Core Insights - Philip Morris reported $10.36 billion in revenue for Q4 2025, a 6.8% year-over-year increase, with an EPS of $1.70 compared to $1.55 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $10.43 billion by 0.63%, while the EPS exceeded the consensus estimate of $1.67 by 2.04% [1] Financial Performance - The company’s stock has returned +14.6% over the past month, outperforming the Zacks S&P 500 composite, which declined by -1.5% [3] - Philip Morris holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3] Shipment Volumes - Total shipment volume for cigarettes and heated tobacco units (HTUs) was 38.4 billion, exceeding the average estimate of 37.97 billion [4] - In Europe, cigarette shipment volume reached 36.89 billion, surpassing the estimated 36.01 billion [4] - Total shipment volume in Europe was 53.18 billion, compared to the average estimate of 51.98 billion [4] - In the Americas, total shipment volume was 16.87 billion, above the estimated 16.47 billion [4] Geographic Revenue Breakdown - Net revenues in the Americas were $1.23 billion, slightly below the $1.3 billion estimate, reflecting a -2.5% year-over-year change [4] - Net revenues from EA, AU & PMI DF were $1.43 billion, compared to the estimated $1.45 billion, marking a -0.6% change year-over-year [4] - Net revenues from SSEA, CIS & MEA were $3.11 billion, slightly below the estimate of $3.12 billion, with an 8.4% year-over-year increase [4] - European net revenues reached $4.6 billion, exceeding the estimate of $4.59 billion, with a 13.4% year-over-year increase [4] Smoke-Free and Combustible Tobacco Revenues - Smoke-free revenues excluding W&H in Europe were $2.26 billion, below the estimate of $2.32 billion, but showed a 17.2% year-over-year increase [4] - Smoke-free revenues excluding W&H in SSEA, CIS & MEA were $546 million, slightly above the estimate of $540.69 million, with a 33.2% year-over-year increase [4] - Total smoke-free revenues excluding W&H were $4.35 billion, below the estimate of $4.39 billion, reflecting a 14.6% year-over-year increase [4] - Total revenues from combustible tobacco were $6.01 billion, below the estimate of $6.15 billion, with a year-over-year increase of 3.3% [4]

Financial Data and Key Metrics Changes - In 2025, total net revenues exceeded $40 billion, with 41.5% or nearly $17 billion generated from smoke-free products [9] - Adjusted diluted EPS grew by 15% in dollar terms, marking the strongest growth since 2011, excluding the pandemic recovery year of 2021 [7] - Organic top-line growth was reported at 6.5%, with adjusted operating income growth at 10.6%, reflecting a 140 basis points organic margin expansion [12][19] - Adjusted diluted EPS reached $7.54, at the high end of guidance, with currency-neutral adjusted diluted EPS growth of 14.2% [14] Business Line Data and Key Metrics Changes - Smoke-free product volumes grew by 12.8%, with IQOS shipments increasing by 11% [4][15] - The nicotine pouch category, particularly ZYN, saw a 37% increase in shipments in the U.S., contributing significantly to growth [7][24] - Combustibles delivered low single-digit growth, with Marlboro achieving a historic high market share [7][36] Market Data and Key Metrics Changes - The international business generated the majority of total PMI organic net revenue growth, with smoke-free products leading the way [7] - In Japan, the heat-not-burn category surpassed 50% of total industry volumes, driven by IQOS [10][28] - The U.S. market for nicotine pouches is rapidly growing, with ZYN capturing around 50% of category growth [32] Company Strategy and Development Direction - PMI is focused on leading the transition to smoke-free products, with a multi-category strategy enhancing consumer offerings [5][10] - The company aims to achieve a leverage ratio close to 2x by the end of 2026, supporting strong returns to shareholders [8] - Continued investment in innovation and digitalization is planned to sustain growth and market leadership [10][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth despite transitory headwinds, with a forecast of 5%-7% organic net revenue growth for 2026 [38] - The competitive landscape is evolving, particularly in Japan, but IQOS is expected to maintain its strong market position [62] - The company anticipates significant growth opportunities in the U.S. and other international markets, supported by new product launches [31][43] Other Important Information - PMI's smoke-free gross profit contribution has doubled in five years to 43% of total PMI [9] - The company has delivered around $1.5 billion in gross cost savings since 2024, on track to achieve a $2 billion objective for 2024-2026 [20] - The number of legal-age consumers of PMI's smoke-free products reached approximately 43.5 million, an increase of around 10 million users in two years [22] Q&A Session Summary Question: Can you expand on the reacceleration in smoke-free volume growth compared to the 2026 growth guidance? - Management indicated that the acceleration is expected due to tax changes in Japan and competitive portfolio adjustments in the U.S. [51][52] Question: How are you thinking in terms of IQOS, HTU shipments, and IMS for 2026? - Management noted that while Japan faces challenges, other markets like Italy and Germany are showing strong growth, contributing positively to the overall outlook for IQOS [60][63] Question: What are the key growth drivers for the upcoming year? - Management highlighted the importance of FDA approvals for new products like ZYN Ultra and the ongoing growth of IQOS and VEEV in international markets [75]

Financial Data and Key Metrics Changes - In 2025, total net revenues exceeded $40 billion, with 41.5% or nearly $17 billion generated from smoke-free products [8][12] - Adjusted diluted EPS grew by 15% in dollar terms, marking the strongest growth since 2011, excluding the pandemic recovery year of 2021 [6][12] - Organic top-line growth was reported at 6.5%, with a currency-neutral adjusted diluted EPS growth of 14.2% [11][12] - Adjusted operating income grew by 11.8% to $16.4 billion, with an organic operating income growth of 10.6% [11][12] Business Line Data and Key Metrics Changes - Smoke-free product volumes grew by 12.8%, with IQOS shipments increasing by 11% [3][14] - The nicotine pouch category, represented by ZYN, saw a shipment growth of 37% in the U.S. [5][14] - Combustibles delivered robust performance despite a 1.5% decline in cigarette shipments, with Marlboro reaching a historic high share [6][14] Market Data and Key Metrics Changes - The international business generated the majority of total PMI organic net revenue growth, particularly from smoke-free products [5][6] - In Japan, the heat-not-burn category surpassed 50% of total industry offtake volumes, driven by IQOS [25][26] - The U.S. market for nicotine pouches is rapidly growing, with ZYN capturing around 50% of category growth [29][30] Company Strategy and Development Direction - PMI continues to lead the shift towards smoke-free alternatives, with a multi-category strategy enhancing consumer adoption [3][9] - The company aims to achieve a leverage ratio close to 2x by the end of 2026, supporting strong returns to shareholders [7][42] - A focus on innovation and digitalization is expected to drive future growth, with a pipeline of initiatives planned for the next three years [9][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth despite transitory headwinds, with a forecast for 2026 organic net revenue growth of 5%-7% [36][39] - The competitive landscape in the U.S. and Japan is acknowledged, with expectations for continued strong performance in smoke-free products [35][36] - Management highlighted the importance of brand equity and innovation in driving future growth, particularly for ZYN and IQOS [31][32] Other Important Information - The company has achieved around $1.5 billion in gross cost savings since 2024, on track to meet a $2 billion objective for 2024-2026 [19][42] - The number of legal-age consumers of smoke-free products reached an estimated 43.5 million, reflecting broad-based growth across categories [20][21] - PMI's dividend payout ratio is now close to 75% of adjusted diluted EPS, allowing for potential dividend growth aligned with earnings growth [42][43] Q&A Session Summary Question: Can you expand on the reacceleration in smoke-free volume growth compared to the 2026 growth guidance? - Management indicated that the acceleration is expected due to tax changes in Japan and competitive dynamics in the U.S. [48][50] Question: How are you thinking in terms of IQOS, HTU shipments, and IMS for 2026? - Management noted that while Japan faces challenges, other markets like Italy and Germany are showing strong growth, contributing positively to IQOS's outlook [57][61] Question: What are the key growth drivers for the upcoming year? - Management highlighted the importance of ZYN's pending applications with the FDA and the overall growth of smoke-free products as key drivers for 2026 [72][74]

Financial Data and Key Metrics Changes - In 2025, total net revenues exceeded $40 billion, with 41.5% or nearly $17 billion generated from smoke-free products [8][11] - Adjusted diluted EPS grew by 15% in dollar terms, marking the strongest growth since 2011, excluding the pandemic recovery year of 2021 [5][11] - Organic top-line growth was +6.5%, with adjusted operating income growth at +10.6%, reflecting +140 basis points of organic margin expansion [11][12] Business Line Data and Key Metrics Changes - Smoke-free product volumes grew by 12.8%, with organic smoke-free gross profit growth of 18.7% [3][12] - IQOS shipments grew by approximately 11%, with a notable acceleration in the fourth quarter [3][15] - ZYN shipments in the U.S. increased by 37%, contributing significantly to smoke-free product growth [5][14] Market Data and Key Metrics Changes - The international business generated the majority of total PMI organic net revenue growth, with smoke-free products leading the way [5][19] - In Japan, the heat-not-burn category surpassed 50% of total industry volumes, driven by IQOS [25][26] - The U.S. market for nicotine pouches saw ZYN capturing around 50% of category growth, with a volume share of 61.5% [30][22] Company Strategy and Development Direction - The company continues to focus on a multi-category strategy, expanding its smoke-free product offerings and geographic reach [4][9] - There is a strong emphasis on innovation and digitalization to support long-term growth [9][43] - The company targets a leverage ratio of close to 2x by the end of 2026, indicating a focus on financial flexibility and shareholder returns [7][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth despite transitory headwinds, with a forecast of 5%-7% organic net revenue growth for 2026 [36][37] - The company anticipates continued strong cash generation, with operating cash flow projected at around $13.5 billion [38][43] - Management highlighted the importance of navigating regulatory environments and enhancing brand equity for future growth [32][33] Other Important Information - The company achieved a historic high share for Marlboro, reaching 11% of the international category, excluding China [34][5] - The number of legal-age consumers of smoke-free products reached an estimated 43.5 million, reflecting broad-based growth across categories [20][19] - The company is committed to delivering superior shareholder value, with a target dividend payout ratio of around 75% of adjusted diluted EPS [44][45] Q&A Session Summary Question: Can you expand on the reacceleration in smoke-free volume growth compared to the 2026 growth guidance? - Management indicated that the acceleration is expected due to tax changes in Japan and competitive dynamics in the U.S. market [49][50] Question: How are you thinking in terms of IQOS, HTU shipments, and IMS for 2026? - Management noted that while Japan faces challenges, other markets like Italy and Germany are showing strong growth, contributing positively to IQOS's outlook [58][62] Question: What are the key growth drivers for the upcoming year? - Management emphasized the importance of ZYN and IQOS, along with ongoing investments in marketing and innovation, as key drivers for growth [72][75]

分组1 - Philip Morris reported quarterly earnings of $1.7 per share, exceeding the Zacks Consensus Estimate of $1.67 per share, and showing an increase from $1.55 per share a year ago, resulting in an earnings surprise of +2.04% [1] - The company posted revenues of $10.36 billion for the quarter ended December 2025, which was 0.63% below the Zacks Consensus Estimate, but an increase from $9.71 billion year-over-year [2] - Philip Morris has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates twice during the same period [2] 分组2 - The stock has increased approximately 13.5% since the beginning of the year, while the S&P 500 has declined by 0.7% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for future stock performance [4] - The current consensus EPS estimate for the upcoming quarter is $1.88 on revenues of $10.15 billion, and for the current fiscal year, it is $8.34 on revenues of $44.09 billion [7] 分组3 - The Zacks Industry Rank indicates that the Tobacco industry is currently in the bottom 36% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Turning Point Brands, another company in the Tobacco industry, is expected to report quarterly earnings of $0.87 per share, reflecting a year-over-year increase of +64.2% [9]

2025 Fourth-Quarter and Full-Year Results February 6, 2026 Introduction • A glossary of terms as well as adjustments, other calculations and reconciliations to the most directly comparable U.S. GAAP measures for non-GAAP financial measures cited in this presentation are available in Exhibit 99.2 to the company's Form 8-K dated February 6, 2026 and on our Investor Relations website with additional non- GAAP reconciliations available at the end of this presentation 2 Forward-Looking and Cautionary Statements ...

Group 1 - The company reported higher profit and revenue in the fourth quarter [1] - The company forecasts continued growth for years to come [1]

The cigarette and Zyn nicotine pouch maker reports softer-than-expected revenue, dragging down shares. ...

Investment in Smoke-Free Products - Philip Morris International (PMI) has invested over $16 billion since 2008 to develop smoke-free products, aiming to end cigarette sales entirely[12] - PMI's smoke-free products were available in 106 markets as of December 31, 2025, with modern oral pouches present in 56 markets[18] - The company plans to expand into wellness areas through its Aspeya unit, focusing on oral consumer wellness offerings, including cannabinoid products[13] Shipment and Market Performance - In 2025, PMI's total shipment volume reached 786.5 billion equivalent units, with smoke-free products (SFPs) accounting for 179.1 billion units, a 12.8% increase from 2024[24] - The market share for PMI's total international market was 29.2% in 2025, up from 29.0% in 2024, with cigarette market share at 23.4%[29] - Marlboro accounted for approximately 43% of PMI's total cigarette shipment volume in 2025, with the top five international brands contributing 81% of total shipment volume[19][20] - PMI's e-vapor products saw a 100% increase in shipment volume in 2025, reaching 3.3 billion equivalent units[24] Organizational Structure and Employment - PMI's organizational model evolved in 2026 to enhance agility, transitioning to three reportable segments: International Smoke-Free, International Combustibles, and U.S.[23] - As of December 31, 2025, the company employed approximately 84,900 people worldwide, including full-time, temporary, and part-time staff[42] Sourcing and Supply Chain - Direct sourcing from farmers represented approximately 23% of PMI's global leaf requirements in 2025, with significant supplies sourced from countries like Argentina and Brazil[34] Regulatory Environment - The company is subject to multiple laws and regulations in its heavily regulated industry, impacting its operational strategies[48] - The regulatory landscape related to environmental matters is evolving, and the company is implementing initiatives aligned with its sustainability strategy[49] - The company does not expect expenditures related to environmental compliance to have a material adverse effect on its financial position or operations[51] Innovation and Intellectual Property - The company has a large number of granted patents and pending patent applications worldwide, which are material to its business[55] - An agreement reached in 2022 with PM USA relates to IQOS commercialization rights in the U.S., impacting its product offerings[57] Sales and Revenue - In 2025, sales to a distributor in the Europe Region and a distributor in the EA, AU & PMI GTR Region each accounted for 10% or more of consolidated net revenues[41] Market Dynamics - The company typically experiences higher adult user growth in the first half of each year due to seasonal influences[61] - The company operates in approximately 170 markets and reflects the demographics of the countries and communities it serves, enhancing innovation and consumer-centric approaches[45] Employer Reputation - The company has maintained its global EQUAL-SALARY certification, which is a significant aspect of its reputation as an employer[47]

Financial Performance - Total net revenues for 2025 reached $30 billion, representing a 5% organic growth year-over-year[6] - Total PMI revenues for 2025 were $40,648 million, representing a 7.3% increase from $37,878 million in 2024[25] - The company reported a significant increase in Net Earnings for 2025, totaling $11,848 million, up 57.9% from $7,503 million in 2024[64] - Net earnings attributable to PMI for 2025 reached $2,141 million, compared to a loss of $(579) million in 2024, resulting in a net earnings for basic and diluted EPS of $11,316 million in 2025, up from $7,034 million in 2024[17] - Basic Earnings Per Share for 2025 was $7.27, a 60.5% increase from $4.53 in 2024[64] - 2025 diluted EPS increased to $1.37, a 100% change from $(0.38) in 2024, with a yearly increase to $7.26 from $4.52, representing a 60.6% growth[19] Revenue Breakdown - Total smoke-free net revenues for 2025 were $4,354 million, a 12.0% increase from $3,887 million in 2024, with significant growth in SSEA, CIS & MEA at 33.2%[22] - Total net revenues for combustible tobacco reached $23,794 million in 2025, a 2.5% increase from $23,218 million in 2024[25] - Total net revenues for smoke-free products amounted to $16,854 million in 2025, reflecting a 15.0% growth compared to $14,660 million in 2024[25] - Total combustible tobacco net revenues for 2025 were $6,008 million, a 3.2% increase from $5,819 million in 2024, with Europe showing a 6.5% growth[22] Operating Income and Margins - The adjusted operating income margin for 2025 was 40%, up from 38% in 2024, indicating improved operational efficiency[6] - Total reported operating income for 2025 was $14,892 million, an increase of 11.1% compared to $13,402 million in 2024[53] - Adjusted operating income for 2025 reached $3,129 million, reflecting an 8.6% increase year-over-year[56] - Adjusted operating income excluding currency and acquisitions/divestitures for the total PMI was $16,243 million, an increase of 10.6% from $14,688 million in 2024[53] Product Performance - The number of total IQOS users increased to 20 million, with a 15% growth in user adoption compared to 2024[11] - PMI's e-Vapor product line saw a 25% increase in sales volume, contributing significantly to overall revenue growth[12] - The wellness segment within smoke-free products saw a decline of 17.2% in net revenues, dropping to $72 million from $87 million in 2024[22] - The company plans to launch three new smoke-free products in 2026, aiming to capture an additional 5% market share in the smoke-free segment[9] Debt and Financial Position - The company reported a net debt of $15 billion, with a debt-to-equity ratio of 1.2, indicating a stable financial position[6] - Total Debt as of December 31, 2025, was $48,835 million, up from $45,695 million in 2024[70] - Net Debt at the end of 2025 was $43,963 million, an increase from $41,479 million in 2024[70] Future Outlook - The company anticipates adjusted earnings per share (EPS) to grow by 8% in 2026, driven by continued expansion in smoke-free product offerings[8] - The company plans to continue expanding its smoke-free product offerings, with a focus on increasing market share in emerging markets[22] - The company anticipates continued growth in smoke-free product revenues, driven by increased market penetration and product innovation[25] Regional Performance - The SSEA, CIS & MEA region reported a significant operating income increase of 19.5%, reaching $4,096 million in 2025 compared to $3,429 million in 2024[36] - In Europe, reported operating income for 2025 was $7,165 million, up 9.4% from $6,547 million in 2024[53] - The Americas region saw a decline in operating income, dropping to $505 million in 2025, a decrease of 7.8% from $548 million in 2024[36] Adjusted Financial Metrics - Adjusted EBITDA for 2025 was $17,375 million, compared to $15,580 million in 2024, indicating a strong growth trajectory[70] - Adjusted gross profit for smoke-free products increased by 19.9% to $11,688 million in 2025, compared to $9,719 million in 2024[33] - Total adjusted gross profit for PMI in 2025 was $27,282 million, an 11.0% increase from $24,549 million in 2024[33]