The North American box office is expected to have brought in $8.5 million during 2024, marking a 4% year-over-year decline, as sporadic shortfalls were offset by various outperformance, analysts at Wedbush believe.
“Overall, the year began slow, impacted by the SAG-AFTRA strikes, but various titles piqued moviegoer interest throughout the year,” analysts wrote in a note to clients.
Notably, the third quarter outperformed expectations and topped a tough comparison from Barbie in the year-ago quarter.
The fourth quarter is also expected to end strong with family-friendly releases Mufasa and Sonic 3.
Analysts maintain their high expectations for 2025, forecasting a 7% increase in the North American box office to $9.1 billion and a 9% increase to $9.9 billion in 2026.
IMAX Corp (NYSE:IMAX) is expected to be a prominent screen partner in 2025, gaining significant market share from its filmed-for-IMAX titles, which will be released throughout the year, including Mission: Impossible and Avatar.
Analysts expect 25% box office growth for IMAX next year, translating to high-single-digit revenue growth and EBITDA margins of 40% plus, in line with IMAX's guidance.
IMAX's global footprint expansion and diversification into alternative content are expected to contribute to its market share gains, with over 14 filmed-for-IMAX titles scheduled for release in 2025.
Wedbush has an ‘Outperform’ rating on IMAX, which also holds a place on its Best Ideas List.
Additionally, the analysts highlighted that revenue per attendee has been increasing post-pandemic, driven by a preference for premium screens like IMAX and higher spending on concessions.
“Moviegoers continue to spend more when they go to the theaters, opting for premium screens and a larger basket of high-margin concessions, reducing the need for implemented price increases to expand revenue,” they wrote.
This has been a key factor in the overall revenue growth for companies like ‘Neutral’ rated Cinemark Holdings (NYSE:CNK) and AMC Entertainment Holdings (NYSE:AMC), they added.
While Cinemark is expected to approach pre-pandemic EBITDA, AMC is still working toward historical EBITDA levels as it continues to reduce its footprint.
Looking at industry trends, analysts noted studios have reaffirmed their commitment to exclusive theatrical windows, particularly after the turbulent years following early day-and-date streaming releases.
This strategy has proven successful, with films benefiting from extended theatrical runs, boosting both word-of-mouth and streaming performance, they wrote.
The trend of shorter exclusive windows (30 to 45 days for blockbusters) has become the new standard, with longer windows reserved for high-performing titles. This shift is seen as beneficial for profitability, allowing studios to leverage combined marketing campaigns for smaller films while maximizing returns from major releases, according to Wedbush.