Sarine Technologies: 9M 2025 Operational Update – Key Strategic Shifts and Financial Performance
Sarine Technologies: 9M 2025 Operational Update – Key Strategic Shifts and Financial Performance
Overview
Sarine Technologies Ltd. (“Sarine”), a global leader in precision technology solutions for the diamond and gemstone industry, has released its operational update for the nine months ended 30 September 2025. The company, listed on both the Singapore Exchange and Tel Aviv Exchange, provided critical insights into its ongoing strategic initiatives, financial performance, and market challenges.
Key Highlights
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Challenging Market Conditions: The natural diamond manufacturing industry continues to face headwinds, primarily due to increased competition from Lab Grown Diamonds (LGD) in the key U.S. market, subdued luxury retail sales in China, and uncertainties related to U.S. import tariffs.
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Strategic Initiatives Gaining Momentum:
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Most Valuable Planning (MVP) Solution: Expansion of the MVP optimisation paradigm for rough diamonds up to 1.25 carats has been successful. Notably, work on adapting the solution for stones over 2 carats is showing promising results, with larger stones yielding better margins.
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AI-Based Grading for Polished Diamonds: The company’s AI-driven grading services, especially for LGDs, are seeing broader adoption. This is partly due to the GIA’s shift to a simplified (“exceptional” or “normal”) grading system for LGDs, prompting high-end LGD producers and U.S. retailers to evaluate or adopt Sarine’s more detailed reports.
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Traceability Solutions: U.S. retailers are considering Sarine’s grading reports in conjunction with unique traceability solutions for natural diamonds.
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Operational Restructuring:
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All production activities were transferred to the wholly-owned Indian subsidiary in 2025, complementing the earlier relocation of most customer support services in 2024. This restructuring has significantly reduced costs, with full benefits expected to be realised in 2026.
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Financial Results:
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Revenue: Decreased to US\$22.3 million for 9M 2025, down from US\$30.6 million for 9M 2024.
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Net Loss: Reported a small net loss of US\$0.5 million (including a US\$0.1 million loss from the Q3 investment in Kitov A.I.), compared to a net loss of US\$0.2 million in the prior-year period.
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EBITDA: US\$2.2 million for 9M 2025, versus US\$2.9 million in 9M 2024.
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Diversification Efforts:
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Kitov.ai Investment: In August 2025, Sarine acquired a 33% stake in Kitov.ai, a provider of high-end quality inspection solutions for diverse industries, and provided a convertible loan that could allow Sarine to increase its stake up to 51% under certain conditions.
Implications for Shareholders
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Revenue Decline and Margins: The sharp drop in revenue and continued net losses highlight ongoing market difficulties. However, the successful cost reductions and potential margin improvements from larger stones using MVP solutions could be positive catalysts in the medium term.
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Growth in Recurring Revenues: Sarine is increasingly relying on recurring revenues from proprietary cloud-based software and pay-per-use services, which may provide greater stability amid industry volatility.
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Market Opportunity in LGD: The GIA’s exit from detailed LGD grading presents Sarine with a significant opportunity to capture market share and become a preferred provider for high-end LGD grading, especially in the U.S.
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Operational Efficiency: The full-year impact of cost savings from the shift to India will only be realised in 2026, indicating potential for improved profitability going forward.
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Diversification Beyond Diamonds: The investment in Kitov.ai marks Sarine’s initial step to diversify revenue streams beyond diamonds and gems, potentially reducing business risk and opening new growth avenues.
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Potential Share Price Sensitivity: The combination of near-term losses, revenue pressure, cost-saving measures, and new growth initiatives (both in AI-driven solutions and diversification) could make the stock more volatile. Any positive traction in the adoption of its technologies, especially by major U.S. retailers or in the LGD market, could be a catalyst for share price recovery.
Company Background and Strategy
Sarine Technologies, established in 1988, is renowned for its advanced technologies spanning modeling, analysis, evaluation, planning, processing, grading, and trading of diamonds. The company’s ecosystem centers around its proprietary Advisor® software and the newly launched MVP™ software, which leverages automation and advanced analytics for natural rough diamond planning. Sarine also offers Lab-Grown Diamond (LGD) planning, provenance and traceability solutions, automated grading systems, and a suite of retail-focused offerings.
The company’s recent pivot toward recurring revenues from software and pay-per-use services, along with expansion into new industrial verticals via Kitov.ai, underscores a strategy to drive sustainable growth despite industry headwinds.
Contact Information
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with their financial advisors before making any investment decisions. The information provided is based on publicly available company reports and may be subject to change or updates.
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