Original-Research: Reply SpA – from Quirin Privatbank Kapitalmarktgeschäft
20.11.2025 / 16:07 CET/CEST
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Classification of Quirin Privatbank Kapitalmarktgeschäft to Reply SpA
Company Name:Reply SpAISIN:IT0005282865 Reason for the research:UpdateRecommendation:Buyfrom:20.11.2025Target price:178Last 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
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