Want to see IMAX full AI Analyst Report?

IMAX (IMAX) Risk Analysis

680 Followers

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

IMAX disclosed 33 risk factors in its most recent earnings report. IMAX reported the most risks in the “Finance & Corporate” category.

Risk Overview Q2, 2026

Risk Distribution

36% Finance & Corporate

21% Tech & Innovation

21% Macro & Political

9% Production

6% Legal & Regulatory

6% Ability to Sell

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

2022

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

IMAX Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q2, 2026

Main Risk Category

Finance & Corporate

With 12 Risks

Finance & Corporate

With 12 Risks

Number of Disclosed Risks

No changes from last report

S&P 500 Average: 31

No changes from last report

S&P 500 Average: 31

Recent Changes

3Risks added

0Risks removed

0Risks changed

Since Jun 2026

3Risks added

0Risks removed

0Risks changed

Since Jun 2026

Number of Risk Changed

No changes from last report

S&P 500 Average: 1

No changes from last report

S&P 500 Average: 1

See the risk highlights of IMAX in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 33

Finance & Corporate

Total Risks: 12/33 (36%)Below Sector Average

Share Price & Shareholder Rights2 | 6.1%

Share Price & Shareholder Rights - Risk 1

Because the Company is incorporated in Canada, it may be difficult for plaintiffs to enforce against the Company liabilities based solely upon United States federal securities laws.

The Company is incorporated under the federal laws of Canada, some of its directors and officers are residents of Canada and a substantial portion of its assets and the assets of such directors and officers are located outside the United States. As a result, it may be difficult for U.S. plaintiffs to effect service within the United States upon those directors or officers who are not residents of the United States, or to obtain or enforce against them or the Company judgments of U.S. courts predicated solely upon civil liability under the U.S. federal securities laws. In addition, it may be difficult for plaintiffs to bring an original action outside of the United States against the Company to enforce liabilities based solely on U.S. federal securities laws.

Share Price & Shareholder Rights - Risk 2

The market price for the Company's common shares has historically been volatile and declines in market price, may negatively affect its ability to raise capital, issue debt, secure customer business, and retain employees.

The Company is listed on the New York Stock Exchange ("NYSE") and its publicly traded shares have in the past experienced, and may continue to experience, significant price and volume fluctuations. This market volatility could reduce the market price of its common shares, regardless of the Company's operating performance. A decline in the capital markets generally, or an adjustment in the market price or trading volumes of the Company's publicly traded securities, may negatively affect the Company's ability to raise capital, issue debt, secure customer business or retain employees. These factors, as well as general economic and geopolitical conditions, may have a material adverse effect on the market price of the Company's publicly traded securities.

Accounting & Financial Operations8 | 24.2%

Accounting & Financial Operations - Risk 1

The Company has been and may continue to be subject to impairment losses related to goodwill and long-lived assets.

Under United States Generally Accepted Accounting Principles ("U.S. GAAP"), the Company tests goodwill annually for impairment and more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company also tests long-lived assets for impairment if events or changes in circumstances indicate that such assets with an asset group may be impaired. These events and circumstances may include a significant change in legal factors or in the business climate, a significant decline in the Company's share price, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset group. If it is determined that sufficient future cash flows do not exist to support the current carrying value, the Company will be required to record an impairment charge in order to adjust the value of these assets to the newly established estimated value. The Company may be required to record a significant charge to earnings in its Consolidated Financial Statements during the period in which any other impairment of its goodwill or long-lived assets is determined. For additional information, see Note 12 to the Consolidated Financial Statements.

Accounting & Financial Operations - Risk 2

The Company has been and may continue to be subject to impairment losses on its inventories if they become obsolete.

The Company records write-downs for excess and obsolete inventories based upon current estimates of future events and conditions, including the anticipated installation dates for the current backlog of IMAX System contracts, technological developments, signings in negotiation and anticipated market acceptance of the Company's current and pending IMAX Systems.

Accounting & Financial Operations - Risk 3

The Company has been and may continue to be subject to impairment losses on its film assets if such assets do not meet management's estimates of total revenues.

The Company amortizes its film assets, including IMAX Film Remastering costs capitalized using the individual film forecast method, whereby the costs of film assets are amortized and participation costs are accrued for each film in the ratio of revenues earned in the current period to management's estimate of total revenues ultimately expected to be received for that title. Management regularly reviews, and revises when necessary, its estimates of ultimate revenues on a title-by-title basis, which may result in a change in the rate of amortization of the film assets and write-downs or impairments of film assets. Results of operations in future years will include the amortization of the Company's film assets and may be significantly affected by periodic adjustments in amortization rates.

Accounting & Financial Operations - Risk 4

Changes in accounting and changes in management's estimates may affect the Company's reported earnings and operating income.

U.S. GAAP and accompanying accounting pronouncements are highly complex and involve many subjective judgments. Changes in these rules, their interpretation, management's estimates, or changes in the Company's products or business could significantly change its reported future earnings and operating income and could add significant volatility to those measures, without a comparable underlying change in cash flow from operations. More information is provided in "Critical Accounting Estimates" within "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7.

Accounting & Financial Operations - Risk 5

The Company's revenues from existing customers are derived in part from financial reporting provided by its customers, which may be inaccurate or incomplete, resulting in lost or delayed revenues.

A portion of the Company's revenue is based upon financial reporting provided by its customers. If such reporting is inaccurate, incomplete, or withheld, the Company's ability to receive the appropriate payments it is owed in a timely fashion may be impaired. While the Company has the contractual ability to audit IMAX locations, this may not rectify payments lost or delayed as a result of customers not fulfilling their contractual obligations with respect to financial reporting.

Accounting & Financial Operations - Risk 6

The Company may not convert all of its backlog into revenue and cash flows.

As of December 31, 2025, the Company's backlog included 434 IMAX Systems, consisting of 139 IMAX Systems under sales or lease arrangements and 295 IMAX Systems under JRSAs. The Company lists signed contracts for IMAX Systems for which revenue has not been recognized as backlog prior to the time of revenue recognition. The total value of the backlog represents all binding IMAX System sale or lease agreements scheduled to be installed in the future. Notwithstanding their legal obligations, some of the Company's exhibitor customers may be delinquent in their contractual payments and/or not accept delivery of IMAX Systems that are included in the Company's backlog. An economic or industry downturn may exacerbate exhibitor customer liquidity constraints and the risk of customers not accepting delivery of IMAX Systems. Construction projects that are linked to the construction of new malls are particularly susceptible to economic downturns and delays. Customers with system obligations in backlog sometimes request that the Company agree to modify or reduce such obligations, which the Company has agreed to do in the past under certain circumstances, and may agree to do in the future. Customer-requested delays in the installation of IMAX Systems in backlog remain a recurring and unpredictable part of the Company's business, especially in China. A slow down in China's economic growth in the past has caused several of the Company's exhibition partners operating in China to delay payment or theater system installation obligations to the Company. Any reduction or change in backlog could adversely affect the Company's future revenues and cash flows.

Accounting & Financial Operations - Risk 7

The Company's systems revenue can vary significantly from its cash flows under IMAX System sales or lease agreements.

The Company's systems revenue can vary significantly from the associated cash flows. The Company often provides financing to customers for IMAX Systems on a long-term basis through long-term sale or lease arrangements. The terms of these arrangements are typically 10 to 20 years with renewal provisions and provide for three major sources of cash flow to the Company: - initial fees, which are paid in installments generally commencing upon the signing of the agreement until installation of the IMAX System;- ongoing fees, which are paid monthly after the IMAX System has been opened to the public and are generally equal to the greater of a fixed minimum amount per annum or a percentage of box office receipts; and - ongoing annual maintenance and extended warranty fees, which are generally payable annually or quarterly. Initial fees generally make up the vast majority of cash received by the Company under IMAX System sales or sales-type lease agreements. For sale and sales-type leases, the revenue recorded is generally equal to the sum of initial fees and the present value of any future annual minimum payments. Sales arrangements may also include the present value of the estimated future variable consideration based on forecasted box office performance for the term. Cash received from initial fees in advance of meeting the revenue recognition criteria for the IMAX Systems is recorded as deferred revenue. The Company also provides IMAX Systems to customers through JRSAs, which typically have an initial term of 10 years or longer. Under the traditional form of JRSA, in exchange for providing the IMAX System under a long-term lease, the Company earns rental revenues based on a percentage of contingent box office receipts rather than a fixed upfront fee or annual minimum payments. Under hybrid JRSA arrangement, the Company receives a reduced fixed upfront payment and a percentage of contingent box office receipts. For certain of JRSAs that are classified as operating leases, initial fees and fixed minimum ongoing payments are recognized as revenue on a straight-line basis over the lease term. Contingent payments in excess of fixed minimum ongoing payments are recognized as revenue when reported by customers, provided collectability is reasonably assured. As a result of the above, the revenue set forth in the Company's Consolidated Financial Statements does not necessarily correlate with the Company's cash flow or cash position. Revenues include the present value of future contracted cash payments, and there is no guarantee that the Company will receive such payments if its customers default on their payment obligations or if box office does not actualize as forecasted.

Accounting & Financial Operations - Risk 8

The Company's operating results and cash flow can vary substantially from period to period and could increase the volatility of its share price.

The Company's operating results and cash flow can fluctuate substantially from period to period. Fluctuations in IMAX System installations and IMAX GBO, particular, can materially affect operating results. Factors that have affected the Company's operating results and cash flow in the past, and are likely to affect its operating results and cash flow in the future, include, among other things: - the timing of signing and installation of new IMAX Systems (particularly for installations in newly-built multiplexes, which can result in delays that are beyond the Company's control);- the timing and commercial success of films distributed to the worldwide IMAX network;- the demand for, and acceptance of, the Company's products and services;- the timing of revenue recognition of sale and sales-type leases;- the classification of leases as sales-type versus operating;- the level of its sales backlog;- the signing of Film Remastering and distribution agreements;- the financial performance of IMAX Systems operated by the Company's exhibitor customers;- financial difficulties faced by customers;- the magnitude and timing of spending in relation to the Company's research and development efforts and related investments, as well as new business initiatives, and the success thereof; and - the number and timing of JRSA installations, related capital expenditures, and related cash receipts. Most of the Company's operating expenses are fixed in the short term. The Company may be unable to rapidly adjust its spending to compensate for any unexpected shortfall in sales or revenue, which would harm operating results for a particular period.

Debt & Financing2 | 6.1%

Debt & Financing - Risk 1

The Company's indebtedness and liabilities could limit the cash flow available for its operations, and expose the Company to risks that could adversely affect its business, financial condition, and results of operations.

As of December 31, 2025, the Company had approximately $413.4 million of consolidated indebtedness and liabilities. The Company may also incur additional indebtedness to meet future financing needs. The Company's indebtedness could have significant negative consequences for its security holders and its business, results of operations and financial condition by, among other things: - increasing its vulnerability to adverse economic and industry conditions;- limiting its ability to obtain additional financing;- requiring the dedication of a substantial portion of its cash flow from operations to service its indebtedness, which will reduce the amount of cash available for other purposes;- limiting its flexibility to plan for, or react to, changes in its business;- diluting the interests of its shareholders as a result of issuing common shares upon conversion of the 2030 Convertible Notes;- holders of the 2030 Convertible Notes may, subject to certain conditions, require the Company to repurchase their 2030 Convertible Notes following a fundamental change; and - placing the Company at a possible competitive disadvantage with competitors that are less leveraged than the Company or have better access to capital. The Company's business may not generate sufficient funds, and the Company may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under its indebtedness, and the Company's cash needs may increase in the future. In addition, the Credit Agreement contains, and any future indebtedness that the Company incurs may contain, financial and other restrictive covenants that limit its ability to operate, raise capital or make payments under its other indebtedness. If the Company fails to comply with these covenants and that of other debt agreements or to make payments under its indebtedness when due, then the Company would be in default under that indebtedness, which could, in turn, result in that and the Company's other indebtedness becoming immediately payable in full. A description of the Company's outstanding indebtedness is provided in Note 13 to "Consolidated Financial Statements" in Part II, Item 8.

Debt & Financing - Risk 2

The Company's debt agreements contain significant restrictions that limit its operating and financial flexibility.

The credit agreement governing the Company's senior secured credit facility contains certain restrictive covenants that, among other things, limit its ability to: - incur additional indebtedness;- pay dividends and make distributions;- repurchase stock;- make certain investments;- transfer or sell assets;- create liens;- enter into transactions with affiliates;- issue or sell stock of subsidiaries;- create dividend or other payment restrictions affecting restricted subsidiaries; and - merge, consolidate, amalgamate, or sell all or substantially all of its assets to another person. In addition, certain provisions in the Company's 0.750% Convertible Senior Notes due 2030 (the "2030 Convertible Notes") and the related indenture could make a third-party attempt to acquire the Company more difficult or expensive, discouraging a third party from acquiring the Company or removing incumbent management, which holders of the Company's common shares may view as favorable. These restrictive covenants impose operating and financial restrictions on the Company that limit its ability to engage in acts that may be in the Company's long-term best interests.

Tech & Innovation

Total Risks: 7/33 (21%)Above Sector Average

Innovation / R&D2 | 6.1%

Innovation / R&D - Risk 1

The introduction of new, competing products and technologies could harm the Company's business.

The entertainment industry is very competitive. The Company faces competition in both in-home and out-of-home entertainment, including within the theatrical space. For example, according to research conducted by Omdia, there were approximately 35,000 conventional-sized screens in North American commercial multiplexes in 2024. In addition, exhibitors and entertainment technology companies have introduced their own branded, large-screen 3D auditoriums or other premium theater systems, such as CJ CGV's 4DX and ScreenX, and in many cases, have marketed those auditoriums or theater systems as having similar quality or attributes as an IMAX System. The rising consumer interest in premium cinematic experiences has resulted in demand for premium formats and could drive more investment into the Company's competitors. If the Company is unable to continue to produce theater systems or provide experiences which are premium to, or differentiated from, other theater systems or entertainment experiences, respectively, consumers may be unwilling to pay the price premiums associated with the cost of IMAX tickets and the global box office performance of IMAX films could decline. The declining global box office performance of IMAX films could materially and adversely harm the Company's business and prospects. Furthermore, many of the Company's commercial exhibitor customers are reliant on the availability of retail shopping malls, which compete with other forms of retailing such as online retail websites, and have been and may continue to be adversely affected by the changes in the retail shopping landscape and consumer purchasing patterns. The Company may in turn be adversely affected by the challenges faced by its exhibitor customers. The Company also faces in-home competition from a number of alternative content distribution channels such as streaming services, video-on-demand, internet, and broadcast and cable television. The average exclusive theatrical release window for films has decreased over the years, and there can be no assurance that this release window, which is determined by the movie studios, will not shrink further, which could have an adverse impact on the Company's business and results of operations. Furthermore, there can be no assurance that film studios will not increase the direct or concurrent release of films to streaming services in the future, intensifying in-home competition. Several streaming services release original films directly to subscribers, bypassing theatrical distribution. The Company further competes for the public's leisure time and disposable income with other forms of entertainment, including gaming, sporting events, concerts, live theater, social media, and restaurants. Furthermore, the Company competes with entertainment and media companies with new technologies and/or substantially greater capital resources to develop and support them.

Innovation / R&D - Risk 2

The Company is undertaking brand extensions and new business initiatives, and the Company's investments and efforts in such business evolution may not be successful.

The Company is undertaking brand extensions and new business initiatives. These initiatives represent potential new areas of growth for the Company and could include the offering of new products and services that may not be accepted by the market. The Company has recently explored initiatives in the field of in-home entertainment technology, including the development of the Company's SCT business to bring The IMAX Experience to users across streaming platforms and consumer devices. The in-home entertainment industry is an intensely competitive business and dependent on consumer demand, over which the Company has no control. The Company has also invested in the connection of the IMAX network to facilitate bringing more unique content, including broadcasts of live events, to IMAX audiences in theaters. New initiatives could also involve acquisitions or the formation of joint ventures and business alliances. New business initiatives involve significant challenges and risks, including that they may not advance the Company's long-term business strategy, that the Company realizes an unsatisfactory return on its investments or fails to realize anticipated business synergies, that the Company has difficulty integrating or retaining new employees, systems, and technology, that the Company has disagreements with a relevant partner with respect to financing, management, and development, that the Company fails to identify or anticipate risks and liabilities of acquired companies in advance of acquisition, or that management gets distracted from the Company's core business. Also, it may take longer than expected to realize the full benefits from these initiatives such as increased revenue or enhanced efficiencies, or the benefits may ultimately be smaller than the Company expected. If any new brand extensions and business initiatives in which the Company invests or attempts to develop do not progress as planned, the Company may be adversely affected by investment expenses that have not led to the anticipated results, including by the write-downs of its assets, by the distraction of management from its core business or by damage to its brand or reputation.

Trade Secrets3 | 9.1%

Trade Secrets - Risk 1

The Company's success is directly related to the availability and success of the IMAX remastered films and other content released to the IMAX network.

An important factor affecting the Company's growth is the availability and strategic selection of content for IMAX locations and the performance of such content. The Company itself produces only a small amount of content and, as a result, the Company relies principally on content produced by third-party content creators, including both Hollywood and local language features converted into the IMAX format. In 2025, 126 films and other content (122 new films and 4 re-releases) were released to the Company's global network. There is no guarantee that content creators will continue to release content to the IMAX network, or that the content selected for release to the IMAX network will be commercially successful. The Company is directly impacted by the commercial success and global box office results of the films released to the IMAX network through its JRSAs, as well as through the percentage of the GBO receipts the Company receives from the studios releasing IMAX films, and the Company's continued ability to secure films, find suitable partners for joint revenue sharing arrangements ("JRSA") and to sell IMAX Systems. The commercial success of films released to IMAX locations depends on a number of factors outside of the Company's control, including whether the film receives critical and consumer acclaim, the timing of its release, the success of the marketing efforts of the studio releasing the film, industry labor disputes, consumer preferences and trends in cinema attendance. Moreover, films can be subject to delays in production or changes in release schedule, which can negatively impact the number, timing and quality of IMAX films released to the Company's global network. In addition, as the Company's international network has expanded, the Company has signed deals with studios in other countries to convert local language films to IMAX's format and release them to the IMAX network. The Company may be unable to select films which will be successful in international markets or may be unsuccessful in selecting the right mix of Hollywood and local language films for a particular country or region, notably Greater China, the Company's largest market. Also, conflicts in international release schedules may make it difficult to release every IMAX film in certain markets. Furthermore, if global box office results of the films released to the IMAX network are not satisfactory or if the scale of the IMAX network declines or does not increase at the same rate as anticipated, studios may be less willing to convert their films into IMAX's format for exhibition in IMAX locations, which would adversely impact the Company's revenue generated from both Film Remastering and Distribution of content across the IMAX network. For additional discussion of the risks related to IMAX Systems and network, please read the above risk factor titled "-General political, social and economic conditions can affect the Company's business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems."

Trade Secrets - Risk 2

The Company may be subject to claims of infringement of third-party intellectual property rights that are costly to defend, result in the diversion of management's time and efforts, require the payment of damages, limit the Company's ability to use particular technologies in the future or prevent the Company from marketing its existing or future products and services.

The Company's commercial success depends in part on not infringing, misappropriating, or violating the intellectual property rights of others. A third party could assert a claim against the Company for alleged infringement of its patent, copyright, trademark, or other intellectual property rights, including in relation to technologies that are important to the Company's business. The Company may not be aware of whether its products or services do or will infringe existing or future patents or the intellectual property rights of others. In addition, there can be no assurance that one or more of the Company's competitors who have developed competing technologies or the Company's other competitors will not be granted patents for their technology and allege that the Company has infringed. Any claims that the Company's business infringes the intellectual property rights of others, regardless of the merit or resolution of such claims, could entail significant costs in responding to, defending, and resolving such claims. An adverse determination in any intellectual property claim could require the Company to pay damages and/or stop using its technologies, trademarks, copyrighted works, and other material found to be in violation of another party's rights and could prevent the Company from licensing its technologies to others unless the Company enters into royalty or licensing arrangements with the prevailing party or are able to redesign its products and services to avoid infringement. Such a license may not be available on reasonable terms, if at all, and there can be no assurance that the Company would be able to redesign its services in a way that would not infringe the intellectual property rights of others. If the Company was required to make payments or comply with an injunction as a result of any infringement, its reputation and financial results could be harmed.

Trade Secrets - Risk 3

The Company may not be able to adequately protect its intellectual property, and competitors could misappropriate its technology or brand, which could weaken its competitive position.

The Company depends on its proprietary knowledge regarding IMAX Systems including digital, audio, and film technology. The Company relies principally upon a combination of copyright, trademark, patent and trade secret laws, restrictions on disclosures and contractual provisions to protect its proprietary and intellectual property rights. These laws and procedures may not be adequate to prevent unauthorized parties from attempting to copy or otherwise obtain the Company's processes and technology or deter others from developing similar processes or technology, which could weaken the Company's competitive position and require the Company to incur costs to secure enforcement of its intellectual property rights. The protection provided to the Company's proprietary technology by the laws of foreign jurisdictions may not protect it as fully as the laws of Canada or the United States. The lack of protection afforded to intellectual property rights in certain international jurisdictions may be increasingly problematic given the extent to which the future growth of the Company is anticipated to come from foreign jurisdictions. The Company may develop proprietary technology or knowledge, including AI-generated works, that are not entitled to intellectual property protection. Finally, some of the underlying technologies of the Company's products and system components are not covered by patents or patent applications. The Company owns patents issued and patent applications pending, including those covering its digital projector, digital conversion technology, laser illumination technology, and other inventions relating to imaging technology and video quality assessment. The Company's patents are filed in the United States, often with corresponding patents or filed applications in other jurisdictions, such as Canada, China, Belgium, Japan, France, Germany, and the United Kingdom. The patent applications pending may not be issued or the patents may not provide the Company with any competitive advantage. The patent applications may also be challenged by third parties. Several of the Company's issued patents expire between 2026 and 2043. If the Company's patent claims are rendered invalid or unenforceable, or narrowed in scope, the patent coverage afforded the Company's products and services could be impaired, which could negatively affect its competitive position. In addition, competitors and other third parties may be able to circumvent or design around the Company's patents and may develop and obtain patent protection for more effective technologies. If these developments were to occur, it could have an adverse effect on the Company's sales or market position. Any claims or litigation initiated by the Company to protect its proprietary technology or other intellectual property could be time consuming, costly, and divert the attention of its technical and management resources. If the Company chooses to go to court to stop a third party from infringing its intellectual property, that third party may ask the court to rule that the Company's intellectual property rights are invalid and/or should not be enforced against that third party. The Company relies upon trade secrets and other confidential and proprietary know-how to develop and maintain the Company's competitive position. While it is the Company's policy to enter into agreements imposing nondisclosure and confidentiality obligations upon its employees and third parties to protect the Company's intellectual property, these obligations may be breached, may not provide meaningful protection for the Company's trade secrets or proprietary know-how, or adequate remedies may not be available in the event of an unauthorized access, use or disclosure of the Company's trade secrets and know-how. Furthermore, despite the existence of such nondisclosure and confidentiality agreements, or other contractual restrictions, the Company may not be able to prevent the unauthorized disclosure or use of its confidential proprietary information or trade secrets by consultants, vendors and employees. In addition, others could obtain knowledge of the Company's trade secrets through independent development or other legal means. The Company believes that protecting the IMAX brand is a critical element in maintaining the Company's relationships with studios and its exhibitor clients and building and maintaining brand loyalty and recognition. Though the Company relies on a combination of trademark and copyright law as well as its contractual provisions to protect the IMAX brand, those protections may not be adequate to prevent erosion of the brand over time, particularly in foreign jurisdictions. Erosion of the brand could threaten the demand for the Company's products and services and impair its ability to grow future revenue streams. In addition, if any of the Company's registered or unregistered trademarks, trade names or service marks is challenged, infringed, circumvented, declared generic or determined to be infringing on other marks, it could have an adverse effect on the Company's sales or market position.

Cyber Security1 | 3.0%

Cyber Security - Risk 1

The Company faces cybersecurity and similar risks, which could result in the disclosure, theft, or loss of confidential or other proprietary information, including intellectual property, damage to the Company's brand and reputation, legal exposure and financial losses. The Company must also comply with a variety of data privacy regulations and failure to comply with such regulations may adversely affect the Company's financial performance.

The nature of the Company's business involves access to and storage of confidential and proprietary content and other information, including its own intellectual property and the intellectual property of certain movie studios or partners it may work with, as well as certain information regarding the Company's customers, employees, licensees, and suppliers. Although the Company maintains procedures, internal policies and technological security measures intended to safeguard such content and information, as well as a cybersecurity insurance policy, the Company's information technology systems, and the information technology systems of its current or future third-party vendors, collaborators, consultants and service providers, could be penetrated by internal or external parties intent on extracting information, corrupting information, stealing intellectual property or trade secrets, or disrupting business processes. Information security risks have increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks, including from emerging technologies, such as advanced forms of AI and quantum computing. The Company's information technology infrastructure may be vulnerable to such attacks, including through the use of malware, software bugs, computer viruses, ransomware, social engineering, and denial of service. Such attacks could compromise the Company's security measures or the security measures of parties with which the Company does business. Because the techniques that may be used to circumvent the Company's safeguards change frequently and may be difficult to detect, the Company may be unable to anticipate any new techniques or implement sufficient preventive security measures. In addition, the Company's sensitive, proprietary, or confidential information could be leaked, disclosed, or revealed as a result of or in connection with the Company's employees' or third-party vendors' use of generative AI technologies. While the Company seeks to monitor such attempts and incidents and to prevent their recurrence through monitoring and modifications, if needed, to the Company's internal procedures and information technology infrastructure, and provides information security training and compliance program to its employees on an annual basis, in some cases preventive action might not be successful. Moreover, the development and maintenance of these security measures may be costly and will require ongoing updates as technologies evolve and techniques to overcome the Company's security measures become more sophisticated. Any such attack or unauthorized access could result in a disruption of the Company's operations, the theft, unauthorized use or publication of confidential or proprietary information of the Company or its customers, employees, licensees or suppliers, a reduction of the revenues the Company is able to generate from its operations, damage to the Company's brand and reputation, a loss of confidence in the security of the Company's business and products, or significant legal and financial exposure, each of which could potentially have an adverse effect on the Company's business. Refer to Part 1, Item 1C, "Cybersecurity" for additional information. In addition, a variety of laws and regulations at the international, national, and state level govern the Company's collection, use, protection and processing of personal data. These laws, including but not limited to the General Data Protection Regulation, the California Consumer Privacy Act, and China's Personal Information Protection Law, are constantly evolving and may result in increasing regulatory oversight and public scrutiny in the future. The Company's actual or perceived failure to comply with such laws and regulations could result in fines, investigations, enforcement actions, penalties, sanctions, claims for damages by affected individuals, or damage to the Company's reputation, among other negative consequences, any of which could have a material adverse effect on its financial performance.

Technology1 | 3.0%

Technology - Risk 1

Failure to respond adequately or in a timely fashion to changes and advancements in technology could negatively affect the Company's business.

In order to keep pace with changes and advancements in technology and in order to continue to provide an experience that is premium to and differentiated from conventional entertainment experiences, the Company has made, and expects to continue to make, significant investments in technology in the form of research and development and the acquisition of third-party intellectual property and/or proprietary technology. A significant portion of the Company's research and development efforts have been focused on the IMAX Laser Systems and film cameras. The Company continues to invest in other projects, including the development of new SCT product offerings and improvements to its existing product suite. The process of developing new technologies is inherently uncertain and subject to certain factors that are outside of the Company's control, including reliance on third-party partners and suppliers, and the Company can provide no assurance its investments will result in commercially viable advancements to the Company's existing products or in commercially successful new products, or that any such advancements or products will improve upon existing technology or be developed within the timeframe expected. AI technologies and their uses are currently undergoing rapid change. If the Company fails to enhance its current AI products and develop new products in response to changes in technology or industry standards, the Company fails to bring product enhancements or new product developments to market quickly enough, or the Company fails to respond to increasing competition from AI-generated content (e.g., AI-created videos or movies), the Company's AI-enabled products could rapidly become less competitive or obsolete.

Macro & Political

Total Risks: 7/33 (21%)Above Sector Average

Economy & Political Environment2 | 6.1%

Economy & Political Environment - Risk 1

Added

Financial and Macroeconomic Risks

- fluctuations in the value of foreign currencies versus the U.S. Dollar, potential currency devaluations, and imposition of foreign exchange controls in foreign jurisdictions;- adverse changes in foreign government monetary and/or tax policies, and/or difficulties in repatriating cash from foreign jurisdictions (including with respect to China, where approval of the State Administration of Foreign Exchange is required);- requirements to provide performance bonds and letters of credit to international customers to secure IMAX System component deliveries;- less accurate and/or less reliable box office reporting;- difficulties in establishing market-appropriate pricing; and - economic conditions in foreign markets, including inflation.

Economy & Political Environment - Risk 2

General political, social and economic conditions can affect the Company's business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems.

The Company's success depends in part on general political, social and economic conditions and the willingness of consumers to purchase tickets to IMAX locations. The majority of the Company's revenue comes from its Technology Products and Services segment. The Technology Products and Services segment earns revenues principally from the sale or lease of IMAX Systems, a portion of which is directly derived from the box office results of the IMAX locations. If consumers' discretionary income globally or in a particular geography falls for any reason, including an economic downturn or recession, sustained inflationary conditions, high interest rates, and supply chain issues, and/or movie-going becomes less popular and consumers' willingness to purchase tickets to IMAX locations declines, the Company's business and revenues may be adversely affected as a result. Furthermore, sustained inflationary pressures observed globally could materially increase the cost of goods, services and personnel, which could cause an increase in the Company's operating costs. The Company also depends on exhibitors to purchase, lease, and install IMAX Systems and to supply venues in which to exhibit IMAX films. The Company is unable to predict the pace at which exhibitors will purchase, lease, or install IMAX Systems with the Company. Furthermore, exhibitors generate revenues from consumer attendance at their theaters, which depends on the willingness and ability of consumers to visit movie theaters and spend discretionary income at movie theaters. In the event of declining box office and concession revenues or other economic headwinds, exhibitors may choose to reduce their levels of presence or expansion, be less willing to invest capital in IMAX Systems, negotiate economic terms that are less favorable to the Company, or decide not to enter into transactions with the Company. Exhibitors' unwillingness and/or inability to purchase, lease and/or install IMAX Systems would adversely impact the Company's business and revenue.

International Operations2 | 6.1%

International Operations - Risk 1

The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales, and future growth prospects.

A significant portion of the Company's revenues and of the GBO earned by the Company's exhibitor customers are generated outside the United States and Canada. Approximately 62%, 58%, and 64% of the Company's revenues were derived outside of the United States and Canada in 2025, 2024, and 2023, respectively. As of December 31, 2025, approximately 72% of IMAX Systems in backlog were scheduled to be installed in international markets. The Company's network spanned 91 different countries as of December 31, 2025, and the Company expects its international operations to continue to account for an increasingly significant portion of its future revenues. There are a number of risks associated with operating in international markets that could negatively affect the Company's operations, sales and future growth prospects. These risks, among others, include: Operational and Supply Chain Risks - difficulties in obtaining competitively priced key commodities, raw materials, and component parts from various international sources that are needed to manufacture quality products on a timely basis;- dependence on foreign distributors and their sales channels;- reliance on local partners, including in connection with JRSAs;- difficulties in staffing and managing foreign operations;- inability to complete installations of IMAX Systems, including as a result of material disruptions or delays in the Company's supply chains, or collect full payment on installations thereof;- public health concerns, including pandemics or epidemics, and regulations in response thereto, which could adversely affect the Company's and its customers' operations; and - harm to the IMAX brand from operating in countries with records of controversial government action, including human rights abuses. Financial and Macroeconomic Risks - fluctuations in the value of foreign currencies versus the U.S. Dollar, potential currency devaluations, and imposition of foreign exchange controls in foreign jurisdictions;- adverse changes in foreign government monetary and/or tax policies, and/or difficulties in repatriating cash from foreign jurisdictions (including with respect to China, where approval of the State Administration of Foreign Exchange is required);- requirements to provide performance bonds and letters of credit to international customers to secure IMAX System component deliveries;- less accurate and/or less reliable box office reporting;- difficulties in establishing market-appropriate pricing; and - economic conditions in foreign markets, including inflation. Geopolitical, Trade, and Regulatory Compliance Risks - new and potentially changing tariffs, trade protection measures, import or export licensing requirements, trade embargoes, sanctions and export controls, and other trade barriers, including but not limited to planned, implemented or threatened tariffs and retaliatory responses thereto, or the residual impacts and uncertainty as a result of changes in tariff or trade policy;- new restrictions on access to markets, both for IMAX Systems and content;- unusual or burdensome foreign laws or regulatory requirements or unexpected changes to those laws or requirements, including censorship of content that may restrict what films or other content are exhibited across the Company's network;- local business practices that can present challenges to compliance with applicable anti-corruption and bribery laws;- poor recognition of intellectual property rights;- difficulties in enforcing contractual rights; and - war, conflict, geopolitical tensions and other political, economic and social instability, terrorist attacks and security concerns, such as escalating tensions in the Taiwan Strait, the ongoing conflict between Russia and Ukraine (the Company has 54 theaters in Russia where IMAX services have been suspended), and tensions in the Middle East (including intensified discussions around regime change in Iran), which could result in consequences, including adverse consequences, for the Company's interests in different regions of the world. Additionally, global geopolitical tensions and actions that governments take in response may adversely impact the Company's ability to operate in such regions and/or result in global or regional economic downturns. For example, the ongoing conflict between Russia and Ukraine and responses thereto have had and may continue to have an adverse impact on the Company's business and results of operations in affected regions, including the continued suspension of the Company's operations in the region. Given the uncertainty as to the scope, intensity, duration and outcome of geopolitical conflicts, it is difficult to predict the full extent of the adverse impact of geopolitical conflicts on the Company's business and results of operations. Additionally, given the global nature of the Company's operations, any protracted conflict or the broader macroeconomic impact of geopolitical conflicts and sanctions imposed in response thereto, have had and could continue to have an adverse impact on the Company's business, results of operations, financial condition, and future performance and may also magnify the impact of other risks described herein, including the risk of cybersecurity attacks, which may impact information technology systems unrelated to the conflict, or jeopardize critical infrastructure in jurisdictions where the Company operates. While the Company has implemented policies, internal controls, and other measures reasonably designed to promote compliance with applicable laws and regulations related to doing business internationally, any violations of these laws and regulations, or even allegations of such a violation, could disrupt the Company's operations and harm the Company's business, financial condition and results of operations. In addition, changes in United States or Canadian foreign policy can present additional risks or uncertainties as the Company continues to expand its international operations. Opening and operating theaters in markets that have experienced geopolitical or sociopolitical unrest or controversy, including through partnerships with local entities, exposes the Company to the risks listed above, as well as additional risks of operating in a volatile region. Such risks may negatively impact the Company's business operations in such regions and may also harm the Company's brand. Moreover, a deterioration of the diplomatic relations between the United States or Canada and a given country may impede the Company's ability to conduct business in such countries and have a negative impact on the Company's financial condition and future growth prospects.

International Operations - Risk 2

The Company faces risks in connection with its significant presence in China and the continued expansion of its business there.

As of December 31, 2025, the Company had 810 IMAX Systems operating in Greater China with an additional 215 systems in backlog, which represent 50% of the Company's current backlog. Of the IMAX Systems currently scheduled to be installed in Greater China, 82% are under JRSAs, which further increases the Company's ongoing exposure to box office performance in this market. The China market faces a number of risks, including changes in laws and regulations, currency fluctuations, increased competition, and changes in economic conditions, including an economic downturn or recession, trade embargoes, restrictions or other barriers, as well as other conditions that may impact the Company's exhibitor and studio partners, and consumer spending. A slowdown of China's economic growth in recent years has caused some exhibitors in Mainland China, including several of the Company's exhibitor partners, to experience financial difficulties which, in certain cases, has resulted in delays in meeting payment and IMAX System installation obligations to the Company and permanent closure of underperforming theaters. There are no guarantees that such financial difficulties will not continue, or that partner delays or failures to meet contractual obligations will not occur in the future, adversely impacting the Company's future revenues and cash flows. The Company does not believe that it is currently required to obtain any permission or approval from the China Securities Regulatory Commission, the Cyberspace Administration of China or any other regulatory authority in the People's Republic of China ("PRC") for its operations, but there can be no assurance that such permissions or approvals would not be required in the future and, if required, that they would be granted in a timely manner, on acceptable terms, or at all. Furthermore, PRC regulators, including the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and the Ministry of Public Security, have been increasingly focused on the regulation of data security and data protection. Regulatory requirements concerning data protection and cybersecurity, as well as other requirements concerning operations of foreign businesses, in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties. To the extent any additional PRC laws and regulations become applicable to the Company, it may be subject to increased risks and uncertainties associated with the legal system in the PRC, including with respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice. Certain risks and uncertainties of doing business in China are solely within the control of the Chinese government, and Chinese law regulates both the scope of the Company's continued expansion in China and the Company's business within China. For instance, the Chinese government regulates the number, timing, and terms of Hollywood films released to the China market. The Company cannot provide assurance that the Chinese government will continue to permit the release of Hollywood IMAX films in China or that the timing, number or performance of IMAX releases will be favorable to the Company. There are also uncertainties regarding the interpretation and application of laws and regulations and the enforceability of intellectual property and contract rights in China. If the Company were unable to navigate China's regulatory environment, or if the Company were unable to enforce its intellectual property or contract rights in China, the Company's business could be adversely impacted. Ongoing political tensions between China and the United States could exacerbate any or all of these risks. Although the United States and China reached a reported trade truce in October 2025, the agreement is only for one year, and it leaves many issues unresolved, resulting in continued uncertainty over the trade relationship. Adverse developments in the U.S.-China relationship could heighten the foregoing risks, could impact the Company's future net income and cash flows and could cause the Company to fail to achieve anticipated growth in China and/or monetize its current assets.

Natural and Human Disruptions1 | 3.0%

Natural and Human Disruptions - Risk 1

The Company's business and financial results could be adversely affected by weather conditions and natural and man-made disasters.

Physical risks, including man-made disasters, such as infrastructure failures, structural collapse, fires, explosions, and acts of war and terror, as well as weather conditions and natural disasters, such as earthquakes, droughts, floods, hailstorms, heavy or prolonged precipitation, wildfires, hurricanes, sea level rise and others, affecting the IMAX global network or corporate locations, could harm the Company's business. Additionally, the physical impacts of climate change may cause occurrences of natural disasters to increase in frequency, severity and duration, magnifying the adverse impact of such occurrences and the cost of insuring against them. The climates and geology of some of the regions in which the Company's principal offices are located, including California, present increased risks of adverse weather or natural disasters. Any such events in the future could disrupt the Company's operations and impact the Company's ability to serve its customers.

Capital Markets2 | 6.1%

Capital Markets - Risk 1

The Company's business may be materially adversely affected by the imposition of tariffs and other trade barriers and retaliatory countermeasures implemented by the United States and other governments.

Since 2025, the U.S. government has implemented substantial and rapidly evolving changes to U.S. trade policies, including increased tariffs and changes in U.S. participation in multilateral trade agreements, while other countries, China and Canada in particular, have undertaken retaliatory measures in response to such changes. While many of the tariffs implemented by the U.S. government were struck down by the U.S. Supreme Court on February 20, 2026, the full extent of the impact of this ruling is uncertain and the impact of previously implemented tariffs and trade policies or of tariffs and trade policies announced in the future could adversely impact the Company's operations, costs and expenses applicable to revenues and cash flows. The Company continues to closely monitor these developments (including whether tariff refunds may be available in light of the recent judicial decision), and there can be no guarantees that further changes to U.S. trade policy and/or retaliatory actions by other countries will not occur. Additionally, uncertainty about global trade relationships has and may continue to increase market volatility, currency exchange rate fluctuation, and economic instability, which may adversely impact the Company's results of operations. Furthermore, any resulting downturn or increase in geopolitical tensions may adversely impact consumers' discretionary income and/or consumer purchasing behavior, which could have a material adverse effect on box office receipts and on the Company's results of operations and financial condition. The extent and duration of previously implemented tariffs and retaliatory actions, the potential changes in tariffs and trade policies in light of the Supreme Court ruling, and the resulting impacts on general economic conditions around the world and on the global filmed entertainment industry in particular, are uncertain and depend on numerous factors, such as the responses of and negotiations among the affected countries. As such, the Company cannot predict the impact to its business from any future changes to the trading relationships between the United States and other countries or the impact of new laws or regulations adopted by the United States or other countries. Furthermore, any adverse development in these areas could exacerbate other risks discussed in "-The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales, and future growth prospects," "-The Company faces risks in connection with its significant presence in China and the continued expansion of its business there," and "-General political, social and economic conditions can affect the Company's business by reducing both revenues generated from existing IMAX Systems and the demand for new IMAX Systems."

Capital Markets - Risk 2

The Company may experience adverse effects due to exchange rate fluctuations.

A majority of the Company's revenues is denominated in U.S. Dollars while a substantial portion of its expenses is denominated in Canadian Dollars. While the Company seeks to manage its exposure to foreign exchange rate risks through its regular operating and financing activities and, when appropriate, through the use of derivative financial instruments, the Company may not be successful in reducing its exposure to these fluctuations. The use of derivative financial instruments is intended to mitigate or reduce transactional level volatility in the results of foreign operations, but does not completely eliminate volatility. Even in jurisdictions in which the Company does not accept local currency or requires minimum payments in U.S. Dollars, significant local currency issues may impact the profitability of the Company's arrangements with its customers, which ultimately affect the ability to negotiate cost-effective arrangements and, therefore, the Company's results of operations. In addition, because IMAX content generates box office dependent revenue in 91 different countries as of December 31, 2025, unfavorable exchange rates between applicable local currencies and the U.S. Dollar can affect the GBO generated by the Company's exhibitor customers and its revenues.

Production

Total Risks: 3/33 (9%)Below Sector Average

Manufacturing1 | 3.0%

Manufacturing - Risk 1

Added

Operational and Supply Chain Risks

- difficulties in obtaining competitively priced key commodities, raw materials, and component parts from various international sources that are needed to manufacture quality products on a timely basis;- dependence on foreign distributors and their sales channels;- reliance on local partners in foreign territories, including in connection with JRSAs;- difficulties in staffing and managing foreign operations;- inability to complete installations of IMAX Systems, including as a result of material disruptions or delays in the Company's supply chains, or to collect full payment on installations thereof;- public health concerns, including pandemics or epidemics, and regulations in response thereto, which could adversely affect the Company's and its customers' operations; and - harm to the IMAX brand from operating in countries with records of controversial government action, including human rights abuses.

Employment / Personnel1 | 3.0%

Employment / Personnel - Risk 1

The loss of one or more of the Company's key personnel, or its failure to attract and retain its employee population, could adversely affect its business.

The Company's operations and prospects depend in large part on the performance and continued service of its senior management team. The competition for experienced senior management in the Company's industry is intense, and the Company may not find qualified replacements for any of these individuals if their services are no longer available on the same terms or at all. The loss of the services of one or more members of the Company's senior management team could adversely affect its ability to effectively pursue its business strategy. In addition, the Company may experience challenges with respect to employee retention given the current competitive labor market. A number of external factors beyond the Company's control, including its industry's highly competitive market for skilled workers and leaders, cost inflation, and workforce participation rates, may negatively affect the Company's ability to retain and attract qualified employees. If the Company experiences high attrition rates in its employee population, the results of its operations may be adversely affected.

Costs1 | 3.0%

Costs - Risk 1

The Company's inability to enter into renewals of new sales and lease agreements on favorable terms or at all would adversely affect its cash flows and operating results.

As of December 31, 2025, approximately 7% of the Company's sales and lease agreements were due to expire in the ensuing 12 months. If these agreements are not renewed, or if the Company is unable to enter into new leases agreements comparable to those currently in effect in a timely manner, then the Company's systems revenue could be adversely affected.

Legal & Regulatory

Total Risks: 2/33 (6%)Below Sector Average

Regulation1 | 3.0%

Regulation - Risk 1

Added

Geopolitical, Trade, and Regulatory Compliance Risks

- new and potentially changing tariffs, trade protection measures, import or export licensing requirements, trade embargoes, sanctions and export controls, and other trade barriers, including but not limited to planned, implemented or threatened tariffs and retaliatory responses thereto, or the residual impacts and uncertainty as a result of changes in tariff or trade policy;- new restrictions on access to markets, both for IMAX Systems and content;- unusual or burdensome foreign laws or regulatory requirements or unexpected changes to those laws or requirements, including censorship of content that may restrict what films or other content are exhibited across the Company's network;- local business practices that can present challenges to compliance with applicable anti-corruption and bribery laws;- poor recognition of intellectual property rights;- difficulties in enforcing contractual rights; and - war, conflict, geopolitical tensions and other political, economic and social instability, terrorist attacks and security concerns, such as the ongoing conflict between Russia and Ukraine, the war in Iran and other armed conflicts in the Middle East, and escalating tensions in the Taiwan Strait, all of which could result in adverse consequences for the Company's interests in different regions of the world. Global geopolitical tensions and actions that governments take in response and the resulting global and regional economic downturns have had and may in the future adversely impact the Company's ability to operate in such regions. For example, the ongoing conflict between Russia and Ukraine and responses thereto have had and may continue to have an adverse impact on the Company's business and results of operations in affected regions, including the continued suspension of the Company's operations across the Company's 54 theaters in the region. Three theaters in Israel and one theater in Lebanon have been impacted by closures or are operating in limited capacity due to the Iran war. The other 31 of the Company's 35 theaters in the Middle East region remain fully operational. Furthermore, disruptions to key global shipping routes, including the Strait of Hormuz, have and may continue to adversely affect global supply chains by increasing transportation time and cost as well as increasing uncertainty in the availability of critical goods and services, which may in turn impact the Company's operations. Given the uncertainty as to the scope, intensity, duration and outcome of geopolitical conflicts, it is difficult to predict the full extent of the adverse impacts of geopolitical conflicts on the Company's business and results of operations. Additionally, given the global nature of the Company's operations, any protracted conflict or the broader macroeconomic impact of geopolitical conflicts and sanctions imposed in response thereto, have had and could continue to have an adverse impact on the Company's business, results of operations, financial condition, and future performance and may also magnify the impact of other risks described herein, including the risk of cybersecurity attacks, which may impact information technology systems unrelated to the conflict, or jeopardize critical infrastructure in jurisdictions where the Company operates. While the Company has implemented policies, internal controls, and other measures reasonably designed to promote compliance with applicable laws and regulations related to doing business internationally, any violations of these laws and regulations, or even allegations of such a violation, could disrupt the Company's operations and harm the Company's business, financial condition and results of operations. In addition, changes in United States or Canadian foreign policy can present additional risks or uncertainties as the Company continues to expand its international operations. Opening and operating theaters in markets that have experienced geopolitical or sociopolitical unrest or controversy, including through partnerships with local entities, exposes the Company to the risks listed above, as well as additional risks of operating in a volatile region. Such risks may negatively impact the Company's business operations in such regions and may also harm the Company's brand. Moreover, a deterioration of the diplomatic relations between the United States or Canada and a particular country may impede the Company's ability to conduct business in that country and have a negative impact on the Company's financial condition and future growth prospects.

Environmental / Social1 | 3.0%

Environmental / Social - Risk 1

Regulatory and market responses to climate change concerns may negatively impact our business and increase our operating costs.

Public concern about climate change and governmental attention to climate matters has resulted in expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change impacts, carbon emissions, water usage, waste management, and risk oversight and has expanded and may continue to expand the nature, scope, and complexity of matters that the Company is required to control, assess, and report. Furthermore, regulatory efforts to combat climate change could result in increases in the cost of raw materials, taxes, transportation and utilities for the Company's suppliers and vendors which would result in higher operating costs for the Company and potentially impact the availability of components used in the IMAX Systems. These and other rapidly changing laws, regulations, policies, interpretations, and expectations and shift in consumer sentiment may increase the cost of the Company's compliance, divert management attention, alter the environment in which it does business, and expose the Company to potentially significant fines or other penalties if it is unable to comply with such laws, regulations or policies, any of which could have a material adverse effect on the Company's business, results of operations, and financial condition. However, the Company is unable to predict at this time, the potential effects, if any, that any climate change initiatives may have on its business.

Ability to Sell

Total Risks: 2/33 (6%)Below Sector Average

Demand1 | 3.0%

Demand - Risk 1

Consolidation among commercial exhibitors and studios reduces the breadth of the Company's customer base, and could result in a narrower market for the Company's products and reduced negotiating leverage. A deterioration in the Company's relationship with key partners could materially and adversely affect the Company's business, financial condition or results of operation. In addition, an adverse economic impact on a significant customer's business operations could have a corresponding material adverse effect on the Company.

The Company's primary customers are commercial multiplex exhibitors. Since 2016, the commercial exhibition industry has undergone significant consolidation both domestically and internationally. For example, in 2025, South Korea's Megabox and Lotte Cinema entered into a merger agreement and are expected to form that nation's largest theatrical exhibition entity. Exhibitor concentration has resulted in certain exhibitor chains constituting a material portion of the Company's network and revenue. For instance, Wanda Film ("Wanda") is the Company's largest exhibitor customer, representing approximately 8% of the Company's total revenues in 2025. As of December 31, 2025, through the Company's partnership with Wanda, there were 393 IMAX Systems operational in Greater China and Wanda represented approximately 21% of the global network and 10% of the Company's global backlog. The share of the Company's revenue that is generated by Wanda is expected to continue to grow as IMAX Systems in backlog with Wanda are opened. No assurance can be given that significant customers, such as Wanda, will continue to purchase IMAX Systems and/or enter into JRSA with the Company and if so, whether contractual terms will be affected. If the Company does business with Wanda or other large exhibitor chains less frequently or on less favorable terms than currently, the Company's business, financial condition or results of operations may be adversely affected. In addition, an adverse economic impact on a significant customer's business operations could have a corresponding material adverse effect on the Company. The Company also receives revenues from studios releasing IMAX films. Hollywood studios have also experienced and continue to experience consolidation, as evidenced by the 2025 acquisition of Paramount by Skydance and a potential acquisition of Warner Bros. Studio consolidation could result in individual studios comprising a greater percentage of the Company's business and overall Content Solutions segment revenue, and could expose the Company to the same risks described above in connection with exhibitor consolidation. In addition, studio consolidation may lead to a reduction in content variety and overall output and/or theatrical release of content, particularly if a studio acquirer is not in the traditional studio production business. Such reduction may adversely impact the availability of films for conversion into the IMAX format and distribution into the IMAX network.

Sales & Marketing1 | 3.0%

Sales & Marketing - Risk 1

There is collection risk associated with payments to be received over the terms of the Company's agreements.

The Company is dependent in part on the viability of its customers for collections under the Company's agreements. Exhibitors, other operators or smaller production studios may experience financial difficulties that could cause them to be unable to fulfill their contractual payment obligations to the Company. As a result, the Company's future revenues and cash flows could be adversely affected.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.