Financial Analysis

6. Borrowings Revolving Credit Facility Borrowings, Net As of June 30, 2026 and December 31, 2025, Revolving Credit Facility Borrowings, Net included the following: June 30, December 31, (In thousands of U.S. Dollars) 2026 2025 Wells Fargo Credit Facility borrowings $ 41,000 $ 37,000 Unamortized debt issuance costs (2,163) (2,423) Revolving Credit Facility Borrowings, net $ 38,837 $ 34,577 Wells Fargo Credit Agreement The Company is a party to a Seventh Amended and Restated Credit Agreement, dated as of July 14, 2025 (the Credit Agreement), that provides for a credit facility (the Credit Facility). The Companys obligations under the Credit Agreement are guaranteed by certain of the Companys subsidiaries (the Guarantors), and are secured by first-priority security interests in substantially all of the assets of the Company and the Guarantors. The Credit Agreement provides for a revolving borrowing capacity of $375.0 million, and contains an uncommitted accordion feature that allows the Company to further increase its borrowing capacity by the greater of $140.0 million or by the Companys EBITDA (as defined in the Credit Agreement) (Adjusted EBITDA per Credit Facility) for the sum of the four most recently ended fiscal quarters, subject to certain conditions, depending on the mix of revolving loans and/or term loans under the incremental facility and subject to conditions set forth in the Credit Agreement. The Credit Agreement requires that the Company does not exceed a maximum …

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The following tables summarize the Companys Revenues by reportable segment and revenue stream type for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment: Film Remastering and Distribution $ $ 32,538 $ $ $ 32,538 Other Content Solutions 2,045 103 2,148 34,583 103 34,686 Technology Products and Services Segment: System Sales 25,252 25,252 System Rentals 19,897 19,897 Maintenance 16,632 16,632 Finance Income 3,028 3,028 25,252 16,632 19,897 3,028 64,809 Sub-total for reportable segments 25,252 51,215 20,000 3,028 99,495 All Other 1,402 1,945 3,347 Total $ 26,654 $ 53,160 $ 20,000 $ 3,028 $ 102,842 Six Months Ended June 30, 2026 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment: Film Remastering and Distribution $ $ 61,765 $ $ $ 61,765 Other Content Solutions 4,139 152 4,291 65,904 152 66,056 Technology Products and Services Segment: System Sales 37,669 37,669 System Rentals 36,472 36,472 Maintenance 33,221 33,221 Finance Income 5,785 5,785 37,669 33,221 36,472 5,785 113,147 Sub-total for reportable segments 37,669 99,125 36,624 5,785 179,203 All Other 2,399 2,619 5,018 Total $ 40,068 $ 101,744 $ 36,624 $ 5,785 $ 184,221 Three Months Ended June 30, 2025 (In thousands of U.S. Dollars) …

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10. Income Taxes For the three months ended June 30, 2026, the Company recorded an income tax expense of $3.5 million (2025 $1.2 million). The Companys effective tax rate of 18.1% for the three months ended June 30, 2026 reflects the geographic allocation of income earned in taxing jurisdictions, a decrease in the valuation allowance and tax reserves, partially offset by withholding taxes. The Companys effective tax rate of 8.9% for the three months ended June 30, 2025 reflects the geographic allocation of income earned in taxing jurisdictions and a decrease in the valuation allowance. For the six months ended June 30, 2026, the Company recorded an income tax expense of $5.9 million (2025 $8.5 million). The Companys effective tax rate of 21.2% for the six months ended June 30, 2026, reflects the geographic allocation of income earned in taxing jurisdictions, tax benefit from share-based compensation, tax rate differences in foreign jurisdictions, and reversals of tax reserves, partially offset by an increase in the valuation allowance and withholding taxes. The Companys effective tax rate of 29.4% for the six months ended June 30, 2025, reflects the geographic allocation of income earned in taxing jurisdictions, tax rate differences in foreign jurisdictions which was offset by an increase in the valuation allowance, tax return adjustments and withholding taxes. As of June 30, 2026, the Companys Condensed Consolidated Balance Sheets included net deferred income tax assets of $ …

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4. Lease Arrangements IMAX Corporation as a Lessor The Company provides IMAX Systems to customers through long-term lease arrangements that for accounting purposes are classified as sales-type leases. Under these arrangements, in exchange for providing the IMAX System, the Company earns fixed upfront and ongoing consideration. Certain arrangements that are legal sales are also classified as sales-type leases as certain clauses within the arrangements limit transfer of title or provide the Company with conditional rights to the system. The customers rights under the Companys sales-type lease arrangements are described in Note 2 of the Companys audited Consolidated Financial Statements included in its 2025 Form 10-K. Under the Companys sales-type lease arrangements, the customer has the ability and the right to operate the hardware components or direct others to operate them in a manner determined by the customer. The Companys lease portfolio terms are typically non-cancellable for 10 to 20 years with renewal provisions from inception. The Companys sales-type lease arrangements do not contain a guarantee of residual value at the end of the lease term. The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and an extended warranty generally after the first year of the lease until the end of the lease term. The customer is responsible for obtaining insurance coverage for the IMAX System commencing on the …

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Adoption of New Accounting Pronouncements Measurement of Credit Losses for Accounts Receivable and Contract Assets In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05). The amendments in ASU 2025-05 provide a practical expedient that allows entities to assume current economic conditions as of the balance sheet date will remain unchanged throughout the reasonable and supportable forecast period when estimating expected credit losses for eligible financial assets, including trade receivables and contract assets. The Company adopted ASU 2025-05 as of January 1, 2026. The adoption did not have a material impact on its Condensed Consolidated Financial Statements. Recently Issued FASB Accounting Standards Codification Updates Not Yet Adopted Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (ASU 2024-03). The amendments in ASU 2024-03 expand disclosures about specific expense categories presented on the face of the income statement and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) in commonly presented expense captions (such …

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14. Employees Pension and Postretirement Benefits Defined Benefit Plan The Company has an unfunded defined benefit pension plan, the Supplemental Executive Retirement Plan (the SERP), covering its CEO, Richard L. Gelfond. Under the terms of his employment agreement, as amended, the total benefit payable to Mr. Gelfond under the SERP is fixed at $20.3 million. As of June 30, 2026, the Companys projected benefit obligation under the SERP was $17.9 million (December 31, 2025 $17.5 million). For the three and six months ended June 30, 2026, the Company recorded interest costs of $0.2 million and $0.4 million, respectively, (2025 $0.2 million and $0.4 million, respectively) related to the SERP. The Company expects to recognize additional interest costs of $0.3 million related to the SERP during the remainder of 2026. No contributions are expected to be made to the SERP in 2026. Postretirement Benefits Executives The Company has an unfunded postretirement plan for Mr. Gelfond and Bradley J. Wechsler, former Chairman of the Companys Board of Directors (the Executive Postretirement Benefit Plan). As of June 30, 2026, the Companys postretirement benefits obligation under this plan was $0.5 million (December 31, 2025 $0.5 million). For the three and six months ended June 30, 2026, the Company has recorded an expense of less than $0.1 million, respectively (2025 less than $0.1 million, respectively) related to this plan. Postretirement Benefits Canadian Employees The Company has an unfu …

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17. Restructuring Charges and Other Impairments In each of the three and six months ended June 30, 2026, the Company incurred $2.3 million (2025 $0.8 million, respectively) in Restructuring charges and other impairments in the Condensed Consolidated Statements of Operations. During the second quarter, the Company recognized an impairment charge of $2.0 million (2025 $nil) on an individual documentary film asset following a reassessment of estimated future revenues. The revised estimates reflects updates to estimated market performance and future monetization of the title. In addition, in the three and six months ended June 30, 2026, the Company incurred termination charges of $0.3 million (2025 $0.8 million, respectively) in connection with its plan to optimize its organizational structure, including eliminating redundant roles, addressing spans and layers to capture efficiencies and centralizing certain operational roles. As of June 30, 2026, the Companys liability was $0.6 million (December 31, 2025 $1.4 million) on the Consolidated Balance Sheets within Accrued and other liabilities related to Restructuring charges and other impairments. …

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12. Revenue from Contracts with Customers Disaggregated Information About Revenue The following tables summarize the Companys Revenues by reportable segment and revenue stream type for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment: Film Remastering and Distribution $ $ 32,538 $ $ $ 32,538 Other Content Solutions 2,045 103 2,148 34,583 103 34,686 Technology Products and Services Segment: System Sales 25,252 25,252 System Rentals 19,897 19,897 Maintenance 16,632 16,632 Finance Income 3,028 3,028 25,252 16,632 19,897 3,028 64,809 Sub-total for reportable segments 25,252 51,215 20,000 3,028 99,495 All Other 1,402 1,945 3,347 Total $ 26,654 $ 53,160 $ 20,000 $ 3,028 $ 102,842 Six Months Ended June 30, 2026 (In thousands of U.S. Dollars) Technology Sales Image Enhancement and Maintenance Services Technology Rentals Finance Income Total Content Solutions Segment: Film Remastering and Distribution $ $ 61,765 $ $ $ 61,765 Other Content Solutions 4,139 152 4,291 65,904 152 66,056 Technology Products and Services Segment: System Sales 37,669 37,669 System Rentals 36,472 36,472 Maintenance 33,221 33,221 Finance Income 5,785 5,785 37,669 33,221 36,472 5,785 113,147 Sub-total for reportable segments 37,669 99,125 36,624 5,785 179,203 All Other 2,399 2,619 5,018 Total $ 40,068 $ 101,744 $ 36,624 …

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13. Segment Reporting The Companys Chief Executive Officer (CEO) is its Chief Operating Decision Maker (CODM), as such term is defined under U.S. GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Companys segments. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies of the 2025 Form 10-K. Intercompany profit or loss is not included in the evaluation of performance and allocation of resources. Segment Financial Information The following table presents the Companys revenue and gross margin by reportable segment for the three months ended June 30, 2026 and 2025: Revenue (1) Gross Margin (In thousands of U.S. Dollars) 2026 2025 2026 2025 Content Solutions $ 34,686 $ 33,965 $ 21,911 $ 22,431 Technology Products and Services 64,809 55,639 39,017 30,178 Sub-total for reportable segments 99,495 89,604 60,928 52,609 All Other 3,347 2,080 1,968 993 Total $ 102,842 $ 91,684 $ 62,896 $ 53,602 (1) The Companys largest customer represents 13% of total Revenues for the three months ended June 30, 2026 (2025 12%). No single customer comprised more than 10% of the Companys tot …

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11. Capital Stock and Reserves Share-Based Compensation For the three and six months ended June 30, 2026, share-based compensation expense totaled $7.3 million and $13.0 million, respectively (2025 $7.4 million and $12.6 million, respectively) and is reflected in the following accounts in the Condensed Consolidated Statements of Operations: Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) 2026 2025 2026 2025 Costs and expenses applicable to revenues $ 292 $ 305 $ 591 $ 596 Selling, general and administrative expenses 6,881 6,862 12,133 11,582 Research and development 142 190 316 384 Total $ 7,315 $ 7,357 $ 13,040 $ 12,562 The following table summarizes the Companys share-based compensation expense by each award type: Three Months Ended Six Months Ended June 30, June 30, (In thousands of U.S. Dollars) 2026 2025 2026 2025 Restricted Share Units $ 4,208 $ 4,519 $ 7,097 $ 7,386 Performance Stock Units 2,003 1,969 4,338 3,901 IMAX China Long Term Incentive Plan Restricted Share Units 874 734 1,208 1,047 IMAX China Long Term Incentive Plan Performance Stock Units 230 135 397 228 $ 7,315 $ 7,357 $ 13,040 $ 12,562 For the three and six months ended June 30, 2026, the Companys share-based compensation expense included restricted share units to non-employees of $1.7 million for each such period, of which $1.7 million granted during the six month period vested immediately (2025 $1.7 million for each such period). Stock Option Summary The following tab …

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