Theatergoers want the best experience they can get, and IMAX (NYSE:IMAX) has long argued that its huge screens give it a competitive advantage that no other theater operator can match. When blockbusters like Avengers: Infinity War hit the box office, IMAX typically sees an opportunity to cash in on its superior experience.

Coming into Tuesday's first-quarter financial report, IMAX investors hoped to see continued growth from the theater operator. IMAX's numbers were better than most had expected, and the company expressed its belief that blockbusters like the latest Avengers installment would produce good results in the current quarter and beyond.

Upper corner of IMAX theater building against a blue sky with a few clouds.

Image source: IMAX.

How IMAX was a superhero

IMAX's first-quarter results showed strong growth. Revenue jumped 24% to $85 million, topping the consensus forecast for $81 million among those following the stock. Net income came in at $8.5 million, up from just over break-even in last year's quarter, and after accounting for some extraordinary items, adjusted earnings of $0.21 were almost double what most investors had expected.

Good news from the box office helped deliver winning performance from IMAX. Globally, gross box office climbed 16% to $246.9 million, thanks in large part to a bigger slate of feature films. IMAX showed 22 different films during the period -- 14 new and 8 carryovers from the fourth quarter of 2017 -- compared to just 18 films in the year-ago period.

IMAX's network also continued to expand, albeit at a slower pace than we've seen in past quarters. The company installed 16 theater systems, bringing the size of its network to 1,382. Customers signed contracts for 45 new theaters in eight different countries during the first quarter, and IMAX reported a backlog of 529 theaters as of the end of March.

In general, IMAX's theater business outperformed its network unit. Theater business revenue jumped by more than half during the quarter, with seven new theaters attributed to the segment. Gross margin soared, primarily due to improved margin figures for new systems and the lack of any upgraded systems during the quarter. The network business saw revenue rise 14% to $44.9 million, but higher marketing costs weighed on IMAX's margin results. Growth in sales from revenue-sharing arrangements was largely in line with the rest of the segment.

What's next for IMAX?

CEO Richard Gelfond explained the quarter. "Our first-quarter results were strong from both a financial and strategic standpoint," Gelfond said, "[as] we modified our programming strategy, demonstrated operating leverage, and set the table for the successful launch of IMAX With Laser." The CEO also pointed to the greater emphasis among moviemakers to create blockbuster releases that fit best with the IMAX experience.

Along those lines, IMAX noted that Avengers: Infinity War has already started paying off for the company. The film, which is the first commercial release shot entirely with IMAX cameras, produced record IMAX box office receipts of $41.5 million in its first weekend.

IMAX believes that its IMAX With Laser technology will be instrumental in taking full advantage of future blockbusters. The systems are intended to produce the best digital images ever, introducing new levels of clarity, sharpness, and brightness along with new advances in audio technology. With 150 signings for IMAX With Laser installations, the theater operator has had a good reception from its client base for the new technology.

IMAX shareholders didn't seem entirely satisfied by the report, and the stock fell 7% in Tuesday morning trading following the announcement. Yet despite selling from short-term traders, long-term investors in IMAX can see the potential that blockbusters like Avengers: Infinity War have to bring more moviegoers into its theaters both in 2018 and in the years to come.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends IMAX. The Motley Fool has a disclosure policy.