IMAX's Australian Gambit: Leveraging Premium Cinema Demand for Scalable Growth

The global cinema market is undergoing a quiet revolution, driven by audiences' insatiable appetite for immersive, premium experiences. Nowhere is this more evident than in Australia, where IMAX Corporation (NYSE: IMAX) has identified a golden opportunity to amplify its footprint through strategic partnerships. With a current per-screen average (PSA) revenue of $4.5 million—among the highest globally—and a box office share surging to 4.4% in 2025 from 2.6% in 2024, Australia represents a uniquely underpenetrated yet high-margin market for IMAX's growth ambitions. By pairing its IMAX with Laser technology with blockbuster launches like Avatar: Fire and Ash, IMAX is primed to unlock outsized returns in a region poised for premium cinema adoption.

The Australian Market: A Gold Mine for Premium Experiences

Australia's cinema landscape is a study in contrasts. Despite its small population (26 million), the country boasts one of the world's highest per capita box office revenues, driven by a culture of filmgoing and a preference for large-format, immersive experiences. IMAX's current four operational theaters in Australia generated nearly $18 million in 2024, a PSA of $4.5 million that outpaces all but its top markets like China and the U.S. This success is no accident: Filmed for IMAX titles such as Superman and Mission: Impossible – The Final Reckoning have drawn disproportionate revenue, with the latter earning over $400,000 in IMAX theaters alone.

Yet Australia remains vastly underserved. With only four IMAX theaters as of 2024, the market has barely scratched the surface of its potential. By comparison, the U.S. boasts over 1,500 IMAX screens, underscoring the scalability of Australia's opportunity. Analysts at Benchmark note that IMAX's 4.4% box office share in 2025—up from 2.6%—is a clear sign of demand outpacing supply. This growth is set to accelerate as IMAX partners with HOYTS Cinemas to roll out up to five new IMAX with Laser locations, starting with a flagship in Melbourne timed to Avatar: Fire and Ash's December 2025 release.

Blockbusters, Laser Tech, and the “Experience Premium”

IMAX's strategy hinges on two pillars: blockbuster timing and technological differentiation. The Avatar franchise alone has generated over $3.5 billion globally since 2009, with each sequel driving a surge in IMAX theater attendance. The upcoming Avatar: Fire and Ash—a film explicitly formatted for IMAX's 4K laser projection and immersive sound—will serve as a “halo effect” launch for Melbourne's first HOYTS-IMAX theater, drawing audiences hungry for the franchise's spectacle.

The IMAX with Laser technology is central to this play. Unlike traditional projectors, these systems deliver 12-18 foot-lamberts of brightness and 4K resolution, creating an experience that rivals home theater setups. In markets like Australia, where cinema attendance is culturally ingrained, this technology isn't just a upgrade—it's a necessity to compete for “event movies.” Early data from HOYTS' test markets in Sydney and Melbourne show new Laser theaters are already outperforming older IMAX locations by 20-30% in revenue per screen, a testament to the premium demand.

Scalability and Financial Leverage: Why Australia is a Catalyst

The beauty of IMAX's model lies in its asset-light structure. The company earns fees based on box office splits, requiring minimal upfront capital beyond licensing and installation costs. In Australia, the $352 million in 2024 revenue and 39% adjusted EBITDA margin highlight the profitability of this approach. With HOYTS and EVT (Event Cinemas) as partners, IMAX avoids the risks of owning theaters while securing prime locations in high-traffic areas.

The scalability of this model is clear: each new screen in Australia could add $4.5 million annually to IMAX's top line, with margins expanding as fixed costs are absorbed. Analysts at B.Riley estimate that reaching 14 theaters in Australia (up from 4) by 2027 could boost revenue by $50-60 million, or ~15% of IMAX's 2024 total. This is why investors should pay attention: Australia isn't just a regional play—it's a blueprint for IMAX's next phase of global expansion.

Investment Thesis: A Repeat of IMAX's Global Success

IMAX's Australian strategy mirrors its playbook in China and India, where it capitalized on underpenetrated markets with high per-screen potential. In China, IMAX grew its theater count from 200 to 800 screens over a decade, driving a 500% rise in revenue. Australia's smaller size and concentrated urban centers could allow IMAX to achieve similar leverage faster. With $500 million remaining in its share repurchase program and a 1.8% dividend yield, the stock offers both growth and income appeal.

Risks and Considerations

• Overreliance on Blockbusters: IMAX's revenue is tied to hit films. A string of flops could pressure margins.
• Competitor Threats: Dolby Cinema and other premium formats are expanding.
• Macroeconomic Risks: Rising interest rates or recession could dampen discretionary spending.

Final Take: A Long-Term Growth Catalyst

Australia isn't just a market for IMAX—it's a proving ground for its ability to monetize premium experiences in a high-demand, low-supply environment. With IMAX's stock trading at 26x forward EBITDA, the valuation reflects optimism about its global rollout. But in Australia, the math is compelling: $4.5 million per screen at scale means outsized profits with limited risk. For investors seeking exposure to a company poised to dominate the next wave of cinema innovation, IMAX's Australian pivot is a must-watch play.

Investor Action: Consider a gradual position in IMAX, targeting dips below $30/share. Monitor box office performance of Avatar: Fire and Ash and quarterly updates on Australian theater installations.