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Revenue from Contracts with Customers
 3 Months Ended
Mar. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers

12. Revenue from Contracts with Customers

(a)
Disaggregated Information About Revenue

In the first quarter of 2023, the Company updated its reportable segments (see Note 13). Prior period comparatives have been revised to conform with the current period presentation. The following tables summarize the Company’s Revenues by reportable segment and revenue stream type for the three months ended March 31, 2023 and 2022:

 

Three Months Ended March 31, 2023

 

(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

$

 

—

 

 

$

 

30,073

 

 

$

 

—

 

 

$

 

—

 

 

$

 

30,073

 

Other Content Solutions

 

 

—

 

 

 

 

2,028

 

 

 

 

—

 

 

 

 

—

 

 

 

 

2,028

 

 

 

 

—

 

 

 

 

32,101

 

 

 

 

—

 

 

 

 

—

 

 

 

 

32,101

 

Technology Products and Services Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System Sales

 

 

16,119

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

16,119

 

System Rentals

 

 

—

 

 

 

 

—

 

 

 

 

20,058

 

 

 

 

—

 

 

 

 

20,058

 

Maintenance

 

 

—

 

 

 

 

13,551

 

 

 

 

—

 

 

 

 

—

 

 

 

 

13,551

 

Finance Income

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

1,939

 

 

 

 

1,939

 

 

 

 

16,119

 

 

 

 

13,551

 

 

 

 

20,058

 

 

 

 

1,939

 

 

 

 

51,667

 

Sub-total for reportable segments

 

 

16,119

 

 

 

 

45,652

 

 

 

 

20,058

 

 

 

 

1,939

 

 

 

 

83,768

 

All Other

 

 

1,703

 

 

 

 

1,475

 

 

 

 

—

 

 

 

 

—

 

 

 

 

3,178

 

Total

$

 

17,822

 

 

$

 

47,127

 

 

$

 

20,058

 

 

$

 

1,939

 

 

$

 

86,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2022

 

(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

$

 

—

 

 

$

 

19,564

 

 

$

 

—

 

 

$

 

—

 

 

$

 

19,564

 

Other Content Solutions

 

 

—

 

 

 

 

1,406

 

 

 

 

18

 

 

 

 

—

 

 

 

 

1,424

 

 

 

 

—

 

 

 

 

20,970

 

 

 

 

18

 

 

 

 

—

 

 

 

 

20,988

 

Technology Products and Services Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System Sales

 

 

7,973

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

7,973

 

System Rentals

 

 

—

 

 

 

 

—

 

 

 

 

12,643

 

 

 

 

—

 

 

 

 

12,643

 

Maintenance

 

 

—

 

 

 

 

14,942

 

 

 

 

—

 

 

 

 

—

 

 

 

 

14,942

 

Finance Income

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

2,305

 

 

 

 

2,305

 

 

 

 

7,973

 

 

 

 

14,942

 

 

 

 

12,643

 

 

 

 

2,305

 

 

 

 

37,863

 

Sub-total for reportable segments

 

 

7,973

 

 

 

 

35,912

 

 

 

 

12,661

 

 

 

 

2,305

 

 

 

 

58,851

 

All Other

 

 

1,003

 

 

 

 

182

 

 

 

 

—

 

 

 

 

—

 

 

 

 

1,185

 

Total

$

 

8,976

 

 

$

 

36,094

 

 

$

 

12,661

 

 

$

 

2,305

 

 

$

 

60,036

 

For the three months ended March 31, 2023, revenues earned from Technology Sales includes variable consideration of $5.6 million (2022 — $0.4 million). Variable consideration revenues represent an estimate of the contingent fees that may become due if certain annual minimum box office receipt thresholds are exceeded and are recorded as revenue in the period when the sale is recognized and may be adjusted in future periods based on actual results and changes in estimates over the term of the system agreement.

For the three months ended March 31, 2023, revenues earned from leasing arrangements total $22.4 million (2022 — $13.6 million), including $20.1 million in Revenues ― Technology Rentals (2022 — $12.6 million), and $2.3 million in Revenues ― Technology Sales (2022 — $1.0 million).

(b)
Deferred Revenue

IMAX System sale and lease arrangements include a requirement for the Company to provide maintenance services over the life of the arrangement, some of which are subject to a consumer price index adjustment each year. In circumstances where customers prepay the entire term’s maintenance fee based on the original arrangement, additional payments are due to the Company for the years after its extended warranty and maintenance obligations expire. Payments, upon renewal each year, are either prepaid or made in arrears and can vary in frequency from monthly to annually. As of March 31, 2023, $22.2 million of consideration has been deferred in relation to outstanding maintenance services to be provided on existing maintenance contracts (December 31, 2022 — $21.0 million). Maintenance revenue is recognized evenly over the contract term which coincides with the period over which maintenance services are provided. In the event of customer default, any payments made by the customer may be retained by the Company.

In instances where the Company receives consideration prior to satisfying its performance obligations, the recognition of revenue is deferred. The majority of the deferred revenue balance relates to payments received by the Company for IMAX Systems where control of the system has not yet transferred to the customer. The deferred revenue balance related to an individual IMAX System increases as progress payments are made and is then derecognized when control of the system is transferred to the customer. Recognition dates are variable and depend on numerous factors, including some outside of the Company’s control.