Huawei’s surging growth in revenue cratered during the first quarter, posing a potential harbinger of things to come for other networking vendors. The Chinese juggernaut reported a 1.4% year-over-year increase in revenue during Q1 totaling almost $25.8 billion.

Huawei’s growth in sales the year prior was at 39%. Despite the obviously abrupt decline, Huawei said its business remains strong amid a litany of challenges due to the COVID-19 pandemic and restrictions imposed on the company’s business in the United States and other Western countries.

“The growth rate has slowed, but this is also a resilient performance in the face of both the entity list and the coronavirus we are facing at this moment,” Huawei VP Victor Zhang said in a prepared statement.

Indeed, the company faces a barrage of threats that have nothing to do with the pandemic, including an ongoing campaign by the U.S. government to cripple the world’s largest telecommunications equipment vendor. 

Federal prosecutors filed new charges against the company in February, accusing it of espionage and conspiring to steal trade secrets. Less than a week later, a federal judge dismissed a lawsuit filed by Huawei that challenged the constitutionality of a law that bans the U.S. government, its contractors, and suppliers from purchasing the Chinese vendor’s equipment and services.

Huawei has also been hit with a trade ban for almost a year that prohibits it from selling to or buying components from American companies, following a presidential executive order. An oversight board in the United Kingdom discovered significant security vulnerabilities in its software, and Huawei CFO Wanzhou Meng remains under house arrest in Canada after the U.S. Justice Department accused her of violating sanctions on Iran.

Many of these issues spilled over into a heated debate during a panel at the RSA Conference. In a separate interview with SDxCentral during the event, Huawei USA CSO Andy Purdy admitted that the company has “had some bumps in the road.” 

Huawei today maintained that its business is performing in line with expectations. At the end of March, Huawei’s factories had fully resumed activities and the company hasn’t encountered any issues supplying equipment to its customers, Eric Xu, rotating chairman at Huawei, said during a press conference. 

“But as COVID-19 continues to spread, we may see lasting global effects for some time. Our supply chain department is providing daily updates about how our suppliers around the globe have been doing so that our company can do everything we can to help partners along the supply chain combat the pandemic and continue production,” Xu said.  “We can’t say for sure how the pandemic will evolve. If the measures being taken to combat the virus are not effective, it is possible that some of our suppliers won’t be able to continue supplying us,” adding that would lead to some challenges.

He also admitted that the U.S. government’s “attacks against Huawei have had quite an impact. At the very least, they have created a lot of extra work for us.” Xu noted that some operators that used Huawei equipment for 2G, 3G, and 4G networks ended up choosing another vendor for 5G “for a variety of reasons.”

Huawei has warned analysts and industry observers that 2020 will be difficult, but it recently decided to boost investment on research and development by 41% to $20 billion this year in preparation for increased demand for network infrastructure and services. 

Ren Zhengfei, founder and CEO of Huawei, last month told The Wall Street Journal that most of the company’s 150,000 China-based employees were back to work following stoppage orders, and some operations resumed in early February. Huawei executives are conveying confidence amid unprecedented challenges, but leaders have also been relatively forthright about the impacts the company faces due to the pandemic.

5G remains a significant opportunity for Huawei to increase sales. Total revenue derived from 5G was just over $3 billion last year, Xu said last month, according to a transcript provided by Huawei. 

“It made up only a small percentage of our carrier business revenue and therefore only a very small percentage of our company’s total revenue,” Xu said. “5G deployment was only just starting to kick off worldwide in 2019, and we have not yet seen large-scale 5G rollout.”