Reply SpA's Growth Fueled by AI Projects

On March 12, 2026, Reply SpA announced its annual financial results, showcasing an 8% year-over-year revenue growth. This growth aligned with expectations, driven predominantly by AI, cloud, and cybersecurity services, with health, government, and defense sectors leading the demand. The company's partnerships with OpenAI, AWS, and Mistral, along with new startups, expanded their service offerings. Region 3 showed significant geographical growth due to strategic acquisitions, although Region 2 lagged behind.

Reply's EBITDA margin improved from 17.8% to 18.8%, bolstered by a EUR 24 million provision release. However, restructuring in France affected profitability. The logistics, transportation, automotive, and media sectors faced challenging demand. Management anticipates gradual demand improvement in 2026, led by AI projects, but predicts single-digit growth constrained by productivity gains and smaller projects. Quirin Privatbank's target price remains EUR 178, maintaining a Buy recommendation.