Why OHB's 130% Rally Now Hinges on the KIRK Defense Gamble

OHB shares surged on €35B German space defense plan and KIRK joint venture, but Q1 cash flow turned deeply negative despite soaring revenue and backlog.

The Bremer spacefahrt group has rarely been this visible. In March, OHB shares had already doubled from year-end levels after a sharp operational turnaround. By mid-May, they had surged another 130% intraday before profit-taking erased a chunk of those gains. The trigger: a joint venture called KIRK that positions OHB at the intersection of space, artificial intelligence and military surveillance — a market the German government plans to fund with €35 billion through 2030.

OHB and Helsing, together with Kongsberg Defence & Aerospace and HENSOLDT, announced the tie-up on May 19. The venture, whose acronym stands for Künstliche Intelligenz und Raumfahrt-Kompetenz, aims to build a space-based system for real-time reconnaissance, surveillance and targeting. Helsing provides the AI layer for orbital data processing, OHB delivers the satellite platforms and operations. HENSOLDT brings space-grade sensors, and Kongsberg adds small-satellite know-how and ground-station infrastructure. The consortium is targeting the Bundeswehr’s Spock 2 program, which envisions continuous space-based tracking of troops and vehicles.

The political tailwind is unmistakable. Defence Minister Boris Pistorius has budgeted roughly €35 billion for space-related defence spending by 2030. On the same day KIRK was unveiled, the BAAINBw procurement agency opened an outpost in Bremen — explicitly citing OHB’s proximity. The company already serves as prime contractor for the SARah military reconnaissance constellation, which replaces the SAR-Lupe system, giving it a credible track record for KIRK’s ambitions.

Yet the financial picture is more nuanced. OHB’s first-quarter 2026 results, published before the KIRK announcement, showed strong operational progress. Revenue climbed to €270.9 million from €229.3 million a year earlier. EBITDA more than doubled to €25.7 million, and EBIT reached €15.2 million, also more than double the prior-year quarter. Net profit attributable to shareholders jumped to €9.9 million, or €0.52 per share, versus €3.7 million and €0.20 a year ago. The Space Systems segment accounted for the bulk of the improvement, with segment revenue of €209.2 million and EBIT of €13.9 million.

But the cash-flow story is far less reassuring. Operating cash flow swung to minus €112.5 million, and free cash flow landed at minus €119.3 million — both significantly worse than in the year-earlier period. Cash and equivalents plunged from €220.6 million at the end of 2025 to just €54.3 million as of March 31. OHB attributes the drop to unusually high cash inflows late last year, driven by milestone completions on space projects. The board maintains that liquidity remains adequate, pointing to the cyclical nature of space contracts and flexible financing structures to handle the ebbs.

The contrast between a record order backlog — €3.35 billion, up from €2.31 billion a year ago — and the steep cash outflow is what makes the OHB story bipolar. The backlog is heavily weighted toward Space Systems, which accounts for €2.68 billion. This quarter alone brought two major contracts: OHB Sweden won lead contractor status for the EPS-Sterna microsatellite constellation, and OHB Italia was assigned the Ramses mission.

Investors have been riding the narrative rollercoaster. The Xetra closing price on March 31 stood at €268.00, up from €116.50 at the end of 2025 — a 130% rally. Trading volume surged: average daily turnover reached 22,412 shares, compared with 6,944 a year earlier. Then came the KIRK news. After a sideways period, the stock broke out sharply in late April, peaked at €629, and then gave back roughly €80 on the day before closing at €549. By mid-session the following day, it had stabilised at €555.00 in XETRA trading.

For now, KIRK remains a strategic lever, not a financial one. Details on capitalisation, duration, budget and likely order volume have yet to be disclosed. The market has embraced the repositioning — OHB is increasingly seen as a defence and data-infrastructure play — but the next catalyst will be clarity on the venture’s financials. The annual general meeting on June 24 and the second-quarter results on August 6 will provide further data points. Until then, the cash burn and the KIRK promise are likely to keep the stock volatile.