IMAX (IMAX) Q2 2023 Earnings Call Transcript

IMAX (IMAX -1.77%)
Q2 2023 Earnings Call
Jul 26, 2023, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to IMAX Corporation's second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator instructions] I would now like to hand the call over to Jennifer Horsley, head of investor relations.

Please go ahead.

Jennifer Horsley -- Senior Vice President, Investor Relations

Good afternoon, and thank you for joining us on IMAX's second quarter 2023 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. At the conclusion of this call, our historical Excel model will be posted on the website as well. I would like to remind you all 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 these 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 reconciliations to non-GAAP financial measures, are contained in this afternoon'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.

Richard Gelfond -- Chief Executive Officer

Thanks, Jennifer, and thanks, everyone, for joining us today. What a weekend and what a quarter. We're pleased to join you today on the heels of a historic few days at the global box office, a weekend where moviegoing reasserted itself as an unparalleled cultural and commercial force. And IMAX demonstrated its ever-strengthening position at the vanguard of Cinema.

The paradigm shift to IMAX has never been more apparent. IMAX obliterated expectations with a $35 million opening for Oppenheimer, delivering a staggering 20% of the film's global debut on only 740 screens. In China, we delivered more than 16% for local blockbuster, Creation of the Gods, on just 1% of total screens, our best-ever indexing for China film. And we scored 20% of the debut of Mission Impossible 7 in Japan on just 48 screens.

All this combined to lift IMAX to a $46.4 million weekend, the fourth best in the history of IMAX. There is real heat around our brand and technology in the marketplace right now, and this is evident in our strong financial results for the second quarter. IMAX drove more than 30% year-over-year growth across revenue, as well as adjusted EBITDA, net income, and earnings per share, including nearly $33 million in adjusted EBITDA and adjusted EPS of $0.26 per share. We grew signings for new and upgraded IMAX systems with 84 worldwide year to date, far more than the 47 we achieved in all of '22.

And we maintained our record-breaking share of the global box office from 2022, even as more non-IMAX and mid- and low-budget films returned to the theatrical market. As a result, we remain on track to deliver significant growth in system signings, installations, global box office, and adjusted EBITDA for the full year. What's remarkable is we delivered despite a Q2 slate that yielded mixed results at the box office. This speaks to the differentiation of IMAX and the diversification of our business across box office and network sales, as well as Hollywood and local language content.

This potent mix makes IMAX a consistent winner in a dynamic global marketplace for entertainment. Increasingly, it is clear the future of the movie business is IMAX. The shift to premium experiences in moviegoing that IMAX created is no longer just a post-COVID trend, it's the new normal, the way forward. IMAX is a strong global brand and a time when local language content is exploding as a future growth driver of the global box office.

International markets continue to offer our biggest opportunity for network growth. Finally, as studios their distribution strategies, across theatrical and streaming, our NN technology is well positioned to deliver the highest possible quality across both. Additionally, we recently took a significant strategic step with our proposal to acquire full ownership of our IMAX China subsidiary. Our expansive footprint, strong market share brand and industry relationships, and our mix of Hollywood and local language films make us very optimistic about our business in China.

Today, I'd like to provide updates on our box office and film slate with a focus on the shift to IMAX we're seeing in moviegoing. Global momentum behind our brand with a focus on network sales activity and local language. And then I'll turn it over to Natasha to take you through our financial in detail before opening it up to questions. First, as we look at our global box office, the dominant trend continues to be our market share.

Through June of this year, our share of global box office is 3.3%, and this month is on pace to be one of our best July as ever. In North America, for the first time ever, we've delivered more than 10% of the opening weekend box office for six consecutive releases of $50 million or more. The second quarter also saw IMAX continue to expand its impact in animation. We reached our No.

1 and 2 biggest animated movies of all time with the Super Mario Brothers movie and Spider-Man: Across the Spider-Verse, perhaps the best indicator of the power of IMAX was a significant attention devoted to our play times for Mission Impossible, Dead Reckoning Part 1 and Oppenheimer and the competition for our screens in the broader summer marketplace, and IMAX is delivering with both excellent films. Our debut with Oppenheimer gave us our best indexing of any major release ever, global, domestic, and international. It is the biggest IMAX debut in our long and wildly successful partnership with Christopher Nolan, and it helped turn the film into an unmistakable cultural event with IMAX selling out 4 a.m. shows and people traveling hours and sometimes flying across borders to see at an IMAX film.

Mission Impossible 7 delivered the highest-grossing IMAX debut of the franchise and has earned more than $33 million globally for IMAX to date. The back half of the year has strong title as well, including film for IMAX releases Dune 2 and Aquaman and the Lost Kingdom, Apple's Napoleon from Ridley Scott, and Killers of the Flower Moon from Martin Scorsese, both scheduled for exclusive theatrical release. While there is some concern about release dates shifting due to the labor strikes, we believe nearly all our second-half slate has wrapped shooting. Additionally, given our surging indexing, we believe studios will be reluctant to move films on a slate and potentially sacrifice a already agreed-to IMAX window.

Furthermore, our diversified programming strategy will help offset the impact of a shifting Hollywood slate. Local language films will continue to bolster our slate in the second half. We now expect to program more than 40 local language films worldwide in '23, up from the 30 to 40 we initially projected. We've had several solid wins in local language in recent months.

IMAX delivered more than $10 million with the Chinese blockbuster Lost in the Stars, a mystery thriller, we opportunistically added to our slate within a matter of days in the quarter. As I mentioned earlier, we delivered $8.6 million this weekend with Creation of the Gods 1: Kingdom of Storms, 16.6% indexing, and our biggest summer debut ever for a Chinese film. And in Japan, IMAX was granted its first-ever day-and-date release for the Studio Ghibli film, How Do You Live?, the final film from the legendary Japanese director, Hayao Miyazaki. How Do You Live? delivered one of the biggest IMAX opening weekends of Japan of all time, with IMAX earnings 16% of the film's debut box office on just 44 screens.

To date, IMAX has delivered more than $2.8 million with the film. We expect it will have a long run in Japan and select markets worldwide throughout the rest of the year. Our performance across a unique mix of local-language blockbusters continues to be a catalyst for network growth, and we see potential for Oppenheimer to drive further growth as we've seen with films like Avatar 2, where we vastly outperformed. As I said earlier, we now have 84 signings this year compared to 47 for all of last year.

We're seeing exhibitors bring more IMAX to their existing multiplexes globally to drive growth rather than adding more conventional screens, such as multinational exhibitor Kinopolis, which, in May, signed a deal to double its IMAX footprint. We also more than doubled installations in Q2 over Q1 of '23 with 20 in the period. And that number reflects our continued focus on high-growth markets beyond North America and China. Year to date, we've grown our rest of the world footprint by nearly 6%.

While there continues to be discussion about China and the economy, we remain bullish. Like many of the world's most successful multinational category leaders, we built a robust business in China over decades, yielding hundreds of millions of dollars in revenue. This year, IMAX box office in China through mid-July is up more than 150% year over year versus exhibition, which is up almost 60%. Our market share in the first half has been remarkably strong, 4.6% of the overall box office on less than 1% of the screens.

We program a healthy mix of local, Hollywood, and international content, particularly Japanese anime. And while Hollywood blockbusters have shown softness in China, our average opening weekend indexing for Hollywood releases has soared to 15% in China, again, on 1% of the screens, up from 10.7% in 2019. As China emerges further from COVID and moviegoing recovers, we believe there is upside for Hollywood and local films in the market. As we expand across the world, we are expanding across platforms.

In the second quarter, we announced an agreement to sell worldwide rights to our forthcoming documentary, The Blue Angels, to Amazon Studios, a first-of-its-kind deal that will see the film go to Prime Video following an exclusive run in the IMAX network. We continue to refine our go-to-market strategy with SSIMWAVE, and we're seeing a positive response with streamers encouraged by our efforts to champion quality in that space. We remain focused on solutions for streamers that allow them to compress video images while preserving optimal quality and creating significant cost savings. In conclusion, we believe our performance and broader market trends demonstrate a paradigm shift in cinema, with IMAX getting increasing market share.

And that, for our remarkable indexing, is clear evidence of a structural change in moviegoing. With increasing numbers of consumers on a global basis seek out IMAX, the future of the movie business is IMAX, and it's a bright future. We created and continue to lead the shift to premium moviegoing that is most in demand among audiences, filmmakers, and studios. We are the only global premium theatrical platform with unparalleled scale at a time when global markets and local content are the most promising drivers of future growth.

Finally, our strong brand and technology enable us to expand and create value across the ecosystem and capitalize on the interconnectivity between theatrical and in-home entertainment. We are confident in our ability to build on our momentum to deliver a strong second half to '23 and drive further global growth across the IMAX network. Thank you. And with that, I'll turn it over to Natasha.

Natasha Fernandes -- Chief Financial Officer

Thanks, Rich, and good afternoon, everyone. As Rich shared, Q2 was an excellent quarter, which showcased the diversity and strength of our technology-centered business model. Our signings momentum continues, and installations are ramping while box office grew through a diverse mix of content and without the benefit of any mega hits like Top Gun in the prior-year quarter. In summary, our results included IMAX box office of $268 million, revenue growth of 32% over the prior year, adjusted EPS of $0.26, up from $0.07 in the prior-year period, and adjusted EBITDA attributable of $33 million or 35% of attributable revenue.

As I noted last quarter, we are seeing this winning portfolio of Hollywood and local language content create for us lower volatility from Hollywood releases as we optimize the programming of the IMAX network to maximize box office. This, in turn, is driving greater demand by exhibition customers for IMAX systems creating a positive growth dynamic. And as Rich highlighted, Q3 is off to an incredible box office start with our biggest July opening weekend ever, global and domestic, led by Oppenheimer, as well as local language titles, Lost in the Stars, Creation of the Gods Part 1, and How Do You Live?, putting us on track to achieve our highest-ever July box office. Now, for a closer look at the second quarter.

IMAX box office of 268 was up 8% year over year and roughly in line with Q1 box office with very positive profit flow-through given the mix of titles. This included hit animated titles not historically the mainstay of IMAX such as Super Mario and Spider-Man Across the Spider-Verse, coupled with good contribution from blockbusters like Guardians of the Galaxy and Fast 10. Add to that a China box office that was fueled by a mix of local language and Hollywood titles. The performance in Greater China led to IMAX box office market share in Q2, up 5.2% on 1% of the screens, driven in part by an average indexing of 15% on Hollywood releases.

Total revenue in Q2 was $98 million, up 32% from $74 million in Q2 2022. At a 59% gross margin, we recognized gross profit of $58 million, which equates to growth of 31% year over year. This higher level of revenue and gross profit year over year was driven by improvement in both segments. Content Solutions revenue of $31 million comprised 32% of total revenue and grew 6% year over year, driven by IMAX box office growth.

Gross profit of $20 million or 64% of revenue grew 15% year over year, driven by the positive profit flow-through from stronger box office performance, along with lower film marketing expense given the mix of titles and recovery of China. Technology Products and Services revenue of $64 million comprised 65% of total revenue and grew 49% year over year. For this segment, gross profit of $36 million grew 42% year over year. This very strong result was driven by a higher level of IMAX system installations under sales or hybrid arrangements, as well as system renewals and amendments.

In total, we had 20 installations in the quarter, 13 were sale or hybrid, and seven which were joint revenue-sharing leases. Of the installations, 14 were in international markets, reflecting the strong momentum we are seeing in those geographies. Signings momentum also continues with 46 coming in Q2 and which is more than three times the 13 signings in Q2 of 2022. The rest of world strength is evident in the 84 signings we've had so far this year.

Sixty-eight of signings over 80% were new systems compared to 30 for all of 2022. 26 were with exhibition partners who are new to IMAX in the past year. 25% were in U.S. and Canada and 13% in Europe.

Nearly half were in Japan and Southeast Asia, including the seven Aon signings from January, which are all installed and off to a strong start. Three signings were in China, all of which signed in the last month, and the vast majority were in high PSA countries. Turning to operating expenses. We are investing for long-term growth and to exploit our differentiation and strong brand.

R&D expense of $2.8 million increased $1.4 million, reflecting our investments in new technology, including streaming optimization software for SSIMWAVE. SG&A excluding stock-based compensation of $32 million increased $2.6 million from Q2 2022, driven by the inclusion of SSIMWAVE expenses, which were not in the prior year given the acquisition closed at the end of Q3 2022. As a percentage of revenue, SG&A, excluding stock-based compensation was 33% versus 40% in Q2 '22, an improvement of approximately 700 basis points, reflecting the strong operating leverage in our business model, coupled with continued cost discipline efforts. Adjusted EBITDA attributable to IMAX was $32.8 million, a growth of 29% over prior year of $25.4 million.

The growth across our segments highlighted earlier and the strong incrementality and operating leverage in our business model drove this excellent result. From a margin perspective, adjusted EBITDA attributable to IMAX was in the mid-30s at 35.4%. And the strong performance flowed directly to the bottom line with adjusted EPS in Q2 of $0.26, which compares to $0.07 in the prior-year period. As we turn to our balance sheet and cash flows, operating cash flow through six months was $25.9 million, representing significant growth of $31 million from the use of cash of $5.3 million in the first half of 2022.

This improvement reflects our higher profits year over year and the accelerating business recovery of our exhibition customers post-COVID, including year-to-date collections of $43 million in China. For context, on a consolidated basis, operating cash flow for the entire year of 2022 was $17 million. Our capital position remained strong as we ended the quarter with $95 million in cash and $262 million of debt, excluding deferred financing costs. Of the $262 million of debt, $230 million reflects our convertible senior notes due in 2026 that bear an interest rate of 0.5% per annum with a capped call taking us to $37 per share.

As of June 30, our available liquidity was $420 million, including cash and cash equivalents of $95 million and $325 million in available borrowing capacity under the company's various revolving facilities. Furthermore, during the quarter, our board approved a three-year extension to our share repurchase program through June 2026. As of the end of Q2, there was $191 million remaining available under our share repurchase authorization. Our strong liquidity position gives us ample resources to fund the $124 million to acquire full ownership of IMAX China as announced on July 12.

To conclude, our results through the second quarter displayed the strength of our business coming from the combination of our unique position in the entertainment industry and our high-margin asset-light technology-focused business model. And we continue to believe that the opportunities in front of us are even more significant when considering three factors. First, as Oppenheimer results underscore, there is strong demand specifically for IMAX as the most premium entertainment technology company with unmatched global scale. Second, the success we are having in programming a diverse array of content across our platform, which is supercharging our signings momentum in installations.

And third, the emerging potential of our SSIMWAVE streaming technology backed by our strong brand. We look forward to reporting on our progress on all these fronts going forward. With that, I will turn the call over to the operator for Q&A.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Eric Handler of ROTH MKM.

Eric Handler -- ROTH MKM -- Analyst

Good afternoon. Thanks for the question. Rich, I wonder if you could talk a little bit about your Chinese local language market share. I mean, correct me if I'm wrong.

Pre pandemic, I remember a good movie would do like a local language movie China would do like 3% to 5%, maybe 6%. But you seem to be consistently getting better from that and obviously, 16% from Creation of God's way above average. Is there anything that you can point to in China? Are they just getting used to seeing their own biggest films in the IMAX format? Is there any marketing going on? Anything you could point to there?

Richard Gelfond -- Chief Executive Officer

So, Eric, I think about around the time of pre-pandemic a few years before that we made a strategic shift to doing local language films and IMAX. And I think before that, audiences with conditions and seeing Hollywood films in IMAX, but they weren't conditioned to seeing Chinese language films in IMAX. And I think once we started that, people got used to it. So, IMAX wasn't a place that was associated with Hollywood films.

It was a place associated with films of all types. And you're right, I don't have the data in front of me. But my memory and, just to be clear, I could be all fit. But I think what used to do like 2.5%, 3% of the market on Chinese local language films.

And most recently, it's been more in the 5% to 6% range. And that's part of a global trend. I mean, one of the points we're trying to make on the call is there's been this paradigm shift, where IMAX was kind of ancillary to the movie. But I think what you're seeing now is IMAX is the future of cinema or like primary of the movie.

And I think what it reflects is during the pandemic, people kind of got tired of sitting on their couches and especially in China, where it's smaller apartments and less room. And I think they've decided when they go out, they want something really special to go out to. And as you said, the market share for this weekend film was kind of unprecedented. And in my introductory remarks, I talked about Japan and even the anime in Japan, which is homegrown, and IMAX is really outgrowing.

So, I think it's all part of this bigger model where people are seeking out IMAX as a separate thing. And instead of just saying, "Oh, Oppenheimer, let's go see it at IMAX." They're saying, "Let's look at what's in the IMAX, and let's go see that." And that's been our long-range plan for a while.

Eric Handler -- ROTH MKM -- Analyst

Great. And then just to follow up, last year, you did very well with local India content. And it looks like you've been getting some really good momentum in that market. Haven't heard as much this year.

I have no clue what big blockbusters they have on their site or how those are spaced out. But anything you could say about the Indian market?

Richard Gelfond -- Chief Executive Officer

Yeah, I can -- first of all, I should say that Oppenheimer was the biggest opening in the history of India. So, I mean, I'm just talking about the business in general. In terms of local language, we do have some that we're going to show in the second half of the year. Overall, I think we have 20 to 30 international films in the second of the year.

But this is even a very major one, Eric, which, I'm embarrassed to say, I don't remember the title of it, we could fish it out before this call ends. I'll come back to it. But there are several Indian ones. As you know, strategically, we want to do more of them.

Eric Handler -- ROTH MKM -- Analyst

Thank you very much.

Operator

Thank you. Our next question comes from the line of Steven Frankel of Rosenblatt Securities.

Steven Frankel -- Rosenblatt Securities -- Analyst

Good afternoon, Rich. Thank you for letting me ask a question. Can you talk a little bit about alternative content, given the potential risk of a protracted strike? What have you thought about the types of events you could do with IMAX Live and alternative content that could really have some traction?

Richard Gelfond -- Chief Executive Officer

So, we spent a lot of time, obviously, Steve, assessing how long the strike is going to last. What kind of content could we play, what's out there? And pretty much for the rest of the year, no matter what happens, the content is finished or about to be finished. So, none of this is really likely to be a 2023 issue. In terms of 2024, if the strike lasts a long time, it likely wouldn't affect a lot of content in the first half of '24.

It would more likely affect content in the second half of '24. And we have, as your question addresses. So, we're looking at what local language films, we could lock in early, particularly one light anime or Indian films that would be exportable to other places. We're looking at things like bringing back.

So, obviously, not only Oppenheimer is going to be a great bring-back after it runs, but Mission Impossible's run was truncated. I think that's something we can bring back and do very well on documentaries. As I mentioned in my prepared remarks, we have one coming out this October. And another one which we sold to Amazon is coming out in '24.

And Blue Angels, I'm really excited about. It's very much like an action kind of documentary. As you mentioned in your question, you live and different events. And we've greenlit a number of events, and we're looking forward to putting that together.

But to be clear, the strike is not likely to have a short-term impact. And it's only if it goes on a long time that it has an impact. And we'll do our best in the ways that I enumerate to you to make sure that we have as much content as possible. But I think a strike will last a long time.

There are going to be content shortfalls, but I don't believe that's a most likely event.

Steven Frankel -- Rosenblatt Securities -- Analyst

Great. Thank you.

Operator

Thank you. Our next question comes from the line of Omar Mejias of Wells Fargo.

Omar Mejias -- Wells Fargo Securities -- Analyst

Good afternoon, guys. Thank you for taking my questions. Maybe first on signings. Let's talk about -- so you guys only have 19 screens domestically and 30 worldwide capable of playing 70-millimeter films.

With the recent success of Oppenheimer, could this plug new wave of demand for IMAX or upgrades to North America and globally? Just wanted to get your thoughts on -- what are you hearing from exhibitors and studios on this type of format? And just overall, in general, could this be sort of like an Avatar effect, the Oppenheimer effect? And how are you guys thinking about the potential impact of it? Thanks.

Richard Gelfond -- Chief Executive Officer

Yeah. So, Omar, we are analyzing that data. I'm looking at it. As you probably remember, we've already said that we're going to build several more film cameras.

So, that way, filmmakers will have the ability to do it. The projectors are all dated. It's not like a new generation, but we are exploring are there more of them that we could possibly refurbish and bring into service. Remember, it's hard to believe, given all the publicity around Oppenheimer, that it's only been there for four or five days.

But we are thinking of other opportunities and building new 70-millimeter projectors. Are there opportunities in branding, other 70-millimeter projects with IMAX? Certainly, we'll have an outreach to filmmakers because the numbers are so spectacular about them shooting with 70-millimeter film. So, we're aggressively examining the possibility of how we can lever off this kind of amazing cultural event. And I think you will see us find different ways to do it going forward.

Omar Mejias -- Wells Fargo Securities -- Analyst

That's very helpful. And maybe I think you alluded to this on your prepared remarks, but there were recent media reports talking about that Warner Brothers was strongly considered moving the release day for Dune. I just wanted to get your thoughts on what is your confidence that that won't be the case. Or just your thoughts in general, what's the likelihood of this happening? And if so, what other options are you considering for the replacement for the Dune slot and just in general on the back half of the year?

Richard Gelfond -- Chief Executive Officer

Right. Dune, specifically, I mean, there's another great movie coming out around in time, which is the marvel from Marvel, and we can't play it because we are committed to Dune. So, Dune moves will just go over to the marvels, and having a Marvel movie as a backup is not the worst position to be in the world. But in terms of doom, my own opinion is that it's highly unlikely to move, and it's an educated opinion, meaning I spent a lot of time on the facts.

So, Dune is already in the midst of a marketing campaign. There are trailers out. There's lots of materials out. They had a big presentation, a lot of the conferences.

As a matter of fact, the Denis Villeneuve presented at the IMAX CEO Forum. So, it's kind of out of the gate. So, if you put it back in the game, you've got to duplicate those expenses at some time in the future of putting it out of the gate. In addition, Dune has a very long run time in IMAX, up to five or six weeks.

And it just was fortuitous that there were no other conflicting projects. But if they were to move that to next year and some time, it's highly unlikely that they would have that amount of run time. And just to remind you, IMAX was about 20% of the growth on Dune 1. And I know there's a lot of marketing plan on Dune 2.

If they move Dune 2, there's a carrying cost, call it 10% or whatever it is. So, how are they going to make up for that cost across the other incremental costs? The IMAX release is a really important element to their release pattern. And as I said just a minute ago, I don't think it's replicable for them to have that kind of run time again. So, when I look at it from their point of view, from a dollars and cents numbers perspective, it just doesn't make any sense to me that they would move it because -- and again, the only reason they would move it is they'd say, the actors strike is going on, and they want to get a premier and put it on the Tonight Show or whatever they put the actors, but with no disrespect to Timothee Chalamet.

Are you going to be able to make up for losing the six-week IMAX release? Are you going to be made up the cost of capital and carrying it for a year? Are you going to move it to an uncertain year when you have no idea what's going to be put against you when they have virtually no competition right now in the marketplace? It doesn't really make any sense. When you look at the other movies, I think that's one of the most compelling not to move. But you could go through all of them and the same logic kind of applies. I think I've talked to the distributor that Warner Brothers, they don't know where that article can go in the press.

And I don't -- they've certainly told me that that article is not true. So, all I can do is give you my logical perspective on it, but I feel quite strongly that it's not going to move.

Omar Mejias -- Wells Fargo Securities -- Analyst

I appreciate that. Thanks.

Richard Gelfond -- Chief Executive Officer

Operator, before I go on, I have a major Indian title in Q3, to the last question, Jawan. And one reason we have fewer Indian titles in Q1 and Q2 was because the Hollywood schedule. There wasn't really room to play them. And big Japanese titles in Q4 are Godzilla Minus One, The Spy X Family, and The Boy and the Heron, which is the film which will play for a very long period of time.

You can go back to the next question.

Operator

Thank you. Our next question comes from the line of Michael Hickey of the Benchmark Company.

Michael Hickey -- The Benchmark Company -- Analyst

Rich, Natasha, Jennifer, congratulations, guys, on a great quarter. Thanks for taking my questions. Rich, obviously, phenomenal success here with Oppenheimer. I love it that the IMAX brand has never been so hot.

And I think that obviously gives you a lot of leverage to build the business and we've been running it now almost early years. So, you have an incredible perspective. I'm just curious how you think about sort of the next three to five years here. Obviously, we've always got near-term turbulence, labor strikes.

Some films are great, some films are not, some of the agents are great, some reasons or not. But just curious how you think sort of medium to longer term, how excited you are today and the growth of your business, given your perspective? And I guess how material maybe some of these new avenues of revenue like SSIMWAVE can be for you guys?

Richard Gelfond -- Chief Executive Officer

Well, I would say this week, I've never found IMAX a happier place. And it's not just because Oppenheimer did so well in the Hollywood headlines. But Oppenheimer, you kind of got to get into the math. So, I'm not going to tell you what our ultimate was for the movie, meaning what our projection was.

But I will tell you that where that movie ends up is very far in excess of where our projections were coming into it. So, not only is it the positioning of what it means for our brand and doing like one-third of the box office in the United States. One-fifth it in the world on 8/10 on 1% of the screens. I mean, just looming on those numbers for a second.

The strategic side, what it could do to signings, and kind of the Avatar effect again. But what it means for our financial position? For the third quarter where we just had our best July -- well, July is not over. We've already had our best July and the film theaters are sold out pretty much everywhere for the next three weeks and our presales are fantastic. So, at every level.

In the short run, I'll say, it's been hard to feel better about IMAX than I feel right now. When you go out and you look at our five-year plan, it shows very favorable growth patterns. And it's driven by our increased market share, which in North America is up like 50% for where it was pre pandemic. And as you know, we've guided to pre-pandemic levels.

And then you look at the growing network, we have 85-ish signings this year already. At 80% of the new science are new theaters, which means they're not upgrades, they're places where we're going to get royalties, not only from the exhibitors but for the studios as well. So, model out that growth paradigm. And then you had business like SSIMWAVE and ENHANCE and live, and we're tremendously optimistic about them, particularly SSIMWAVE, where we think we're really on to a product that streamers on the mode of saving costs and save costs on a very advantageous basis.

So, our five-year plan is very optimistic. And as I said, without overstating the point, hard to bid at IMAX at a more optimistic time than right now.

Michael Hickey -- The Benchmark Company -- Analyst

Rich, can you get more -- I know when you look at sort of your penetration globally, there's big buckets of opportunity. And I know you've Rest of the World has been significant for you guys, what's happening in Japan and India. China has also been a significant market of growth. But curious just on the domestic, how you look at the opportunity? I know you signed a deal in Canada if that was incremental.

But it seems like, certainly, certain urban areas that you could have more screens. I know there's some zoning restrictions and so forth. I'm just curious if there's any flexibility there I think in the future, so you can get more screens with the same operator in the specific zone. And if you think now that IMAX is hot, I mean, does it make any sense at all, in highly populated areas to have two suites for complex? Thanks, guys.

Richard Gelfond -- Chief Executive Officer

So, I'll start by saying we're pretty ambivalent about whether it's the U.S. or overseas. The theaters generally do the same, except if it's in Japan, where our PSAs per screen averages are double North America. And just as an anecdote, I mentioned it briefly on the call, but I'll dig a little deeper.

We signed a seven-theater deal with Aon early this year. All seven are open, and all seven are on track to do between $1 million and $2 million PSA a year, which is the U.S. PSA is 900,000. So, I mean, there's enormous leverage in global growth.

That's why I don't necessarily say, "Oh, what am I you going to do in North America because it's worth twice as much to me by do it in Japan." But in North America, we still were much more penetrated than other places in the world. But we still could do a lot more. I'm trying to remember. Someone in the room will tell me, but I think something like 25% approximately of our signings are in North America over this year.

So, I think we did a five-theater deal within a company called EVO, and they could do a lot more -- was it eight-theater deals for EVO? And they could do a lot more. I don't want to get ahead of myself or promise this, but we're starting to look at areas of exclusivity where we could even So if AMC owns a particular market, we can't put additional theaters in that market because it's analogous to like a franchise kind of thing. But we're starting to think about could we put additional theaters in exclusivity zones to drive North American box office even higher, and we are in some early conversations about things like that.

Michael Hickey -- The Benchmark Company -- Analyst

Thank you, Rich. Natasha, a quick one for you. I realize -- I don't know if you touched on the guidance. I'm sorry if you did.

I'm guessing you don't want to change a global box office estimate given how much stress we have on potential shifts in late given the strikes. But curious on installations. It looks like you're tracking really well there. I just -- can you update your -- are you reiterating your guidance? Are you sort of in the high end? Do you think there's any sort of thing, color-wise, you could add? That would have to be great.

Thanks.

Natasha Fernandes -- Chief Financial Officer

Yeah. I think we feel really good about our guidance. We haven't -- obviously haven't come out and changed it. We feel that we're at $541 million of boxes.

We're halfway there to the level that we guided to. And with respect to installations, it's been exactly as we talked about on our call a few quarters ago, where we think it will be back-end loaded, very similar to our historic years. And we had a really good quarter with 20 installations, and we're getting there. We had a great quarter from the Tech Products and Services segment as well with really strong margins and performance there.

And I just think our guidance is exactly where it looks to me. Same with EBITDA as well. We closed out the quarter at 35% attributable EBITDA margin, too. And so, we're just -- we're tracking exactly what we guided since the beginning of the year.

Michael Hickey -- The Benchmark Company -- Analyst

Nice. Thanks, guys. Good luck.

Operator

Thank you. Our next question comes from the line of Chad Beynon of Macquarie.

Chad Beynon -- Macquarie Group -- Analyst

Hi. Good afternoon. Thanks for taking my question. Rich, I know in the past, we were always focused on kind of the ramping period for new installations.

And when you mentioned some of these PSAs close to $1 million that kind of jogged my memory. So, with the increased local language product and just the strength overall, has there been any change in terms of the ramp period? And I guess what I'm getting at, I'm assuming maybe some of these locations are ramping a little faster. Obviously, every region is different. But I just wondered if you could opine on that.

Thanks.

Richard Gelfond -- Chief Executive Officer

Yes. So, as I said, in Japan, we signed a seven-theater deal on within six months opened all seven. I don't ever remember seeing that before. We used to say that it was two to three years to work through our backlog, I would say we haven't done that calculation, so I don't know.

But I would say of our signings this year, the number that are turning into installs this year feels to me a little higher than it's been in the past. But I can't give you a thoughtful empirical.

Chad Beynon -- Macquarie Group -- Analyst

OK. Great. And then on IMAX Enhanced, I guess, for four or five months out from holiday shopping season, should we expect to see more home consumer products kind of out there in the stores? I know you've kind of hinted at some of this with some bigger companies working with you guys. I know it's not a huge initiative, but certainly, that would be something that would continue to help the brand and help the P&L.

Thanks.

Richard Gelfond -- Chief Executive Officer

There are active discussions going on, but the results are binary. You either sign them or you don't. So, I can't predict until it's signed whether we're going to sign or not, but there are some interesting discussions going on. And if we sign them, I'm hopeful there'll be additional ones that you can't predict.

Chad Beynon -- Macquarie Group -- Analyst

Great. Thank you very much. Nice quarter.

Operator

Thank you. Our next question comes from the line of James Goss of Barrington Research.

James Goss -- Barrington Research -- Analyst

All right. Thank you. Earlier on, as you rolled out China, Rich, there was a big difference in the PSAs as you moved into the "smaller markets," which are still relatively large. I'm wondering if that variance has continued as you've gotten people more used to seeing local language product in IMAX if that gap has narrowed somewhat?

Richard Gelfond -- Chief Executive Officer

You know, Jim, it's still a recovery here in China. Because remember, I know it seems like a long time ago, but in December, they still had quarantines and shutdowns. So, I think it's really too early to detect a trend. It's just coming back to a normal state, not even there yet.

So, I think it's too early to tell.

James Goss -- Barrington Research -- Analyst

OK. Another thing is -- I'm wondering if there's anything contractual in your film release windows, either in your favor or the other favor, or is it just a point of honor. With Dune, for example, if you have a five- or six-week window, and you do have Marvel as an opportunity. Does that give you some ability to consider negotiating with sharing that window?

Richard Gelfond -- Chief Executive Officer

Yeah. I mean, of course, typically, we committed on not going to go into the specifics, but to a two-week window in the film for IMAX program. So, we could play the minimum or we could offer more time. So, if your question is do we have flexibility, we do.

So, they want to move the movie, there would be consequences to them of doing it. As I said, they would lose all the window. So, in my mind, it will very hard to replicate that in future years.

James Goss -- Barrington Research -- Analyst

But you would have the same flexibility. So, can you force the issue as well? Does that work that way? Or is it a matter of creating this honor system so that you do spread things out over the course of the year?

Richard Gelfond -- Chief Executive Officer

Jim, as you probably read in the media with Top Gun with -- not Top Gun, with Mission Impossible 7 and with Oppenheimer, we make commitments. And when we commit to somebody, we stick with it. And I would say, thanks to the quality of Oppenheimer, its brand association with IMAX. And by the way, I love Mission.

I thought it's a great movie, being a company of principal and standing by our commitments pays off for us. So, we don't really play games like that.

James Goss -- Barrington Research -- Analyst

OK. Understood. Lastly, you've touched a little bit on the rollout in terms of number of sites. And I wonder if given how you do feel IMAX rate now, if there's any consideration toward in general, accelerating that rollout in terms of numbers, so it maintains some same sort of percentage? I know it's not itemized in terms of certain dollars or sites or percents.

But do you think an acceleration is warranted given the number of markets you have and the reception to your format?

Natasha Fernandes -- Chief Financial Officer

Jim, this is Natasha. You know, we have our guidance out there for 110 to 130 for the year. Of course, there will be ebbs and flows of the timing of the rollout. But that's that depends on many factors.

It depends on timing of our exhibition customers and whether their cash flow exists at the time to do a rollout, the timing of other types of factors as well. And of course, if we have the opportunity to roll to install theaters sooner, we will. But right now and based on our cadence of historical year, we'll continue to reiterate that it will be Q4 loaded.

James Goss -- Barrington Research -- Analyst

All right. Thank you.

Richard Gelfond -- Chief Executive Officer

This may sound obnoxious, and I don't want me this way, but I want to put it in a perspective. You know, people should take out of and look at the Oppenheimer numbers and look at the predictions and whether buy more installs or less or 10 is going to really make a difference in IMAX's a year. I just think when you look at the big picture, pun intended with IMAX, the signings, the installs, I mean, the way that we're firing on all cylinders I think looking at this year from where we sit now, when there's a few more installs, I don't think is part of an important investment theses around IMAX.

James Goss -- Barrington Research -- Analyst

OK. No, I meant, actually, not just this year, but in a broader sense as well.

Richard Gelfond -- Chief Executive Officer

Well, in the future, Jim, if you're asking about future years, I think there was an Avatar effect. You see it this year. I think it's still continuing. And I think when you look at the -- we didn't really break this out, but some individual IMAX theaters can do $1 million in Oppenheimer.

Many of them have been to $200,000, $300,000. So, if you model from the theater side, what it means to them and their -- if they're logical, it should lead to what you're asking about.

James Goss -- Barrington Research -- Analyst

All right. Well, thanks a lot.

Operator

Thank you. Our final question comes from the line of David Karnovsky of JPMorgan.

David Karnovsky -- JPMorgan Chase and Company -- Analyst

Hey, thanks. Rich, I thought it was interesting to see Napoleon on the calendar for IMAX. Maybe I don't know if you can give any background to this. I think it's your first content deal with Apple, and what potential do you kind of see for more releases here? Have they given you any indication of their slate?

Richard Gelfond -- Chief Executive Officer

Well, not only on Flower, it's a core movie, but the Napoleon, which is really Scott, it's also another Apple movie, which is interesting, David, because there are two different studios to distributing them. One is Paramount and the other Sony. Yes, we are discussing other projects with Apple and Apple is committed to a theatrical exclusive window. And I think they see us part of -- on this one specific one in mind that we haven't agreed to, but we have a verbal understanding the next couple of years, it's not in the near term.

So, I do think we'll get more and more content from Apple and probably Amazon as well because they're committed to a theatrical window.

David Karnovsky -- JPMorgan Chase and Company -- Analyst

Thank you.

Richard Gelfond -- Chief Executive Officer

Thank you, David.

Operator

I would now like to turn the conference back to Richard Gelfond for closing remarks.

Richard Gelfond -- Chief Executive Officer

Thanks so much, operator, and thank you all for joining us today. So, we just announced on this call a very attractive successful second quarter, which followed a very successful, attractive first quarter. And now here in the first month of our third quarter, and we just had our best July ever in terms of box office as we look into August at the presales and the potential for Oppenheimer. And then we look at the other movies coming on down the slide.

I think IMAX has moved in a way from people considering a story stock to elements of being a value stock. And I think people should probably, as I said before, take out a pen and put numbers to some of these things and look at we've been shrinking our capitalization. Our shares outstanding have gone down. Our EBITDA has gone up.

And people -- I don't think it has to be believing the story is a mention taking out pen and doing some math. And I really don't remember being in a more attractive position at IMAX in a very long time. So, thank you all for joining us. And I hope to update you with more good news on the next call.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Jennifer Horsley -- Senior Vice President, Investor Relations

Richard Gelfond -- Chief Executive Officer

Natasha Fernandes -- Chief Financial Officer

Eric Handler -- ROTH MKM -- Analyst

Steven Frankel -- Rosenblatt Securities -- Analyst

Omar Mejias -- Wells Fargo Securities -- Analyst

Michael Hickey -- The Benchmark Company -- Analyst

Chad Beynon -- Macquarie Group -- Analyst

James Goss -- Barrington Research -- Analyst

David Karnovsky -- JPMorgan Chase and Company -- Analyst

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