Summary of QQ1 2026 performance highlights PMI delivered a solid start to 2026. Reported net revenues of $10.15 billion rose 9.1% year over year, aided by strong pricing and a favorable mix shift toward smoke-free products, particularly IQOS, ZYN and VEEV. Adjusted gross profit increased ~10% to $6.91 billion and adjusted operating income grew ~10% to $4.21 billion, supported by a currency tailwind and ongoing cost discipline. International smoke-free operations posted standout results with roughly 12% volume growth and high‑teens dollar revenue growth, helping to push gross margin expansion of about 210 basis points in the segment and contributing to an overall robust margin profile despite headwinds in the US and combustibles. Management reiterated confidence in full-year 2026 organic margin expansion and currency-neutral growth metrics, while guiding for continued smoke-free investments, innovation rollouts, and new product initiatives (e.g., ZYN Ultra, IQOS by IQOS Bonds). Net income declined modestly versus the prior year on a reported basis (net income of $2.44B, down ~9% YoY) reflecting base effects and higher profitability in prior-year periods, with quarterly uplift visible in a positive QoQ comparison of earnings per share. The company maintains a long-duration strategic pivot to smoke-free products as the core growth engine, supported by a strong balance sheet, resilient pricing power, and a disciplined approach to operating and manufacturing efficiency. Investors should monitor: (1) the trajectory of US nicotine pouch adoption and regulatory developments, (2) cigarette volumes and illicit trade dynamics, (3) operating cash flow conversion and working capital movements, and (4) the pace of international smoke-free expansion and margin capture across IQOS, ZYN and VEEV.