All right guys, good afternoon. How's everybody doing? We are going to be listening into the IMAX investor call here in about 8 minutes, 4:30 Eastern. They did just drop the results and it looks like they are a little bit lower than I was expecting. I was looking on stockanalysis.com. They had a consensus estimate of $106 million revenue, and I'm looking here on their Q4 revenue and it said $92 million. Net income for the quarter $5 million. EPS 10 cents, adjusted EPS 27 cents, and the estimate on earnings per share from stockanalysis was 31, so a little bit of a miss. Also, I don't think we talked about it on this morning's call, but Cinemark was a miss of about 6 cents. They came in at 32 and analysts were expecting 38. So we'll find out what they have to say here in just a couple minutes. Meanwhile, let's see who is in the chat. Let me get that screen up so I can see it. So many tabs open here, let me close some of these. Too much to look at. Cinemark, we don't care about you anymore. Cinemark we don't that one. We'll come back to that.
All right, D, what's up WSB? He says, 'Isn't this year all about business in China for IMAX?' That is what I've been hearing on the news, whatever that is. What is that anime movie, would you call it, that's going on in China right now making all the big bucks? A billion dollars plus. Good news for IMAX. AMC doesn't have any theaters in China. Maybe some share dilution, so maybe three rational reasons why Cinemark was down. And MCS Marcus Corp down two and a half percent on the day. Let me pop out this live stream on Twitter real quick, hang on second. Shareable link all in two minutes. Let's see if we, yeah, we probably still have music. Anya, how you doing? Anya says, 'Some people are never satisfied.' Yeah, Anya, we run into that a lot, don't we? Still music. If you didn't catch it earlier today, midday I dropped a video with an update, a detailed update, well more detailed than we've talked about on the AMC lawsuit. Someone just commented on Twitter, they said, 'I think that that lawsuit is because they want people to be... someone is suing AMC because they want you to be scared about bankruptcy.' I don't know, that seems kind of far-fetched. I think you should be aware that there is bankruptcy risk if it doesn't go AMC's way, but they're suing because they lost all their collateral, and we will just have to wait and see how that turns out. Hopefully, sane minds prevail and these guys work out some agreement or settlement. Net income Q4 IMAX $5 million, EPS 27 cents. Full year net income plus 3% year over year. Huh, I guess AMC was not the only one that had a flat year. Huh. 146 installs to start 2025. IMAX smashes box office records for Chinese New Year's slate with $130 million and counting, already up over 90% from the previous best. Wow, so you're telling me that their Q1 revenue already in February already beat all of Q4's revenue? That is crazy. IMAX expects to deliver in 2025 a record box office of more than $1.2 billion. I'm going to edit my set of 10 cents, call it 27, and we'll call that adjusted EPS.
Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to the head of investor relations, Jennifer Hosley. Please go ahead.
Good afternoon and thank you for joining us for IMAX's fourth quarter 2024 earnings conference call. On the call today to review the financial results are Rich Gelfond, Chief Executive Officer, and Natasha Fernandez, our Chief Financial Officer. Rob Lister, Chief Legal Officer, is also joining us today. Today's conference call is being webcast in its entirety on our website. A replay of the webcast will be made available shortly after the call. In addition, the full text of our earnings press release and the slide presentation have been posted on the investor relations section of our site. Our historical Excel model is posted to the website as well. I would like to remind you of the following information regarding forward-looking statements. Today's call, as well as the accompanying slide deck, may include statements that are forward-looking and that pertain to future results or outcomes. These forward-looking statements are subject to risks and uncertainties that could cause our actual future results to not occur or occurrences to differ. Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information, future events, or otherwise. During today's call, references may be made to certain non-GAAP financial measures. Discussion of management's use of these measures and the definition of these measures, as well as a reconciliation to non-GAAP financial measures, are contained in this afternoon's press release and earnings materials, which are available on the investor relations page of our website at imax.com. With that, let me turn the call over to Mr. Richard Gelfond.
Thanks Jennifer. Thank you everyone for joining us, and a special word of thanks, appreciation, and support to our many employees, partners, and friends across Los Angeles who have shown such strength and determination in overcoming last month's devastating wildfires. As we enter 2025, IMAX has great momentum, and there's no better indicator than our record-breaking Chinese New Year slate, which is on a history-making run. The company advanced several key strategic priorities in 2024. We strengthened our filmmaker and studio relationships, building the biggest film-for-IMAX slate ever and securing prime placement in studio marketing. We expanded our global network, driving strong system signings and installs and growing our partnerships with Wanda and AMC. And we further diversified our content portfolio, programming a record number of local language films, relaunching IMAX documentaries, and completing a watershed deal with Netflix for Greta Gerwig's Narnia. And by the way, we've already delivered 14 local language films in 2025 year-to-date and our biggest IMAX exclusive music opening ever with Becoming Led Zeppelin. The market is recognizing our progress and our leadership in delivering awe-inspiring experiences worldwide. And yet the bigger opportunity is still ahead of us. We are well positioned to capitalize on the significant growth drivers in our business, including the expansion of our content portfolio, the growth of our global network, and the continued adoption of our technology worldwide. The table is set for what we believe will be a new sustained era of growth for IMAX over the next several years. Today I'd like to discuss our content portfolio, our global network and technology, and then I'll turn it over to Natasha to review the financials.
First, we expect 2025 to be our best year ever at the global box office, projecting more than $1.2 billion in IMAX grosses. We've dramatically expanded our content portfolio. We released a record 118 films, events, and experiences worldwide in 2024, including a record 61 local language films from eight different countries. We were just shy of matching our highest grossing year ever at the domestic box office in 2024 despite a strike-impacted slate and some high-profile studio misses. And we have become more fully integrated than ever into studio marketing campaigns, securing prime placement in everything from out-of-home to TV commercials. In fact, you could argue that IMAX had more spots in last week's record-setting Super Bowl than any company in the world. We're also wielding our increased bargaining power to optimize our programming, as we did during the Thanksgiving holiday in playing Gladiator 2, Wicked, and Moana 2. And we pushed hard to secure an IMAX exclusive re-release of Interstellar, our highest grossing re-release of all time with more than $28 million in box office. Today, we've held our recent global market share gains, up from around 2.5% pre-pandemic to 3.1% globally on just over 1,700 screens worldwide, and from 3% to 4.5% domestically on 400 screens. We've also been creative in expanding our roster of content partners. We agreed with Netflix to exclusively play Barbie director Greta Gerwig's Narnia in IMAX, avenging this new franchise and securing a four-week window for a film that otherwise would have gone straight to streaming. Even Netflix, which has only sparingly released films theatrically, recognizes the power of the IMAX network to create events around blockbuster entertainment. This is a first-of-its-kind partnership, and it speaks to our surging leverage in the marketplace that we're able to get this done and to our unique standing as a global platform. We negotiated directly with Apple for an IMAX release of F1 before the tech giant had even secured a studio partner. We relaunched our doc strategy with The Blue Angels, one of the highest grossing documentaries of the year, and thanks to an innovative distribution deal with Amazon, one of our best performing original films on Prime Video. And we continue to deliver distinctive events, from Queen Rock Montreal to the Paris Olympics opening ceremony to the League of Legends championship in China, which delivered 90% occupancy on 161 IMAX screens at premium ticket prices. Looking ahead, there are three reasons why we're so bullish on the 2025 box office: our biggest and most promising film slate of films for IMAX ever; second, the strength and continuity of the overall slate; and third, what we see as a very likely rebound for moviegoing in China. Our first Hollywood film-for-IMAX title of the year, Captain America: Brave New World, delivered an $18 million opening worldwide for the company, including 10% of the domestic box office. Almost every IMAX release scheduled from May through September is filmed with IMAX cameras. That includes Mission: Impossible – The Final Reckoning, Marvel's Thunderbolts and Fantastic Four, F1, and Superman. This year concludes with Avatar 3, the follow-up to our two biggest grossing films of all time, each of which earned more than $250 million a piece in IMAX. 2026 kicks off with the Avatar carryover and features Christopher Nolan's The Odyssey, as well as Avengers, Star Wars, Super Mario Brothers, Toy Story, and the next film from Dune's Denis Villeneuve. And 2027 already boasts another Avengers and Star Wars, as well as Batman 2 and Frozen 3. With the current Chinese New Year slate, we set records across every key metric, including our best ever box office market share and attendance. We're on our way to doubling our previous box office record for Chinese New Year titles with more than $120 million so far versus $66 million in 2023, our previous record. And the phenomenon Nezha 2 has delivered over 90% of our Chinese New Year box office to date, and we expect it to become the highest grossing film ever in China and the first film to surpass $1 billion in a single market in IMAX history.
Turning to our network and technology, we continue to expand and diversify our global footprint, which now spans 90 countries and territories. We renewed our partnership with Wanda as they transition to new ownership, securing and upgrading a significant portion of our best performing locations in China. AMC announced a significant expansion of IMAX with laser, potentially into more than two-thirds of its IMAX locations. And we entered agreements with five new exhibition partners across North America. Looking ahead, we're focused on markets where we generate high PSAs but remain underpenetrated, including Southeast Asia and the Middle East, Australia, and select markets across Europe and South America. In all those places, we see a lot of opportunity. Local language is a powerful sales tool. We've seen a correlation between our support of local film industries and our ability to drive network growth in these markets. In Japan, we programmed just one local language film in 2019 but grew to 13 in 2024, and we've gone from 36 to 53 systems nationwide over that same period. We've already notched eight system signings in Japan in 2025, with many scheduled for installation this year. We've increased our rollout of JV agreements to capitalize on the film slate over the next several years, especially in a place with really high PSAs. And we're expanding with smaller, well-run exhibitors. In recent months, we've seen success with Cinema West, Epic, Harkins, and Paragon, all in the US. Our end-to-end technology remains a key differentiator. We increased our use of cloud-based digital media via remastering to scale our local language business efficiently. We designed a new proprietary technology to quickly scale our live network while bringing transmission costs down dramatically. And we built the first of our next-generation film cameras, working with Chris Nolan to develop proprietary technology he's using in his current filming of The Odyssey, which comes out in 2026. To close, we believe we're entering a very exciting time for IMAX. We continue to strengthen our brand, increase demand among consumers, and make IMAX technology even more attractive to filmmakers and exhibitors. More than ever, studios are driving moviegoers to IMAX in their marketing. When there are awe-inspiring events that fully capitalize on the IMAX experience, audiences show up. And we have a more promising slate through the end of the decade than we've ever seen in the few years going forward. We look forward to seizing this opportunity to deliver results for our shareholders. Thank you, and with that, I'll turn it over to Natasha.
Thanks Rich, and good afternoon everyone. 2024 was a year of real progress financially and operationally at IMAX. We have strengthened our position by expanding our content portfolio and global network while at the same time driving efficiencies in our cost base and improvements in cash conversion. All of this sets the table for success in 2025 and beyond. IMAX delivered solid financial results for the full year 2024, including full year revenues of $352 million, adjusted EBITDA of $139 million, resulting in adjusted EBITDA margin of 39%, achieving the top end of our guidance for high 30s percent. For the fourth quarter, we saw solid growth year-over-year. We delivered revenues of $93 million, up 8% from the prior year. Content Solutions revenues of $26 million grew 34% year-over-year, highlighted by a record Thanksgiving weekend box office and strong results from the re-release of Interstellar. Compared to our Q4 expectation, IMAX box office fell short mostly due to the underperformance in China, which has now significantly turned around, and a softer than expected Christmas holiday period. Technology products and services Q4 revenues of $64 million was up 2% year-over-year as growth in box office and maintenance revenue was offset by a lower mix of sales arrangement system installations moving to profit. Q4 gross margin of 52% reflects a nominal increase over Q4 2023. We continue to see positive results across expense areas. SG&A excluding stock-based compensation was $27 million, a $2 million improvement year-over-year, driven by benefits from our ongoing expense management and reduction initiatives along with lower compensation payouts. R&D was also lower year-over-year. In 2024, our team focused on the development and creation of new film cameras and other technologies for which costs have been capitalized. In addition, we continue to take proactive steps to enhance operational efficiency, reduce costs, and optimize IMAX's organizational structure, including eliminating redundant roles and centralizing select functions. Over the fourth quarter, total consolidated adjusted EBITDA of $37 million increased $12 million year-over-year. Lastly, adjusted EPS for Q4 was $0.27, an increase of $0.10 or 59% growth over the prior year. This result includes a Q4 tax rate of 18%. As a reminder, we took a number of actions in 2024 to improve our corporate structure and align operations geographically, including an internal asset sale which we believe will result in a more effective tax rate in the future. Turning to full year cash flow and balance sheet, operating cash flow improved in 2024 to $71 million, up 21% from $59 million in 2023. Our improvements in working capital, particularly receivable collections, led to a stronger adjusted EBITDA conversion rate, which is a priority of the team. We will continue to improve this further as IMAX box office grows and we maintain our focus on working capital. Our capital position remains very strong with cash of $101 million, up from $76 million at the end of 2023. Debt excluding deferred financing costs was $269 million as of year end 2024, which compared to $257 million at the end of 2023. As a reminder, $230 million of our debt comes from our convertible senior notes due in April 2026 that bear an interest rate of 5% per annum with a call leading to a $37 per share conversion price. Our current available liquidity is over $418 million, which includes $317 million in available borrowing capacity under the company's various revolving facilities. In 2024, we used our available capital to invest in the business, having spent $41 million on capex with almost 60% of that or $24 million in growth capex, an increase of $6 million year-over-year. In 2024, we also deployed capital to deliver direct shareholder returns with $18 million in IMAX share repurchases, including IMAX China. IMAX Corp repurchases had an average price of $13.99 and were weighted toward the first quarter of 2024 when we drew on our revolver for repurchases at a time when our share price was significantly pressured following the Hollywood strikes. Looking ahead, our full year guidance for 2025 is based on our confidence in the positive trajectory for IMAX. With the portfolio of titles scheduled to release in 2025, we aim to achieve a record level of IMAX box office over $1.2 billion, led by several geographic factors. Starting first with domestic box office, attendance and IMAX fandom have been on the rise even in a strike-impacted year that was weighted toward family animation titles. We nearly matched our domestic record box office from 2023. The domestic potential is even greater in 2025 where we have a record number of film-for-IMAX titles. This is significant as our opening weekend domestic market share is historically over 20% higher for film-for-IMAX titles.
Secondly, within greater China, there is a significant opportunity for growth considering 2024's box office was $200 million, or approximately $100 million lower than 2023 and more than $15 million lower than the record 2019. As Rich described, the 2025 Chinese New Year slate has smashed through all records, positioning us to surpass our best ever Q1 box office in China of $106 million in Q1 2019. Third, in rest of world, we continue to expand our local language partnerships. For example, we will have our first Arabic and Vietnamese titles coming in 2025, and the rest of world IMAX continues to grow up over 5% in 2024. The last factor driving our confidence in 2025 box office target is the next Avatar film anchoring the end of the year. As a reminder, the first two Avatars are number one and number two on IMAX's all-time box office list. This is a proven way to close 2025 and to start off 2026, a year that could easily outpace 2025. Avatar is also a good exhibitor incentive, which we coin the 'Avatar effect' for new system signings and installation. As an example, in advance of the last Avatar, we had 40 systems installed in the month prior to its release. Which leads me to our system installation guidance. We expect 145 to 160 system installations in 2025, which compares to 146 systems in 2024 and 88 systems in 2023, skewed towards joint revenue sharing arrangements which will benefit operating leverage, particularly in the domestic market. Lastly, on guidance, we expect adjusted EBITDA margin to be 40% at a minimum in 2025. As has been shown in the past, there is significant operating leverage in IMAX's business as we grow our network and box office, given many costs are relatively fixed and as we continue to reduce this fixed cost base that we carry. Finally, we look to continue efforts to be a more efficient company and reduce costs. We will do this as part of our ongoing plan to be disciplined and focus on driving financial performance longer term. We are very optimistic on how IMAX's increasing scale and growing importance in the industry can translate to higher financial growth. The visibility into the film slate through the end of the decade has never been as good, with an abundance of mega franchise titles. The combined visibility into the future IMAX slate along with a significant runway to grow our network further, as IMAX location zones are less than 50% penetrated, gives us confidence in our longer term growth and margin expansion. To conclude, IMAX's global scale is unmatched and still growing. Our value as a launch platform for awe-inspiring experiences is proven. We continue to innovate and develop new technologies and products, such as our latest film cameras and other technologies. Our relationships with studios and filmmakers, as well as exhibitors, have never been stronger. All of this, along with the strength of our balance sheet and business model, tailwinds in the market, and our focus on executing on the opportunities before us, give us confidence. We believe IMAX is positioned to deliver strong growth, expanding margins, and increase in cash flows in 2025 and beyond. With that, I will turn the call over to the operator for Q&A.
Thank you so much. And as a reminder, to ask a question, simply press star 1-1 on your telephone and wait for your name to be announced. To remove yourself, press star 1-1 again. One moment for our first question from the line of Eric Handler with Roth Capital. Please proceed. Eric, your line is open.
Sorry, helps to take mute off. Thanks for the question. I wondered, Rich, if you could give a little insight into with your screen count growth this year, how do you think that plays out in terms of North America versus China versus the rest of the world in terms of installations?
You know, Eric, I don't have the chart in front of me of where our screen count is growing, but remember we guide it to 145 to 160 installs. So I just don't know the territories, but that's not going to make a material impact on box office in any one region. I think what you could do is basically look at where our historical over the last few years installs have been and extrapolate out, but I don't think it's going to really change the mix dramatically. Okay, and maybe just put it another way. You talked about focus on the highest revenue generating markets. At this point, as you look at where a lot of your discussions are going, which of those markets do you see as being the most opportunistic right now? Yeah, I mean, I think Japan is extremely strong. We've had around eight signings already this year and we have a number of other discussions going on, which is very positive for us. Also, there's a lot of activity going on in Western Europe. In North America last year, we had signings with eight different new exhibitors, so they have been largely in high revenue markets. But also, Eric, it's...
Kind of a nuance point which you'll get, but the extremely high numbers coming out of China for Chinese New Year, remember that those theaters it's local language so that's a 12.5% take rate in China on the film side, and remember it's a very heavy JV area and a lot of the box offices from the higher tier cities, so our total take from JVs is actually higher in China than it is from JVs in other parts of the world. So I think you'll see that number, but both the film side and the JV side pop a fair amount, certainly in the first quarter. That's helpful. And then one last quick one for Natasha. Natasha, you mentioned the convert, you still have 14 months to go before it matures, but any thoughts on how you're thinking about that as it matures? What you might do in terms of, do you just let it convert, do you roll it over, do you put more permanent financing in place?
Yeah, you know, we're in a strong financial position and we have various options, as you know, and we're currently working through the plans. I mean, the notes are sitting at 0.5% with the capped call, it brings us up to the $37 conversion price, so it's still a really good piece of paper that we could sit on and really pick out what our best options are for us as well. We have the revolver available to us as well, so you know, I think we are working through what that could look like in the future for us.
Thank you. Our next question is from the line of Michael Hickey with the Benchmark Company. Please proceed.
Hey, Rich, Natasha, Jennifer, congratulations on the quarter and year, and thank you for taking our questions. Rich, I guess just on the Netflix deal, pretty incredible. Just curious if to kind of expand on this partnership with Netflix for Narnia, you can take that anywhere you want, Rich, but I am kind of curious on the construction of that deal, how it came together, and how repeatable it is you think in the future for maybe other exclusive IMAX windows with streamers or traditional studios.
So thanks, Mike. That deal took a pretty long time to put together because IMAX was uniquely positioned to do that deal because, again, given our relationship and our knowledge of studios, talent, exhibitors, obviously there's a lot of different constituencies with different agendas that go in there, so we really had to construct something that would work for the exhibitors, that would work for Greta, that would work for Netflix, that would work for a lot of people. The right amount of windows, the right amount of play time. You know, even though we've discussed a little about it, it's a fairly complex deal to have met all of the various constituencies. So in terms of is it a template, I don't think every deal, every Netflix movie is going to be appropriate for an IMAX kind of global releasing. I think it's only going to be certain kinds of movies, and I think in certain ways this was a really great movie because I think there are like eight movies planned, something like that, and I think what IMAX does best is really launch franchises and launch events. Whether that's the League of Legends or whether that's the Olympics or whether it's Superman coming up this year or Mission Impossible, you know, this is the kind of movie that's very conducive to an IMAX release, and it's exclusive in IMAX and it's global. So I think the IMAX theaters that play it will do very well, and I think it'll create a halo status around Netflix and its content that our exhibitors otherwise wouldn't have had. You know, I've talked to Netflix about this, and I think in general they're as excited as we are to do it, but we're not in a rush to do another one tomorrow. I mean, I think the factors have to come into place that work for everyone. On the other hand, I think if this works, it's going to be extremely tempting for the talent, it's going to be tempting for IMAX, and it's certainly going to be tempting for Netflix. But I think the other thing I want to add, it's not as unique as you think in a different form. So we're doing the Formula 1 movie this year with Apple and Warner Brothers, and the director and producer Joe Kosinski and Jerry Bruckheimer really wanted to lean in to IMAX early on and approached us maybe a year ago, and that was the same principle: how do I create an event around the movie? And with Amazon this year we did our Blue Angels doc, and that was how to create an event around our movie. And I think given our track record in launching these kind of events, there will be more projects like this. I think it'll be successful at the end of the day, and I think it's a good template for not just Netflix but doing business with others.
Nice, thank you, Rich. The second question from us on the Chinese New Year. I think we knew it was going to be pretty strong, I think it blew away probably everyone's expectations, probably including yours. Just sort of curious how much you think this was slate driven, which is pretty obvious, and maybe less obvious, how much do you think of this being a market recovery, which I think is also somewhat important when you think about the durability of the growth from the China region. And then a follow-up on that, Rich, sorry to heap all these on, and I'll stop. Obviously the Chinese New Year has been remarkably strong, you end with Avatar. Do you feel like you have enough sort of consistent drumbeat of content in between those two catalysts to give you confidence for the remainder of the year?
So to start at the beginning, I mean last year, as you can see in our financial results, the Chinese market was somewhat disappointing, and that was more a coming out of COVID content. What was in the pipeline was thin coming out of COVID, and even the movies that they were were the wrong kinds of movies to do well in IMAX. And despite that, we pivoted pretty nicely and did things like re-releasing Harry Potter movies and doing League of Legends, so we managed to do the best we could under those circumstances. So a little of it I think was kind of pent-up demand, but I think most of it was really the mix of movies that came out and was just perfect for IMAX. And our team actually chose five movies, saw them all, we did marketing partnerships on some of them including on Nezha 2, and I don't underestimate the power of that. And our market share right now over the last couple weeks for this movie is around 6% of the Chinese market, and historically for animation we've been 2 to 3%. So some of it was the movie, but don't underestimate the power of the brand and the power of the things we've been doing over there. I mean, you could never have predicted these kinds of numbers. So to give you some examples, we already have done more dollars in local language box office in China in the middle of February than we did for the whole year last year. And our overall box office is over $130 million so far. Remember, in China for the year it was a little shy of $200 million. So this is really one that's kind of off the charts. Now we do feel very good about the gap between now and Avatar. And actually, I didn't have a chance to announce it at the beginning, but Daniel Manwaring, who's our CEO of IMAX China, happens to be in LA with me right now, so he's in a better position to comment about the intermediate slate. So Daniel, please answer that.
Sure. I think the biggest difference looking forward is, first off, I want to say I think this film Nezha 2 has really long legs, so we're going to be programming this for a while. Looking ahead though, the level of transparency in the Chinese local language slate is very different this year than it was last year. And to Rich's point, I think exhibitors, producers, studios have a lot more confidence in this year, and therefore we're seeing bigger budget films. So this year we're going to be releasing the most number of IMAX Chinese titles in the company's history. These are big budget movies with the country's top filmmakers and really the best of the best. Looking even further into the Hollywood slate, I think there's also a much better looking slate compared to 2024, with films like Zootopia 2, obviously Avatar 3, Mission Impossible, and Formula 1. So I think good films are still going to really continue to work well in China even beyond the Chinese New Year, and this slate feels much more transparent and a lot healthier than it did last year.
Thank you. One moment for our next question. Please is from Steven Frankel with Ross and Blast Securities. Please proceed.
Congratulations, Rich. This China performance is a turnaround, but it also sounds like you're seeing things that maybe give you longer term confidence in increased market share there. Given the way the production values are increasing, do you think that leads to the potential for more screens than you initially thought, or are we really talking about driving up PSAs because you had a period of PSA compression in China?
So that's a good question and something we've been talking about. You've heard us before talk about the Avatar effect or the Oppenheimer effect, which is when there's a really big film and it really drives up box office, there are ancillary benefits. You sign more theaters, you install more theaters, other studios copy the distribution pattern, studios up their marketing budgets. And we've been debating internally what the extent of the Nezha effect will be. And I think from my point of view, there's just no question there will be some kind of effect. I mean, at the most basic level, remember the Chinese exhibitors are coming out of a fairly stressful period of time financially, and the movie overall is over $1.6 billion, so they're flush with cash that they weren't. So obviously they can make strategic decisions, and I think some of them will be investing in IMAX in different ways. And again, I think the market share gains which I just spoke about are another factor. So my sense will be that it'll have an impact on our overall business there. I know your follow-up question will be how much. The answer is we don't know, it's way too soon. But I think that combined with what Daniel talked about, which is a really good slate going forward, plus the pent-up demand, I feel fairly confident on the signing side. That's a more complicated one because, as you may remember, we made the strategic decision not to do that many joint ventures outside of tier one and tier two cities. So I'm quite sure it will drive up the demand, but I'm not sure it's going to change our underwriting standards. So we'll have to see what that impact is going forward.
Thanks. And then to switch to years, the last couple years we talked a lot about live events because the Hollywood slate was lacking. Now it looks like you're entering a multi-year run where you're covered over with big tentpoles. What does that imply for that live event strategy? How do you work and do both well at a?
At a couple of levels, I think our live event strategy fits in perfectly. First of all, it brings new audiences to IMAX. So for the League of Legends, where we had 90% plus capacity in 161 theaters in China, 80% of the people had never been in an IMAX theater. And I think that's not a coincidence about our market share gains there going forward. And this year we did Led Zeppelin, which did $3 million domestically in its opening weekend, which made it number seven of any film in the country. I can make a bad joke which I shouldn't, but I will. But those results probably qualify us in this environment to put it in for an Academy Award in terms of commercial success. And what I mean by that is $3 million is a pretty decent opening for an event kind of movie like that. And also our clients, the exhibitors, our partners, they really like it because it brings new people into the theater. And remember from earlier calls, we're very focused on capacity utilization. And while these films sell out on weekends, on Tuesday nights when we run a lot of these things or Wednesdays, they're not full. So that's all incremental revenue for us and for the exhibitor. So yes, we have to be a little bit more careful and make sure how to program them. But for last year, I'm trying to remember, and Natasha could correct me, but I think we did something like 55 events that were not movies over the course of the year. Am I right at that? Or it's some big number, I don't remember. But we will have the ability to still program those.
Yeah, our next question comes from the line of with Seaport Research Partners. Please proceed.
Thank you. I was wondering if your 40% plus adjusted EBITDA margin guide would come more from gross margin or from SG&A. And similarly, trying to dig down on the moving pieces there, how much would be coming from your business operating leverage with the box office growth versus from cost cutting efforts?
Hi David. There would be a mix in it. We are going to continue to work on our operational efficiencies, and we've done a really good job between starting in '23 and again in '24 making a lot of effort with changing our corporate structure and doing the internal assets sale to also looking at R&D and really optimizing our employee base to remove redundancies, to think through how can we become more efficient, along with even looking at just normal operating costs. And I think there's just the opportunity to continue to do that as we rightfully should. But then there's also the operating leverage that will definitely come from our top line revenue growth. I mean, with a billion two plus of box office in our guide, that automatically creates the operating leverage in our model. And I know, David, like you haven't been around for a long time, but a few years ago that operating leverage kicked in in high gear and you can see it nicely. I think you think back to Oppenheimer, a 47% plus EBITDA margin quarter there. There are lots of opportunities when you start to think through how can these revenue dollars fall right to the bottom line, especially as we continue to even think through operating our cost model from a margin perspective and looking through efficiencies in the way we work, especially as we remaster films and work through even marketing and other components if you think about digital versus print and other opportunities.
Thanks. And if you could explain if you have any screen relationships in your network that are expiring this year that could be up for renewal, and could there be any opportunities to reprice anything there, or should we just really expect stable kind of rev share metrics from here?
