Philip Morris International (PM) Q1 2025 earnings summary

Executive summary

• Achieved double-digit organic growth in net revenues, operating income, and adjusted diluted EPS for Q1 2025, driven by strong smoke-free product performance and resilient combustible volumes.

• Smoke-free products accounted for over 42% of net revenues, with shipment volumes up 14.4% year-over-year and organic net revenue growth exceeding 20%.

• ZYN shipments in the US rose 53% to 202 million cans, with IQOS and VEEV also posting robust growth.

• Net earnings attributable to PMI increased 25.2% year-over-year to $2.7B, with diluted EPS up 24.6% to $1.72; adjusted diluted EPS up 17.3% in constant currency.

• Smoke-free transformation continues to drive profitability, cash generation, and ongoing dividend growth.

Financial highlights

• Organic net revenues grew 10.2% year-over-year to $9.3B, with reported growth of 5.8% and shipment volume up 3.9%.

• Adjusted operating income increased 16% organically to $3.8B, with margin expansion to 40.7%.

• Gross profit margin reached 67.4%, with smoke-free gross margin surpassing 70%, over 5 points higher than combustibles.

• Diluted EPS was $1.72 (+24.6% YoY); adjusted diluted EPS $1.69 (+17.3% YoY excluding currency).

• Declared quarterly dividend of $1.35 per share, annualized at $5.40.

Outlook and guidance

• Raised 2025 adjusted diluted EPS forecast to $7.36–$7.49, reflecting 12%–14% growth in dollar terms.

• Organic net revenue growth projected at 6%–8%, organic operating income growth at 10.5%–12.5%.

• US ZYN shipment forecast raised to 800–840 million cans for the year.

• Operating cash flow expected to exceed $11B; capex around $1.5B, focused on smoke-free product capacity.

• Targeting net debt/EBITDA ratio of ~2x by end of 2026; no share repurchases planned for 2025.