Original-Research: Reply SpA (von Quirin Privatbank Kapitalmarktgeschäft): Buy

Classification of Quirin Privatbank Kapitalmarktgeschäft to Reply SpA

Company Name:	Reply SpA
ISIN:	IT0005282865
Reason for the research:	Update
Recommendation:	Buy
from:	20.11.2025
Target price:	178
Last rating change:
Analyst:	Sebastian Droste

Vertical AI solutions drive strong sales On November 17, 2025, Reply released its 9M 2025 financial results. Revenue growth was strong (+9.0% yoy) and in line with our expectation. Growth was driven by continued demand for AI and agentic architectures, the scaling of vertical solutions such as HR, procurement, payments and customer service, expanding mission-critical cloud and defense projects, stronger contributions from Region 1 and Region 3, solid performance in technology and application businesses, and incremental support from funded R&D projects and small M&A. Weakness in automotive and agency-related activities remained a headwind, and process-related business declined, limiting even stronger momentum. The EBITDA margin improved and was in line with our estimate, supported by cost discipline, productivity gains, a favourable mix and a one-off insurance gain, while structurally weaker activities probably prevented further upside. Management expects stable demand for AI-driven and outcome-based services and a solid finish to the year, although the exceptionally strong Q4 of the prior year implies tougher yoy comparisons. Region 2 remains a challenge due to its exposure to weaker agency-driven business, while Regions 1 and 3 should stay supported by government, defense and infrastructure projects. In our view, Reply remains attractive given its strong positioning in high-demand AI architectures, diversified sector exposure and consistent margin profile. We leave our target price unchanged at EUR 178 and confirm our Buy recommendation. You can download the research here: REPLY_SPA_20251120 For additional information visit our website: https://research.quirinprivatbank.de/ Contact for questions: Quirin Privatbank AG Institutionelles Research Schillerstraße 20 60313 Frankfurt am Main research@quirinprivatbank.de https://research.quirinprivatbank.de/