Premium cinema technology company IMAX (NYSE: IMAX) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 12.2% year on year to $102.8 million. Its non-GAAP profit of $0.43 per share was 58.8% above analysts’ consensus estimates.

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Company Overview

Originally developed for World Expo '67 in Montreal as an innovative projection system, IMAX (NYSE: IMAX) provides proprietary large-format cinema technology and systems that deliver immersive movie experiences with enhanced image quality and sound.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $416.1 million in revenue over the past 12 months, IMAX is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, IMAX’s 17.9% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows IMAX’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. IMAX’s annualized revenue growth of 7.8% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, IMAX reported year-on-year revenue growth of 12.2%, and its $102.8 million of revenue exceeded Wall Street’s estimates by 8.8%.

Looking ahead, sell-side analysts expect revenue to grow 8.5% over the next 12 months, similar to its two-year rate. This projection is healthy and indicates the market sees success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

IMAX has managed its cost base well over the last five years. It demonstrated solid profitability for a business services business, producing an average adjusted operating margin of 13.2%.

Analyzing the trend in its profitability, IMAX’s adjusted operating margin rose by 16.4 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q2, IMAX generated an adjusted operating margin profit margin of 27.4%, up 11.7 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

IMAX’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

IMAX’s EPS grew at an astounding 39.3% compounded annual growth rate over the last two years, higher than its 7.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into IMAX’s earnings to better understand the drivers of its performance. IMAX’s adjusted operating margin has expanded over the last two years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, IMAX reported adjusted EPS of $0.43, up from $0.26 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects IMAX’s full-year EPS to grow 8.3% from $1.65 to $1.79.

Key Takeaways from IMAX’s Q2 Results

It was good to see IMAX beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 5.3% to $41.40 immediately after reporting.

Sure, IMAX had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).