Amid waning demand for smartphones, Xiaomi posted its slowest-ever quarterly revenue growth since its Hong Kong listing last year.

In the third quarter of 2019, the Chinese tech company booked 53.6 billion yuan ($7.6 billion) in total revenue, representing a year-on-year increase of 5.5%, according to the company’s unaudited financial report released Wednesday. Adjusted net profit grew 20.3% to 3.47 billion yuan.

Although the figure beat analysts’ expectations, it represented Xiaomi’s slowest revenue growth rate since the first quarter of 2018, when the smartphone-maker reported a 70% year-on-year rise thanks to the popularity of its handsets.

In the three months through September, the company’s revenue derived from its smartphone business dropped by 7.8% to 32.3 billion yuan, but still accounted for more than 60% of total revenue. Xiaomi sold 32.1 million handsets globally during the period, making it the world’s fourth-largest smartphone seller with a 9.2% market share, according to the earnings report. That position was secured despite China’s domestic smartphone market shrinking by 3% during the quarter, according to market research firm Canalys.

Xiaomi’s earnings results also revealed how the company has pivoted toward internet of things (IoT) products and overseas markets to offset diminishing smartphone sales. Its IoT and lifestyle arms generated 15.6 billion yuan in the third quarter, a 44.4% year-on-year increase. Revenue from overseas markets grew 17.2% to 26.1 billion yuan, Xiaomi said.

Xiaomi’s internet business also continued to gain momentum during the third quarter thanks to the continuing expansion of its user base. Monthly active users (MAUs) of its Android-based operating system MIUI increased to 291.6 million in September, while MAUs of its smart TV and entertainment system, Mi Box, reached 23.9 million, the report said.

Xiaomi’s Hong Kong-listed shares were up by 2.86% to HK$8.98 ($1.15) as of 12.30 p.m. Thursday.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Xiaomi Appoints Controversial Chief Voice Scientist