Philip Morris (PM) Q1 2025 Earnings Report

Summary of headline metrics and notable trend drivers:
- Revenue: $9.301 billion; YoY +5.8%; QoQ -4.2%; Organic net revenue up approximately +12% excluding Indonesia impact; total volume +3.9% YoY.
- Smoke-free performance: net revenue +20.4%; gross profit +33.1%; organic gross margin expansion +670 bps to >70%; ZYN shipments +53% YoY to 202 million cans; IQOS HTU IMS growth +9.4% (Q1); VEEV shipments more than doubled YoY.
- Margin and profitability: gross margin organic expansion +340 bps; adjusted operating income margin +250 bps; reported operating margin ~38.1%; net income $2.69B; net margin ~28.9%; EPS $1.72 (GAAP) vs. adjusted EPS growth in the call of $1.69 (adjusted).
- Cash flow and balance sheet: operating cash flow negative in Q1 (-$350M) driven by working capital dynamics; free cash flow negative (-$754M); cash and equivalents ~$4.44B; total debt ~$49.58B; net debt ~$45.14B; negative stockholders’ equity of -$10.91B on the balance sheet; interest coverage ~8.1x.
- Guidance and outlook: currency-neutral net revenue growth guided +6% to +8% for 2025; organic OI growth +10.5% to +12.5%; currency-neutral adjusted diluted EPS +10.5% to +12.5%; 2025 adjusted diluted EPS raised to $7.36-$7.49; ZYN U.S. shipments raised to 800–840 million cans; HTU IMS growth targeted at ~+10% in Q2 and +10–12% for the year.