Airbnb (ABNB  ) shares were initially lower following the company's Q2 results as it missed top-line expectations. However, investors furiously bought the dip as they chose to focus on the company's strong growth and optimistic outlook.

Similar to Uber (UBER  ), the spike in inflation has provided a surprise benefit to Airbnb. Both companies are seeing a strong surge in drivers and hosts as people are looking for ways to augment their income given the rising cost of rent, food, and energy.

Overall, Airbnb shares are down 28% YTD but are now up more than 40% from their July lows. This is also consistent with economic data and earnings which are showing that the travel sector is booming. Airbnb's marketplace model also is an attractive business model as it results in higher margins and numerous opportunities for monetization.

Inside the Numbers

In Q2, Airbnb reported $0.56 in earnings per share, beating expectations of $0.43 per share. This marks the company's most profitable quarter. Overall, the company had net income of $379 million, compared to a loss of $68 million in the same quarter, last year.

Revenue is now $2.10 billion, falling just short of analysts' expectations of $2.11 billion but up an impressive 58%. It attributed some revenue weakness to a large number of flight cancellations during the quarter.

The company's strong results are also an indication that the services sector and travel industry are booming. It's also a reflection of more cost discipline especially when it comes to marketing spending. It also implemented a $2 billion share buyback, signaling to investors that it sees current prices as attractive.

Shares were down about 9% after hours, despite what appeared to be a strong report, suggesting Wall Street was looking for faster growth and a revenue beat. The company also said it was impacted by flight cancellations at the end of the quarter.

For the next quarter, Airbnb sees record revenue despite some headwinds from the strong dollar. Its forecast came in slightly above expectations at between $2.78 billion and $2.88 billion, which was better than analysts' expectations of $2.77 billion in Q3 revenue.