Philip Morris InternationalPM

is proving there’s still fire in Big Tobacco — just without the smoke. The maker of Marlboro cigarettes struck gold with Zyn, the tobacco-free nicotine pouch it acquired in 2022 for $16B. Since then, the smoke-free alternative has become a cultural phenomenon and financial windfall — paying dividends to shareholders and to a company seeking a new path forward.

The future is smokeless: Philip Morris still makes 60% of its revenue from old-fashioned cigarettes, but smokeless products like Zyn and its IQOS heated tobacco products — both seen as healthier and safer than its legacy products — are rising up. Zyn shipments reached nearly 165M cans in Q4 alone, representing a 42% YoY surge, while the business projects shipments between 780M to 820M cans in 2025 — a growth of up to 41%. Demand has become so aggressive that the firm has struggled to meet the booming demand, prompting periodic shortages. However, as production scales up, it seems to be turning a corner.

• In Q4,PM
  delivered $1.55 in earnings per share and a 2025 EPS forecast of $7.04 to $7.17, both surpassing analyst estimates.
• The company’s strength helped shares surge over 10% on Thursday, adding to a 59% rally over the past year.

Pouches of Controversy

Part of Zyn’s surprise boom is its viral fame — which has seen “Zynfluencers” promote its value as a productivity drug, a healthier substitute for other nicotine products, or its pertinence in certain subcultures. However, its unpaid social media success is a potentially thorny challenge for Philip Morris — after all, they don’t want a repeat of Altria’sMO

Juul acquisition, which saw regulators pick apart the acquisition on the basis that it targeted youth. However, the Zyn has an edge — regulators admit it’s different.

• The FDA recently observed that Zyn contains “substantially lower” amounts of harmful constituents than cigarettes and most smokeless tobacco products.
• As a result, the regulator recently authorized 20 different products, including flavors like cinnamon, citrus, and cool mint, but emphasizes that these are not “safe” or “FDA approved.”

Smoke signals ahead: Part of its regulatory appeal is why Philip Morris remains optimistic that smoke-free products will help the company derive two-thirds of its revenue by 2030. However, as the organization faces strict marketing guidelines and pushback from groups like Campaign for Tobacco-Free Kids, it has to continue to toe a fine line. After all, it still is a sin product — even if Philip Morris’ new alternatives are less harmful. Goldman Sachs analyst Bonnie Herzog sees a financial upside, noting that the firm’s embrace of smokeless products will lead to faster growth and higher profitability. However, Yale School of Medicine researcher Meghan Morean cautions that while the harm reduction approach is positive, “nicotine itself is not completely without risk.”