PMI smoke-free business drives record profits as nicotine pouch and vapour sales surge
October 21, 2025
Smoke-free products of Philip Morris International
Philip Morris International (PMI) has reported record third-quarter performance for its smoke-free portfolio, which now accounts for over 40 per cent of the company’s global revenues, driven by strong growth in nicotine pouches, vapour products, and heat-not-burn devices.
The company said its smoke-free business generated 41 per cent of total net revenues and over 42 per cent of gross profit in Q3 2025, with shipment volumes rising 16.6 per cent year on year and net revenues up 17.7 per cent.
Adjusted diluted EPS grew 17.3 per cent to $2.24, prompting PMI to raise its full-year earnings forecast.
“Our global smoke-free portfolio is outgrowing the industry by a clear margin, driving positive total volumes, strong top-line growth and impressive margin expansion,” PMI’s Chief Executive Officer Jacek Olczak said. “We are on track to exceed our industry-leading 2024-26 growth targets.”
Heat-not-burn growth led by IQOS
IQOS continues to be the second-largest nicotine brand globally in markets where it is present, gaining almost a percentage point of industry share to reach 9.1 per cent of combined cigarette and heated tobacco unit volumes. In Europe, adjusted in-market sales grew 7.3 per cent to a record 15 billion units, with strong growth across Italy, Spain, Greece and Romania.
PMI said it is expanding its IQOS ILUMA i platform while launching new consumable ranges, DELIA and LEVIA, to appeal to adult smokers and vapers. In Japan, where competition has intensified, IQOS held its leading share in the heat-not-burn category, now representing over 50 per cent of total nicotine offtake in 14 major cities.
ZYN nicotine pouches maintain global leadership
The company’s oral nicotine brand ZYN continues to power category growth in the US and beyond. ZYN’s offtake rose 39 per cent in the US, supported by renewed marketing and wider availability following earlier supply constraints. PMI said international sales of nicotine pouches more than doubled outside the US and Nordics, with strong performance in the UK, Poland, Pakistan and South Africa.
ZYN is now available in 46 international markets, with PMI positioning the brand as a core driver of its transition away from combustibles.
VEEV e-vapour gains momentum
In the e-vapour category, PMI’s VEEV brand recorded 91 per cent shipment growth, securing top-three positions in 15 markets and number-one status in eight. VEEV is now sold in 46 markets, with growth led by Europe and Indonesia. PMI said the brand increasingly attracts adult nicotine users new to IQOS, reflecting its strategy of category diversification within smoke-free products.
Forecast and strategic outlook
PMI now expects full-year adjusted diluted EPS of $7.46–$7.56, up 13.5–15.1 per cent on 2024, and forecasts smoke-free shipment growth of 12–14 per cent for 2025. Almost all of the company’s $1.6 billion in planned capital expenditure this year will support the expansion of smoke-free manufacturing capacity.
From January 2026, PMI will reorganise operations into three business units: International Smoke-Free, International Combustibles, and U.S., reflecting its strategic pivot towards non-combustible products.
