Key Points
IMAX's revenue and adjusted earnings per share rose 35% and 115% in Q4.
For the full year, the company's gross box office figures grew 40% and system installations continued to accelerate.
IMAX recently announced it would begin testing out live events, starting with the Formula One at 50 locations in the U.S.
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Shares of leading-edge entertainment technology provider IMAX (NYSE: IMAX) are up 16% as of 2 p.m. ET on Thursday after the movie theater enhancer reported fourth-quarter earnings. Revenue and adjusted earnings per share (EPS) rose 35% and 115% in Q4, smashing Wall Street's expectations. For the full year, sales grew 16% and cash from operating activities spiked 79%, as IMAX delivered an array of record-setting figures. IMAX's gross box office rose 40% in 2025 to $1.28 billion, and management is guiding to reach $1.4 billion in 2026, despite the incredible results it will have to lap.
IMAX stock has tripled over the last two years, and powerful results like Q4 point toward the company continuing to break out, even though the broader movie theater industry isn't exactly firing on all cylinders. With 76% of moviegoers stating they're more likely to see a movie if it gets released on IMAX, the company's top-tier experience remains a major differentiator -- and cinemas and studios are eager to keep using IMAX's solutions. The company has 1,796 systems deployed across its global IMAX network, but has a backlog of 403 systems and plans to install between 160 and 175 systems in 2026.
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Over the long haul, management believes revenue will rise by high single digits to low double digits annually, while profitability and cash generation improve. On top of this solid growth projection, IMAX recently announced it would begin testing live events, showing five Formula One races in 50 locations across the U.S. This could be an interesting way for theaters to improve "non-peak" times, especially if IMAX continues to expand its live event offerings, whether to different sports or concerts. Ultimately, there is a lot to like about IMAX's stock right now. That said, the stock currently trades at 25 times free cash flow, so it isn't the deeply discounted stock it once was, as it rebounded from the pandemic. If you, like me, believe there will always be certain movies worth seeing on IMAX's leading technology, then the growth stock may still be worth a look.
Should you buy stock in IMAX right now?
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
