# IMAX Revenue Split Explained
IMAX operates on a business model that differs significantly from traditional movie theaters. Rather than owning and operating most of its own theaters, the company has shifted toward a more asset-light approach that focuses on technology licensing and revenue sharing arrangements.
The core of IMAX’s revenue model centers on a partnership arrangement with theater owners and exhibitors. When a film is shown on an IMAX screen, IMAX earns a percentage of the box office revenue generated from that showing. This revenue sharing arrangement forms a fundamental part of how the company generates income from its network of premium large-format cinema systems.
In recent years, IMAX has expanded beyond just collecting box office percentages. The company has developed what it calls its Content Solutions segment, which has become increasingly important to overall profitability. This segment includes premium content licensing and immersive experiences, and it operates at significantly higher profit margins than traditional box office sharing. In the third quarter of 2025, this segment generated 44.8 million dollars in revenue and achieved a 71 percent gross margin, up from 55 percent in the same period the previous year.
The way IMAX captures value has evolved into what analysts describe as a flywheel effect. More IMAX theaters attract more filmmakers to shoot content in IMAX’s proprietary formats. This increased content availability then drives higher box office revenue, which benefits both IMAX and its theater partners. The company reported that its global box office revenue rose 50 percent year-over-year, reaching 367.6 million dollars in the third quarter of 2025.
IMAX’s expansion strategy also contributes to its revenue model. The company installed 38 new systems in the third quarter of 2025 alone, and management has identified a total addressable market of approximately 4,500 systems worldwide. Since current penetration sits below 40 percent, this suggests significant room for network growth. Each new installation creates additional opportunities for recurring revenue from both content licensing and theater operations.
The revenue split arrangement works because it aligns incentives between IMAX and theater operators. Theater owners benefit from the premium experience and higher ticket prices that IMAX screens command, while IMAX benefits from a percentage of those higher revenues without bearing the capital costs of theater ownership and operation. This capital-light model has allowed IMAX to expand its network more rapidly than would be possible if the company owned its theaters outright.
Looking forward, IMAX’s revenue model is expected to benefit from an increasingly strong content slate. Major upcoming releases including Avatar: Fire and Ash, The Odyssey, and Narnia are expected to drive box office performance. The Narnia release features an exclusive structure that could serve as a template for future releases, potentially increasing IMAX’s leverage in content negotiations.
The company’s financial performance in 2025 demonstrates the effectiveness of this revenue model. IMAX reported record revenue of 106.7 million dollars in the third quarter, representing a 16.6 percent year-over-year increase. The company achieved the fastest revenue growth among its peer group in the traditional media and publishing sector.
Sources
https://portersfiveforce.com/blogs/how-it-works/imax
https://www.ainvest.com/news/imax-stock-buy-rising-valuation-strong-momentum-2512/
https://www.barchart.com/story/news/36695507/imax-imax-stock-is-up-what-you-need-to-know
