Philip Morris International Reports 2025 Fourth-Quarter & Full-Year Results

"We achieved another remarkable year of results in 2025, with a fifth consecutive year of volume growth, net revenues surpassing $40 billion, including close to $17 billion from our smoke-free business, and very good operating margin expansion," said Jacek Olczak, Group CEO PMI.
"With excellent results in 2024 and 2025, we have delivered our three-year CAGR targets on operating income and EPS in just two years. With another strong performance expected in 2026, we are on track to outperform our 2024-2026 growth algorithm. This again demonstrates our ability to create sustainable value for our shareholders as we renew our growth targets for 2026-2028."

• Smoke-free business (SFB): Our smoke-free business delivered a strong performance, with full-year shipment volumes up by 12.8%, net revenues growing by 15.0% (14.1% organically) and gross profit increasing by 20.3% (18.7% organically). Our smoke-free business accounted for 41.5% of our total net revenues, and nearly 43% of total gross profit (up by 2.8pp and 3.2pp respectively vs. full-year 2024). Our smoke-free products (SFP) are now available in 106 markets, with over 43 million estimated adult consumers (up by around 4.5 million versus December 2024). In the fourth quarter, we delivered 12.0% net revenue growth (8.6% organically), 12.2% gross profit growth (8.3% organically) while achieving a key milestone with over 50% of net revenues generated by the smoke-free business in 3 of our 4 regions. On full-year basis, we reached the same milestone in 27 markets, including 8 markets where we exceeded 75%.
• Heat-not-burn SFP: IQOS continued to drive the growth of the global category, where PMI holds approximately 76% volume share. We strengthened the overall position of IQOS (gaining 1pp of the combined cigarette and HTU industry volumes in the fourth quarter to reach 9.6%) as the second largest nicotine ‘brand’ in markets where present, with the #1 volume share position in 13 markets. HTU adjusted in-market sales (IMS) volume growth, which excludes the net impact of estimated distributor and wholesaler inventory movements, accelerated to 12% in the fourth quarter and increased by an estimated 10.5% for the full-year, broadly in line with shipment growth.
  • In Japan, PMI HTU adjusted IMS grew by an estimated 7.0% for the full year and 5.8% in the fourth quarter. IQOS continues to hold close to 70% of heat-not-burn category volume, notwithstanding intensifying competition. IQOS HTU adjusted market share of total nicotine increased by 2.0pp to 32.6% in the fourth quarter. In December, the overall HTU category exceeded 50% of total nicotine offtake share at the national level, including 19 out of 20 major cities and 16 prefectures.
  • In Europe, with continuous brand equity investment and innovation, IQOS HTU adjusted IMS grew by an estimated 8.6% for the full year with an acceleration in the fourth quarter to 10.3% and IQOS HTU adjusted market share up by 1.5pp to 12.0%. Another year of dynamic adjusted IMS growth was led by Italy's return to double-digit performance, which was also delivered in many other markets, notably Germany, Greece, Romania and Spain.
  • Outside Europe and Japan, adjusted IMS grew strongly in the fourth quarter and offtake share increased in key cities across the globe, including Mexico City, Jakarta, Riyadh, Kuala Lumpur, Cairo and Manila. In Taiwan, the recent launch of IQOS delivered very promising early results.
• Oral SFP: Full-year shipment volume increased by 18.5% (up 7.3% in Q4) in pouch or pouch equivalents, fueled by nicotine pouches, which grew by nearly 37% in the U.S., and over 35% in international markets, despite some snus volume declines in the Nordics.
  • In the U.S., nicotine pouches account for a high single-digit percentage of total industry volumes and remain the fastest growing nicotine category. ZYN, with a premium price positioning, continued to lead the category with around two-thirds value share in 2025. Supported by a wide range of commercial activities to further enhance the equity and presence of the brand, ZYN shipment volume in the fourth quarter reached 196 million cans, an increase of over 19%, whilst offtake volume grew 23% as estimated by Nielsen. Full-year ZYN shipment volumes reached 794 million cans.
  • The international nicotine pouch business continues to expand, with ZYN now available in 55 markets and growth fueled by strong market share gains of this dynamically growing category. Our focus remains on switching legal-age smokers with a relevant product portfolio, including 1.5mg variants which are now available in around two thirds of ZYN markets.
• E-vapor SFP: VEEV continued to accelerate its increasingly profitable growth, and is now available in 47 markets. Shipment volumes more than doubled on a full-year basis, notably driven by Europe and Indonesia. Within the closed pods segment, VEEV holds the #1 volume share position in 8 markets, and is gaining significant market share, sourcing primarily from legal-age consumers of other vaping products and adult smokers. PMI remains committed to building and commercializing the brand in a focused, responsible and profitable manner.
• Combustibles: Notwithstanding expected lower volumes, full-year net revenues grew by 2.5% (1.8% organically) driven by strong pricing, partly offset by geographic mix. Together with productivity improvements, this resulted in gross profit growth of 5.2% (4.4% organically). In the fourth quarter net revenues grew by 3.2% (up 0.3% organically) with gross profit up by 5.5% (2.8% organically) and Marlboro reaching a record high 11.0% category share. Our overall cigarette category share was slightly lower for the full-year, predominantly due to Turkey.
• Dividend: Declaredregular quarterly dividend of $1.47 per share, or an annualized $5.88 per share.

Reported diluted EPS is forecast to be in a range of $7.87 to $8.02, at prevailing exchange rates, versus reported diluted EPS of $7.26 in 2025. Excluding a total 2026 adjustment of $0.51 per share, this forecast represents a projected increase of 11.1% to 13.1% versus adjusted diluted EPS of $7.54 in 2025. Also excluding a favorable currency impact of $0.27, at prevailing exchange rates, this forecast represents a projected increase of 7.5% to 9.5% versus adjusted diluted EPS of $7.54 in 2025, as outlined in the above table.

2026 Full-Year Forecast Assumptions

This forecast assumes:

• An estimated total international industry volume decline of around 2% for cigarettes and HTUs, excluding China and the U.S.;
• Broadly stable total PMI cigarette and SFP shipment volume, with high-single digit SFP shipment volume growth, and a cigarette shipment volume decline of around 3%, including the impact of weaker industry volume in India and Mexico, and the ongoing recovery of our business in Turkey;
• Net revenue growth of 5% to 7% on an organic basis;
• Organic operating income growth of 7% to 9%;
• Full-year amortization of acquired intangibles of $0.51 per share;
• Broadly stable net financing costs;
• An effective tax rate, excluding discrete tax events, of around 21.5%;
• Operating cash flow around $13.5 billion at prevailing exchange rates, subject to year-end working capital requirements;
• Capital expenditures of $1.4 to $1.6 billion, predominantly due to investments supporting the smoke-free business;
• Further net debt to adjusted EBITDA ratio improvement as we target a ratio of close to 2.0x by the end of 2026, at prevailing exchange rates;
• No share repurchases; and
• First quarter adjusted diluted EPS of $1.80 to $1.85, including an estimated favorable currency impact of 14 cents at prevailing exchange rates.

Factors described in the Forward-Looking and Cautionary Statements section of this release represent continuing risks to these projections.

Following strong full-year results in 2024 and 2025 coupled with another strong performance expected in 2026, we are on track to deliver at or above the top end of our 2024 to 2026 compound annual growth ranges announced on September 28th, 2023.

Today, the company provides 2026 to 2028 compound annual growth targets of:

– 6% to 8% for net revenues, on an organic basis, with SFP volume growth of high single-digit to low-teens driving total shipment volume growth;
– 8% to 10% for operating income, on an organic basis; and
– 9% to 11% for adjusted diluted EPS, excluding currency, assuming current corporate income tax rates and no share repurchases.

With our smoke-free business now operating at scale across our regions, including substantial growth from our U.S. business, PMI has implemented an evolved organizational model with two primary business units: International and U.S. The updated organizational structure is designed to enhance our agility and to support our journey to become a smoke-free company under the leadership of Jacek Olczak, Group CEO PMI. This change was implemented effective January 1, 2026, and as a result PMI realigned its reportable segments accordingly. The four geographic segments have been replaced with three new reportable segments: International Smoke-Free, International Combustibles, and U.S. As of the first quarter of 2026, our reporting will reflect these changes. The company plans to disclose select historical financial information for the 2023 to 2025 period based on the new reportable segments before the end of the first quarter.

A conference call hosted by Jacek Olczak, Group CEO PMI, and Emmanuel Babeau, Group Chief Financial Officer, will be webcast at 9:00 a.m., Eastern Time, on February 6, 2026. The webcast can be accessed here.