Philip Morris International (PM) Q4 2025 earnings summary

Executive summary

• Achieved fifth consecutive year of positive volume growth, with net revenues surpassing $40 billion and smoke-free products contributing 41.5% of total net revenues in 2025, driven by strong performance in smoke-free and combustibles despite industry declines and supply chain issues.

• Smoke-free product volumes grew 12.8% year-over-year, with IQOS as the main driver, significant contributions from ZYN and VEEV, and over 43 million adult consumers globally; smoke-free products now available in 106 markets.

• Adjusted diluted EPS grew 15% in dollar terms, reaching $7.54, the strongest since 2011 (excluding 2021), with currency-neutral growth of 14% and reported diluted EPS at $7.26.

• Smoke-free products accounted for over 50% of net revenues in 27 markets and in 3 of 4 regions in Q4 2025.

• Provided 2026–2028 growth targets, aiming for continued strong performance and sustainable shareholder value.

Financial highlights

• Full-year 2025 net revenues reached $40.6 billion, up 7.3% reported and 6.5% organically from 2024, with organic net revenue growth at 7.9% excluding Indonesia impact.

• Adjusted operating income margin reached 40.4%, with adjusted operating income at $16.4 billion and gross profit at $27.3 billion, up 11.1% year-over-year.

• Adjusted diluted EPS of $7.54, up 14.8% from 2024, at the high end of guidance, despite a $0.04 currency tailwind shortfall.

• Operating cash flow matched the prior year at $12.2 billion.

• Q4 2025 net revenues were $10.4 billion, up 6.8% reported and 3.7% organically year-over-year.

Outlook and guidance

• 2026 organic net revenue growth forecast at 5%-7%; organic operating income growth at 7%-9%; adjusted diluted EPS forecasted at $8.38–$8.53, representing 11.1%–13.1% growth over 2025.

• Currency-neutral adjusted diluted EPS growth projected at 7.5%-9.5%; including currency, EPS expected to grow 11.3%-13.3%.

• Operating cash flow for 2026 projected at approximately $13.5 billion.

• Medium-term (2026-2028) targets: 6%-8% CAGR in organic net revenues, 8%-10% in operating income, 9%-11% in adjusted diluted EPS.

• Capital expenditures projected at $1.4–$1.6 billion in 2026, with net debt to adjusted EBITDA targeted near 2.0x by year-end.