Smoke-free momentum drives another strong quarter for Philip Morris (PM) in Q3 2025

Shares of Philip Morris International Inc. (NYSE: PM) were down 6% on Tuesday, despite the company delivering better-than-expected results for the third quarter of 2025 and raising its earnings outlook for the full year. The smoke-free business continued its momentum while the combustibles business remained resilient.

Results beat estimates

In the third quarter of 2025, Philip Morris’ net revenues increased 9% year-over-year to $10.8 billion, beating estimates of $10.6 billion. Organic revenue growth was 5.9%. On a reported basis, earnings per share increased 13% to $2.23. Adjusted EPS rose 17% YoY to $2.24, exceeding expectations of $2.10.  

Smoke-free growth and cigarette declines

PM’s smoke-free business continued its momentum with double-digit growth in revenue, shipments, and gross profits. In Q3, revenue grew 17.7%, shipment volumes grew 16.6%, and gross profit increased 19.5%. The company’s smoke-free products are now available in 100 markets and the business accounted for 41% of total revenue.

The growth in smoke-free was led by IQOS, ZYN and VEEV. IQOS continues to boost its position as the second largest nicotine brand in markets where it is present. In Q3, heated tobacco unit (HTU) shipments grew 15.5% with adjusted in-market sales (IMS) growth of 9%. The brand continues to see strong growth in Europe, Japan and other regions such as Cairo, Seoul and Jakarta.

In the e-vapor category, shipment volumes grew 91%. VEEV continues to see strong growth and is now available in 46 markets. Shipment volume in oral smoke-free products rose by 16.9%, driven by nicotine pouches which saw a 37% growth in the US. ZYN’s offtake growth accelerated to 39% in the US in Q3.

In the combustibles business, revenues grew 4.3%, driven by high-single-digit pricing. Cigarettes volume continued to decline with a 3.2% drop in Q3. The Marlboro brand reached 10.9% category share.

Raised outlook

Philip Morris raised its earnings outlook for the full year of 2025. The company now expects reported EPS to range between $7.39-7.49 versus the prior range of $7.24-7.37. Adjusted EPS is now projected to be $7.46-7.56 versus the previous expectation of $7.43-7.56. PM continues to expect organic revenue growth of 6-8% for the year.