Juniper Networks faced a difficult first quarter of 2020 racked by supply-chain shortages resulting from the global pandemic, said CEO Rami Rahim on Tuesday’s earnings call. The company reported flat revenues of $998 million falling short of expectations.

“Revenue for Q1 was impacted due to COVID-19-related supply chain challenges, which negatively affected customer lead time and our ability to recognize revenue in the quarter," Rahim said.

Juniper’s service provider business was hit the hardest by COVID-19-related challenges, declining 14% year over year. However, Rahim noted that the vendor expected service provider revenues to decline during the quarter — albeit not to this extent.

“If not for these challenges, we anticipate our service provider business would have experienced a mid-to-high single-digit year-over-year decline and performed in line with our original expectations for the period,” he said.

Grasping a bright point in the company’s earnings, Rahim said that demand during the quarter remained “healthy” with product orders growing 10% year over year. On the service provider front, Rahim said orders were up a promising 4% in Q1, the “first year-over-year increase since 2017.”

Another bright spot in Juniper’s earnings came from the company’s cloud, software, and enterprise divisions.

“We experienced better than expected results during the March quarter as the business grew 17% year over year and increased year over year for a fourth consecutive quarter,” Rahim said of the company’s cloud revenues. Additionally, Juniper’s software business grew 9% year over year and accounting for roughly 11% of the company’s overall revenues.

In the enterprise space, Juniper reported a 5% increase in sales and double-digit order growth during the first quarter. However, Rahim noted that this momentum was stymied by COVID-19-related supply chain shortages in the second half of the quarter. And Juniper now predicts its enterprise business will likely decline during the second quarter of 2020.

That said, Rahim sounded confident that Juniper’s enterprise business will remain resilient. “We continue to see strong momentum with Mist, which we acquired on April 1, of last year, and is now the centerpiece of our AI enterprise strategy,” he said, adding that the platform continued to exceed expectations. “We believe we have just scratched the surface of Mist potential and the impact it is likely to have on the broader Juniper portfolio.

Juniper’s switching and security revenues were another sweet spot for the company with the former bounding 25% year over year and the later up 10% over the same period.

However, the company’s routing business didn’t fare as well, falling 16% year over year as a result of COVID-19 related supply shortages.

Despite poor optics and an uncertain market, Juniper Networks CFO Ken Miller expressed optimism for the company’s second-quarter revenues. “While we are seeing uncertainty in our business due to the COVID-19 pandemic, we expect to see sequential revenue and earnings growth in the second quarter,” he said.

To support these claims, Miller pointed to the company’s backlog of orders and “healthy” momentum within Juniper’s service provider and cloud businesses. “We believe these factors should help offset increased uncertainty in certain segments of the enterprise market," he said.