually are now looking like they'll come through in the summer period, which is peng Hu and Once Upon a Time in the Middle East, which is a Filmed for IMAX title, and then the potential for Creation of the Gods three somewhere in the summer or fall as well. There's a stronger Hollywood slate this year in China. That also will contribute. Project Hail Mary is coming in now. We started the year with Avatar, but Project Hail Mary, there'll be Star Wars, and Odyssey should do very well in China. We'll actually get to split screens in China later in the year with Avengers and Dune and have both playing there. I think that you're gonna see this year a little more balance between local language versus Hollywood. I think China last year for local language is probably closer to 70% of the year, of the entire year. Whereas this year, you might see it come through a little more balanced, not only from the split between local language and Hollywood, but also throughout the year a little more even. The way that we look at it from a global perspective, I mean, we've guided towards $1.4 billion. That is all of our regions, though, contributing, right? When we look at the way that even last year, domestic and Rest of World contributed, they are contributing generally at a faster pace because you're growing your network there as well. Also we're taking more market share naturally by the marketing, by the filmmakers leaning in, by just consumer demand as well. I do think that you'll start to see domestic and Rest of World continue to grow at a faster rate as well, all contributing towards our global goal of $1.4 billion. You rattled off some of the franchises that you're most excited about, but if I had to pin you down to maybe one or two in 2026 that you think could maybe present the biggest upside surprise to IMAX at the box office, what would they be and why? I'd love to say Odyssey, but I don't think anybody thinks that's gonna be a surprise. Right. It's definitely going to be, the title that delivers. Yes. this year. I think Narnia it's a great experiment, and so we're all looking forward to seeing what that will do because IMAX will be the launch platform for that title. I'm excited about, well, Michael, and I'm excited about that title. I'm also excited about Project Hail Mary. I actually just recently started reading the book, and it's a very good book, so I'm excited to see what that title will do as well. You have clear winners with Dune coming in later in the year, too. This year has a lot more hits. You can see a lot more hits between Project Hail Mary, Super Mario, Michael, Star Wars, and then Odyssey, of course, is gonna be massive. Leading into later in the year, you're gonna have Narnia and Dune as well. Then you've got all these family titles, which we've been capturing more market share on family titles too, like Toy Story five is coming, Minions as well. I think you'll start to see the year fill in in a really strong way. You're gonna be excited. It feels like- You can't watch things on the plane. I know. It's embarrassing. That's very embarrassing, actually. Just listening to you rattle off all this, all those titles, does it feel to you like 2026 is really the year that, you know, we kind of got out of the strikes and all the issues around that, and we're kind of hitting our stride? Like, what's how would you assess the 25 versus 26 and beyond? I mean, 25 was a record year for us. For IMAX, yeah. I mean, we guided to $1.2. We delivered $1.28 billion. I think we've already hit our stride, but we're continuing. Our goal is to keep raising that bar and executing against it. I do think the industry as well is growing stronger. I think that will also be helpful overall to the entire industry. I think that, you know, we're growing our screens, and I know that we're contributing as well to that. That's been a good place for us to be. Great. If we were to look into the future and we got to 2028, what would you want investors to say IMAX did better than anyone else out there across kind of media and entertainment, you know, over that 2-year period? I'm the CFO, so I'm gonna say that we executed better than anyone else did, for sure. That's my goal, is to make sure that we're always executing against what we did, but also that we overdeliver, that in the end, we deliver better than what we put out there as our guidance. You know, I think that that would be a really great thing for investors to be able to sit back and just like we did in 2025, delivered stronger than what we guided. Excellent. Perfect place to end. Thank you so much, Natasha. My pleasure.