Shopify, a Canadian e-commerce behemoth, posted third-quarter results that fell short of analysts' estimates, as a pandemic-fueled surge in online purchasing begins to cool ahead of the crucial holiday shopping season.

Shopify, which provides infrastructure for retailers to set up their stores online and makes revenue mostly through subscriptions and merchant services, saw a surge of new business during the epidemic because of the widespread shift to e-commerce.

However, as individuals leave their homes and larger competitors like Amazon improve their products to retain customers, Shopify's growth, which is mostly driven by mom-and-pop shops, is expected to slow, according to analysts.

Revenues are expected to expand fast this year, albeit at a slower rate than in 2020, according to the company.

The company reported a 46% increase in revenue for the quarter ending Sept. 30, which was lower than projected. The adjusted profit of 81 cents per share also fell short of analysts' expectations of $1.18 per share.

Shopify logo and symbol, meaning, history, PNG

The company's shares on the New York Stock Exchange, which nearly tripled in 2020, plunged 4.5 percent in premarket trade on Thursday.

Gross merchandise volume, a key indicator of the e-commerce industry's health, increased by 35% to $41.8 billion in the third quarter.

To help merchants handle sales, Shopify formed agreements with firms like TikTok and payment providers like Affirm, AmazonPay, and Paypal.

Subscription solutions sales increased by 37% to $336.2 million in the quarter as more merchants joined the platform.