All right. Good afternoon, everybody. My name is Eric Handler, Media and Entertainment Analyst here at Roth Capital. Very happy to have with us today Natasha Fernandes, Chief Financial Officer of IMAX. Natasha, welcome. Well, thanks for having us, Eric. Let's talk a bit big picture for you guys. Can you maybe talk about your broad strategic goals for this year? Sure. I mean, 2025, we're coming off of a record year, and we are excited about what's in front of us. We had a recent Investor Day in December and talked about long-term targets too. We really feel like we have set a new stage for ourselves as to where we're going in the future and creating growth year-over-year. As we look at our goals, I'd say the two major kind of themes that are coming out of that would be strengthening our filmmaker-studio relationships and really leaning into that a lot more. I mean, a lot of our conversations and the reason why we have a film backlog now is because we're having those conversations with filmmakers so far in advance now. And they're coming to the table with their ideas and stories and wanting to see how IMAX can be part of it and a real piece of it as they work towards telling their story. The leaning in of that. I mean, Project Hail Mary this past weekend is a phenomenal example of it. Filmed for IMAX, using our digital cameras, 16 film locations. We indexed 20%, domestically, and actually- 20.3. I'll give you the 0.3. 20.3. All right. I have an even better stat for you. All right. Monday's performance was 24% domestically, so it brought in another $3 million on Monday. I think when you look at it, just even increasing in indexing as the film run goes on. Not only that, the way they leaned in on the marketing, like Filmed for IMAX and they did some really unique things. Have you ever seen an IMAX screen go into outer space 110,000 feet into the stratosphere? They actually put forward this marketing. Our tech team worked on it, creating an IMAX screen that basically was elevated out and played the IMAX trailer and live from L.A., the premiere. Amazing. Amazing the way that they leaned in. Part of that is really leaning into the IMAX of it all through the way that the conversation is happening in order to elevate the way that the film plays and for consumers to understand this is not a film you sit at home to experience. You need to go to the movie theater to watch this film, and you need to see it in IMAX, of course. That is really the way Amazon leaned in. A great partnership. I mean, it happened last year with Apple and F1, and now Amazon and we are excited for the future on the partnership front with respect to filmmakers and studios. But I'd say the other kind of major goal for us is continuing to create and strengthen the differentiation in our unmatched IMAX experience. Our technology model and investing in that and investing in, building out, not only our network but that differentiated experience, whether that is our cameras and the technology that filmmakers use there, but then also the way that the sound and the look and the feel is as well from a visual and sound aspect. Because the differentiated experience is the reason you go out to watch a movie in IMAX. Yep. You did mention this year is expected to be another record box office year for you guys. You know, looking at global box office, about $1.4 billion. Now, it is well known. 1Q does have a bit of a challenging comparison just because of the record performance with Chinese New Year last year and Ne Zha 2. You did have a great weekend with Project Hail Mary, but it really seems like things really should be taking off now. 2Q looks great. 3Q looks great. 4Q looks great. What gives you confidence in, you know, that $1.4 billion outlook? Yeah. I mean, the challenging Q1 compare, that's not a surprise to us. We knew that. It is not normal that China would have had 46% of its box office earned in Q1 for us. That's what happened last year. Normally, it's about a 30% run rate of Q1, right? When you look at it, we're doing fine for Q1 the way we would have expected for this year and the way we built up to our $1.4 billion. When you actually look at how many opportunities there are for outperformance this year. Last year for IMAX, we played one film in the IMAX network, Zootopia, that grossed more than $1 billion. This year, there's a lot more opportunity for more films to gross over $1 billion. You're looking at Super Mario, which is coming up very soon. Star Wars, Odyssey, of course. Dune. Like, there's lots of opportunities, whereas, last year, less, right? You look at just from that perspective the opportunity. Secondly, our increase in indexing. Project Hail Mary indexing 20%, 24% on a Monday. That is very real when you only represent 1% of the screens in the domestic market or less than 1% globally. If you continue to create that repetitive nature of indexing, higher indexing and the way that the filmmakers and studios are leaning in as well, that creates the opportunity to hit the $1.4 billion. Of course, local language contributes significantly to that too. I'm gonna talk about local language in a second. Yeah. You know, it's been fascinating with local language in this last, you know. It's not unusual for a film for IMAX movie now to index, you know, 20%. We're seeing that more often. Can you talk about the evolution of how that Filmed For IMAX strategy has evolved and how that sort of continues to proliferate? Yeah, it's a really important part of our strategy and our future growth as well. I mean, as I said, it's what's creating our film backlog 'cause if a filmmaker is using our camera, that means they're coming out and having a conversation with us a couple years out before they're releasing the film. That's part of it. We're at the process and the part of the phase where we're maturing the program, and we're getting to the point of realizing what works well, what doesn't, and so we can be more thoughtful about it. I'd say a few years ago, Filmed for IMAX meant every film that's Filmed for IMAX is fully exclusive to the IMAX network for two weeks, guaranteed. Now, there's evolutions of that. Sometimes we'll do a guarantee three weeks. Christopher Nolan definitely has our network for three weeks. There is no question about it. However, there are other titles that it's non-exclusive now, and for sure, you can use our cameras, and you can lean in on marketing, but we're not gonna guarantee you the network. There's almost different levels now, and we can do that in a way that we can then enable ourselves to maximize our box office performance and help our exhibition customers as well maximize their box office performance. Let's talk about, you know, local language. I mean, you are much more than a Hollywood story. Local language has been expanding rapidly in your business. Can you talk about, you know, what's been happening with local language and first it was China, now you're looking at more markets. H ow far can this go? Yeah, I mean, a handful of years ago, I'd say we were just China for local language. You know that. You've been following us a long time. You look at where we're at now. I mean, a quarter of our box office is essentially local language, but when you look at the number of titles, I'd say we were less than 20 titles a handful of years ago, with more than half of that being China. Now, we're aiming towards 75 local language titles this year with predominantly being outside of China. That's a big difference when you're looking at how do you create higher utilization across the network? How do you create incrementality in the box office and really just create consumer demand and behavior, right? As we expand into the rest of world, like last year, we expanded our network 8% in the rest of world markets. If you're expanding your footprint, you gotta give the consumers what they want, and then you expand the network further. It's a great cycle to have. A lot of our conversations on the sales front is happening in the rest of world regions. You need that local language to keep fueling that growth in the rest of world too. I imagine, you know, there's a lot of markets where Hollywood is less than 50% of the revenue. To have that local language opportunity is really the best way to improve the efficiency of occupancy of a theater. Oh, completely. I mean, look at Japan last year. Amazing with Demon Slayer, and we grew our network 17% in Japan last year. All predominantly before Demon Slayer because they wanted to be open for it. I think Japan is one of our biggest growth markets and opportunities. We're only about 40% penetrated in Japan, so I still think there's a lot of opportunity there, and they're high-performing locations. India, at this weekend, we actually, I know we did Project Hail Mary domestically, but in India, we did release, and if I say it properly, Dhurandhar, which actually is the second biggest Indian title overall, ever, and it was our biggest opening in India ever. I think that that's an opportunity too, and I think we're less than 25% penetration in India, so a lot of opportunity for growth. Now, what about alternative content? I think at your Investor Day, you said alternative content is expected to grow about 20% this year. What's driving that growth? What are people interested in with alternative content? How do you think about programming alternative? Oh, I hear a lot of feedback from you all the time of what you're interested in. There is a lot of sports, music, concert films like EPiC, the documentary for Elvis. It looked phenomenal in IMAX. Like music, if you can't make it to the actual concert, why would you not wanna go see it in an IMAX theater? Like, the reality is feeling the music. I have been to multiple concert events for IMAX, and people are standing in the theater, and they're dancing. Even if you go to an Indian title, like RRR, people went on the stage in one of our L.A. locations and were dancing on the stage. Like, it's very real, the communal experience that you wanna have when you're watching content like that. Music, concert films, whether it's live or film. Sports, a really big opportunity. Obviously, we've announced the F1 live race events that are starting in May. Five of them across, I think it's 50 domestic locations that we're gonna do. You know, we've had League of Legends in China, so e-gaming, which, you know what's great about all of those things? You are opening up the opportunity to introduce IMAX and theatrical to new consumers. 'Cause these are people who don't normally go out and to watch movies, or they've never been introduced to IMAX before. On our exit surveys, we actually got a lot of feedback that, you know, now they're a fan. Like in Korea, we did a concert film, and it was, like, women aged, I think it was age 50, right? For the concert film, and they had never been in an IMAX before, but they are now IMAX fans on the exit surveys, right? I think part of it is just creating additional consumers who are now gonna, when they wanna watch a movie, they're gonna come see it in IMAX, creating higher utilization and incrementality to our model. All right. Maybe we need some IMAX sports bars. Sure. Get that. There's alcohol in theaters. Very true. W hen you look at the partnerships that you have developed over the years and, you know, you've got a good relationship with Apple now. You've worked well with obviously Amazon MGM this weekend with Project Hail Mary. One of the more contentious Hollywood, you know, theater relationships. It's been with Netflix. You have a Netflix exclusive this year. Can you maybe talk about what you're doing with Netflix, and maybe where that can go over time? Yeah. I think what's great about that is we're bringing content that was never going to make it into the theaters. We're giving the opportunity to make more box office overall for our customers and for ourselves. To me, that is a win overall to just create added opportunity for more content. Netflix and that partnership, it's great. I mean, really it stemmed from, comes back to your first question about our goals. It stems from the filmmaker. It's Greta Gerwig who came to us. It's not Netflix. We're excited. It is exclusive. On an indexing front, I mean, it's 100%. Not 20%. It's 100%. I think that's a great opportunity. Also whoever or any of our customers that have an IMAX location, that is added box office to them too. We're excited for what that will look like. I mean, if it's a success, think about the fact that it's a franchise, and so what does that then look like for added content down the pipeline as well? Now let's talk about the other side of the business. I mean, movie business, you know, you've got a great backlog of movies coming. You're going global, with more local language content. You also at your Investor Day, you increased your TAM, for the potential number of screens or systems that we could see throughout the world, over the next 10 years. Can you maybe talk about, you know, the expansion opportunity for IMAX, where you see the biggest potential for growth? We have our addressable market is about 4,500 locations worldwide. Right now we're at about 1,800 in 91 countries. Really big opportunity. That's 40% penetrated and really and highly under-penetrated in the rest of world market, where really we're only about 30% of penetration. Our opportunity is just continue to grow that. I mean, Japan, I mentioned, that we're only about 40% penetrated. But places like Australia, we're 11% penetrated. It's just so much opportunity. India, I said less than 25%. Germany, I think it's less than 20%. France is about 30% or 40%. You know, most of them, you haven't even hit a 50% mark. You look at that opportunity. Now, local language is really the unlock there. Last year we did five new countries of local language, including Germany, which then starts to open up the conversations there. Coming up very soon, we're doing our first Brazilian title, 2DIE4, which is essentially a Fast & Furious Brazilian equivalent. We really don't have any presence in Latin America. It's highly under-penetrated. You know, I think that really is a big opportunity there. A lot of our conversations are happening in those rest-of-world regions. What's great is success continues to breed more success. As you expand in those countries, and you do more local language, then you expand further and especially as the zones and the competing exhibitors realize that the zone is going to be taken, then it kind of brings the rest of the exhibitors to the table. I mean, Australia's a great example of that. A year and a half ago we had two locations, and now we have 10. That's not by accident. That's because one of the exhibitors came to the table to have a conversation, and that made the others come to the table as well. You know, the one thing we are very mindful about are the zones. We think it's important. It's important not to create cannibalization on yourself and not to overextend and to have too many screens in one spot. You need to have the right amount to have the right consumer demand behavior, right, for your screens. I think a lot of people don't realize that. In a lot of these rest of the world markets, the average revenue per screen is actually larger. Mm-hmm .....sometimes meaningfully larger than Yep What you're seeing in North America. Well, Australia's like $4 million right now per screen for us. Yeah. Japan, I believe. Yeah ... is still- Over two million. Yeah. Those are good markets. Amazing. Great markets. With good runway. Yes. Yeah. Now, you know, for years, you know, the view was, you know, in North America, I think going back 10 years ago, it felt like North America was like 80%-85% penetrated. You're actually seeing a good amount of growth in the U.S. and Canada. What's changed that's giving you an opportunity to actually reevaluate this market and see a good runway for expansion? Yeah. Well, demographics change for sure, but consumer preferences and tastes. We actually grew domestic 4% last year. As you said, people think it's a mature market, but the reality is the demand for a premium experience like IMAX is very real. We actually signed deals with eight new exhibition partners domestically last year. That's a lot different than where we were before, right? We continue to work with AMC and Regal and Cinemark, of course. There's a lot of opportunity in the local markets, right? That's really where we're continuing to expand out. The per screen averages domestically are very strong. The Filmed for IMAX program also, and with Hollywood filmmakers, is creating that evolution as well because if you think about even Narnia. If you don't have an IMAX screen, how are you playing Narnia, right? I think the other part is the ability to, if we're taking 20% of the domestic market, it means having an IMAX screen can be impactful and beneficial to you domestically, right? It's because the film studios are leaning in and using our cameras. Like, if you see Project Hail Mary in a different format, I'm sorry, but it's just not the same. Two hours of expanded aspect ratio. That is unique and bespoke to IMAX. There's no other way to see that movie, to be immersed in space with the screen filled from top to bottom, no black bars anywhere. It's very real. Not only just, you know, in, you know, more markets, but it does seem like in a number of major metropolitan markets, particularly New York City, where I think there's only, what, four IMAX screens? Five, I think so. Five? Five, yeah. Right now? Yeah. I mean, it actually, New York City seems. I know. Underscreened. It is underscreen for IMAX, yeah. 'Cause I think we're opening the sixth. Another one's coming in soon, but with Regal, I think, right? Yeah. I think that there is definitely. I mean, Lincoln Square's always sold out. There's just never an opportunity at that theater, so I think that there is an opportunity. The second screen opportunity domestically is very real for us. That is something we're actively looking at. We do have about, I think there's about 70-80 right now that are second screens, and they are all highly productive, so I think there is an opportunity. I think Chicago is another area that we've had a lot of feedback from investors who have wanted more in Chicago as well, and Jen lives in Connecticut, so she really wants one there. We're starved in Connecticut for Okay, there you go. Yes. There you go. Actually, it's interesting, you know, when you talk about a second screen, as you think about. Mm You know, so many movies, you know, wanna be, they wanna be debut on an IMAX screen. There's actually not a lot of weekends open and, you know, you look at this year, December eighteenth, you have, you know, The Avengers going up against Dune, and Dune is a film for IMAX movie. They've got the three-week exclusive. Having a second screen could actually help as, you know, there are times in the year where having that ability to show two movies at the same time could be very good for IMAX. Oh, I fully agree. Not all year, because you think about utilization is not really something that runs at a higher rate. I do think there is a really good opportunity and the Dunes Day of it all, as they're calling it now, I think is gonna play really well. It, you know, ideally, they would have not been the same day and date. Ideally, for the entire industry. Yeah. Not about IMAX, but just for the entire industry, it would have been great for them to be separate and to create space so that moviegoers have enough, that, like, consumer income and demand that they wanna go see both, right? But they are going day and date. The opportunity for IMAX, though, is, you know, when you look back at the second Dune, that was during March. That was widely played, and we grossed 20% of the overall box office of Dune 2. Imagine Dune 3, where IMAX is likely to be the only premium screen playing Dune 3 and all the others will go to Avengers. Our indexing is gonna be huge, and so there's a really big opportunity there. It's almost like you have a Narnia 2.0 happening with Dune, right? I think that that's really gonna be a big opportunity for us too. Okay. Let's talk a little bit about your fundamentals, and you look at your adjusted EBITDA margin has expanded. You hit 41% in 2025. You were at 28% in 2022. What's been the key driver of that expansion and how high could that go? First, we hit 45% in 2025. 45. So Yes. That was a typo. That's okay. I'm gonna go with the higher number. I think we did guide to the low 40s%, and we did come out with 45%, you know, moving to the higher number, you can easily see it. The box office incrementality is very real in our model, and it's not only through to EBITDA, but through free cash conversion. I mean, closing off 2025 with 46% free cash conversion, and that's including our $30 million investment in growing our network. It can be much higher if you excluded that. I think that the opportunity before us is, as you continue to grow box office, our costs don't expand, right? We're gonna expand our network and we're gonna keep playing more films, but our costs are relatively fixed, and especially on the SG&A side as well. There's a really high incrementality flow-through that happens, and hitting $1.4 billion is going to show very clearly how you can get to the higher levels of EBITDA margin. We have guided publicly, right, to being over 50% by 2028 as well, and as well, you know, obviously free cash would follow too. When you think about, you mean, you've got a strong balance sheet. You've got. A convertible note. You just refinanced last year, so you don't have to worry about that for several years. How are you thinking about deploying your free cash flow? Yeah, I think 2025 was a great year for us to solidify our balance sheet and set ourselves up between renewing our revolver and doing the convert for the next handful of years. We have a strong runway and the ability to invest both in network growth. Because growing the network will grow the box office, which will grow the incrementality in EBITDA and free cash, but then taking the free cash, investing back in the network, and also buybacks. I mean, we have spent a substantial amount in buybacks over the past handful of years and that is always the second use and major use of our capital is to do buybacks. Great. Well, I think we are just about out of time. I thank you very much for being here and participating, yet again, at this conference. Oh, thanks for having us.