Nokia posted flat first-quarter results that could be seen as a win for the vendor, which is working through supply chain constraints and varying levels of 5G adoption across its customer base. However, company management remains cautiously optimistic on how the rest of the year will play out.

Nokia, which remains somewhere in the top three of worldwide radio access network equipment vendors, reported a 1% year-over-year increase in companywide revenues for the quarter. CEO Pekka Lundmark spun the results upward by stating that the increase came despite often-noted supply chain challenges.

“We could actually have grown faster because we have a very strong order backlog,” Lundmark said during Nokia’s earnings call. “Supply chain continued to constrain our growth notably in mobile networks and then within network infrastructure business inside the optical networks business.”

Lundmark also late cited ongoing silicon shortages that while improving are very volatile due to some supplier-specific issues with growing pandemic-related lockdowns in some of China’s largest cities.

Lundmark said that the vendor has a “strong view” of the 5G market, but that was girded by “the absence of something in the macro environment that would take everyone with a big surprise.”

He noted that most service providers have robust capex plans heading into 2023, with the initial surge in Japan, South Korea, and the United States being overshadowed by work in Europe, Southeast Asia, India, and Latin America. “So, we continue to have an optimistic view on the 5G cycle,” Lundmark added.

Lundmark also provided a bit of caution in terms of the vendor’s recent data center switch deal with Microsoft. That agreement will see Nokia provide its 7250 IXR chassis-based interconnect routers to support Microsoft’s “high-density 400GE applications.” It will also supply other hardware to support the hyperscaler’s network applications.

“Obviously the webscalers are a very large market and the Microsoft deal is one important deal,” Lundmark explained, adding that Nokia was also working with other hyperscalers. “These are often deals that take a long time to conclude. And you often need to engage in very detailed technical R&D level discussions that do take time. So, we do not want to get ahead of ourselves on this. But this deal with Microsoft is a strong testimony to the competitiveness of our portfolio. But again, these deals, at the moment, they are lumpy and they do take time. But this is definitely a segment that we want to build more traction on going forward.”