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Segment Reporting
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting

13. Segment Reporting

 

The Company’s Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker (“CODM”), as such term is defined under U.S. GAAP. The CODM assesses segment performance based on segment revenues and segment gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense, and income tax (expense) benefit are not allocated to the Company’s segments.

In the first quarter of 2023, the Company revised its internal segment reporting, including the information provided to the CODM to assess segment performance and allocate resources. Accordingly, the Company has two reportable segments: (i) Content Solutions, which principally includes content enhancement and distribution services, previously included within the IMAX DMR, Film Distribution and Film Post-Production segments, and (ii) Technology Products and Services, which principally includes the sale, lease, and maintenance of IMAX Systems, previously included within the JRSA, IMAX Systems, IMAX Maintenance, and Other Theater Business segments. The Company’s activities that do not meet the criteria to be considered a reportable segment are reported within All Other. Prior period comparatives have been revised to conform with the current period presentation.

The Company has the following reportable segments:

 

(i)
Content Solutions, which principally includes the digital remastering of films and other content into IMAX formats for distribution to the IMAX network. To a lesser extent, the Content Solutions segment also earns revenue from the distribution of large-format documentary films and exclusive experiences ranging from live performances to interactive events with leading artists and creators, as well as film post-production services.

 

(ii)
Technology Products and Services, which includes results from the sale or lease of IMAX Systems, as well as from the maintenance of IMAX Systems. To a lesser extent, the Technology Product and Services segment also earns revenue from certain ancillary theater business activities, including after-market sales of IMAX System parts and 3D glasses.

The following table presents the Company’s revenue and gross margin by reportable segment for the three months ended June 30, 2023 and 2022:

 

 

Revenue(1)

 

 

Gross Margin

 

(In thousands of U.S. Dollars)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Content Solutions

 

$

31,290

 

 

$

29,544

 

 

$

19,996

 

 

$

17,354

 

Technology Products and Services

 

 

63,976

 

 

 

42,857

 

 

 

36,411

 

 

 

25,709

 

Sub-total for reportable segments

 

 

95,266

 

 

 

72,401

 

 

 

56,407

 

 

 

43,063

 

All Other(2)

 

 

2,713

 

 

 

1,567

 

 

 

1,480

 

 

 

973

 

Total

 

$

97,979

 

 

$

73,968

 

 

$

57,887

 

 

$

44,036

 

The following table presents the Company’s revenue and gross margin by reportable segment for the six months ended June 30, 2023 and 2022:

 

 

Revenue(1)

 

 

Gross Margin

 

(In thousands of U.S. Dollars)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Content Solutions

 

$

63,391

 

 

$

50,532

 

 

$

37,991

 

 

$

29,979

 

Technology Products and Services

 

 

115,643

 

 

 

80,720

 

 

 

66,302

 

 

 

44,125

 

Sub-total for reportable segments

 

 

179,034

 

 

 

131,252

 

 

 

104,293

 

 

 

74,104

 

All Other(2)

 

 

5,891

 

 

 

2,752

 

 

 

3,645

 

 

 

1,703

 

Total

 

$

184,925

 

 

$

134,004

 

 

$

107,938

 

 

$

75,807

 

 

(1)
The Company’s largest customer represents 11% and 8% of total Revenues for the three and six months ended June 30, 2023, respectively (2022 — 17% and 15%, respectively). No single customer comprises more than 10% of the Company’s total Accounts Receivable as of June 30, 2023 and December 31, 2022.
(2)
All Other includes the results from IMAX Enhanced, SSIMWAVE, and other ancillary activities.

Geographic Information

Revenue by geographic area is based on the location of the customer. Revenue related to IMAX film remastering and distribution is presented based upon the geographic location of the IMAX System that exhibits the remastered films. IMAX film remastering and distribution revenue is generated through contractual relationships with studios and other third parties and these may not be in the same geographical location as the IMAX System.

The following table summarizes the Company’s revenues by geographic area for the three months ended June 30, 2023 and 2022:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(In thousands of U.S. Dollars)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

United States

 

$

32,799

 

 

$

33,646

 

 

$

59,552

 

 

$

52,713

 

Greater China

 

 

19,112

 

 

 

11,237

 

 

 

45,678

 

 

 

32,713

 

Western Europe

 

 

19,810

 

 

 

10,701

 

 

 

29,978

 

 

 

17,762

 

Asia (excluding China)

 

 

15,955

 

 

 

11,357

 

 

 

26,607

 

 

 

17,124

 

Canada

 

 

4,102

 

 

 

2,543

 

 

 

11,298

 

 

 

4,429

 

Latin America

 

 

2,833

 

 

 

1,968

 

 

 

4,436

 

 

 

3,740

 

Rest of the World

 

 

3,368

 

 

 

2,516

 

 

 

7,376

 

 

 

5,523

 

Total

 

$

97,979

 

 

$

73,968

 

 

$

184,925

 

 

$

134,004

 

United States and Greater China each comprises greater than 10% of the Company’s total revenues for the six months ended June 30, 2023 and 2022.