By Timothy S. Donahue

Top Takeaways:

• Strong quarter: PMI posts $10.1 billion in revenue, up 9.1%, driven by smoke-free growth
• Category shift: IQOS becomes the No. 1 heated tobacco “brand” in key markets
• Pipeline focus: Smoke-free products now account for 43% of total revenue for PMI

Philip Morris International opened 2026 with a strong first quarter, beating expectations as its smoke-free portfolio—led by IQOS—continued to reshape the company’s growth profile. “Our performance exceeded our expectations in the first quarter, with an outstanding delivery from IQOS driving very good growth for the group against a strong prior-year comparison,” said PMI CEO Jacek Olczak.

PMI reported net revenues of $10.1 billion, up 9.1% year over year, with contributions from both smoke-free and combustible segments. Smoke-free products generated 43% of total net revenues, reflecting a steady shift away from traditional cigarettes. “Building on excellent broad-based momentum in the international smoke-free business and 16% adjusted diluted EPS growth in Q1, we are well positioned to continue delivering best-in-class performance in 2026,” Olczak said.

At the center of that momentum is IQOS. The heat-not-burn platform not only drove double-digit growth in shipments and in-market sales but also reached a milestone—surpassing Marlboro to become the No. 1 nicotine “brand” in markets where it is present, with a 10.9% share of combined cigarette and heated tobacco unit volumes.

PMI said it now holds approximately 77% of the global heat-not-burn category by volume, underscoring its dominant position in one of the fastest-growing segments of the nicotine market. Growth was broad-based geographically.

In Japan, the company’s largest IQOS market, heated tobacco units accounted for about 53% of total nicotine consumption, with IQOS alone representing a record 34.9% share. Across Europe, IQOS volumes grew despite regulatory headwinds, including flavor restrictions in Poland and ongoing disruptions in Ukraine.

Outside those core regions, growth accelerated further, with strong performance in cities such as Mexico City, Jakarta, Riyadh, and Seoul, while Taiwan emerged as a standout new market. Beyond heated tobacco, PMI continues to build out its broader smoke-free portfolio.

VEEV, the company’s vapor brand, surpassed one billion quarterly unit shipments for the first time and now shares the No. 1 position in Europe’s closed pod category. Meanwhile, ZYN nicotine pouches expanded to 58 markets globally, though shipment volumes in the U.S. declined due to inventory adjustments, despite underlying demand growth.

The company said its strategy remains focused on converting adult smokers to its reduced-risk products. “Our focus remains on switching legal-age smokers with a relevant product portfolio,” PMI said, noting continued investment in reduced-risk alternatives and new product formats.

Combustibles, while still a major contributor, continue to decline in volume. Cigarette shipments fell 5.1% in the quarter, though pricing gains helped offset the drop, pushing net revenues in the segment higher. Marlboro, however, continued to gain share, reaching a record 10.7% global market share.

PMI also flagged external risks. The company said the Middle East conflict had a “small impact” on shipments in the quarter, particularly in travel retail and certain regional markets, and noted potential cost pressures from energy and logistics disruptions.

Looking ahead, PMI maintained a strong full-year outlook. The company expects adjusted diluted earnings per share to grow by roughly 10.9% to 12.9% in 2026, supported by continued expansion of its smoke-free business, which it expects to grow at a high-single-digit rate in volume terms.