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

    ^
Original-Research: Reply - from Quirin Privatbank Kapitalmarktgeschäft

18.08.2025 / 13:47 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

---------------------------------------------------------------------------

Classification of Quirin Privatbank Kapitalmarktgeschäft to Reply

     Company Name:               Reply
     ISIN:                       IT0005282865

     Reason for the research:    Update
     Recommendation:             Buy
     from:                       18.08.2025
     Target price:               178
     Last rating change:
     Analyst:                    Sebastian Droste

Structural advantages result in strong resilience

On July 31, Reply released its Q2 2025 financial results. Revenue growth was
strong at +8.3% yoy to EUR 606.7m, in line with our expectation (+7.9% yoy).
Growth was driven by sustained demand in AI, data management and cloud,
strong momentum in region 3 (+22.9% yoy; UK-led and boosted by the Solirius
acquisition), and healthy expansion in region 1 (+6.4% yoy), while region 2
was softer (+1.4% yoy). Challenges included continued weakness in France,
price pressure, and higher automation that could reduce revenue per project,
though this is being offset by clients starting more projects and expanding
use cases, resulting in overall growth being supported by core markets. The
EBIT margin of Q2 2025 improved from 13.3% to 16.4% exceeding our estimate
of 15.3%, supported by an EUR 18.5m extraordinary income, a favorable
regional mix, and improved cost ratios. We have conducted a fundamental
revaluation of the business, reflecting the structural advantages of Reply's
agile, decentralized, and innovation-driven model, which supports
above-average growth and margins compared to peers. With resilient demand in
growth markets, a robust balance sheet, and a clear focus on strategic AI
initiatives, the investment case remains compelling. We raise our target
price from EUR 125 to EUR 178 and change our recommendation to Buy.


You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=716f18bdb558694153cc73046bac8223
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/

---------------------------------------------------------------------------

The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com

---------------------------------------------------------------------------

2185264 18.08.2025 CET/CEST

°