Terminal X Reports 40% Profit Jump Despite Revenue Dip and Margin Pressure

Terminal X, the e-commerce arm of the Fox Group, reported a 40% increase in net profit for the first quarter of 2025, reaching NIS 5.6 million, up from NIS 4 million in the same quarter last year — despite a decline in revenue from its flagship platform and profitability challenges in its fastest-growing segments.

The company's quarterly report, released Sunday, reveals a mixed performance: While the core Terminal X online store experienced a decline in revenue, and recently acquired businesses dragged down margins, the overall bottom line still improved significantly.

The company's stock price remained unchanged following the earnings release.

Acquisitions Drive Revenue Growth, Not Profit

Terminal X has ramped up its growth strategy by acquiring local brands. In 2024, it purchased Strongpool, a sportswear retailer, and Ada L’Zorgen, a cosmetics company. These followed the 2022 acquisition of Sistars, a women’s fashion platform.

Combined, these three acquisitions generated NIS 17.6 million in revenue in Q1 — a 15% increase year-over-year. However, the growth did not translate into higher profitability this quarter.

Integration Costs Weigh on Margins

The hit to profits stems from integration challenges following the acquisitions. Strongpool and Ada L’Zorgen were only fully integrated in July and December 2024, respectively. The transition of their operations into Terminal X’s advanced robotic logistics center led to one-time operational costs, which temporarily weighed on margins.

Despite short-term pressures, Terminal X views these acquisitions as strategic long-term growth levers. The company has signaled that further M&A activity is likely, positioning itself as a consolidator in Israel’s online retail space.

By consolidating logistics and operational infrastructure, Terminal X aims to unlock efficiencies in coming quarters — potentially reversing the margin pressure seen in Q1.