Airbnb just reported earnings. Here is why shares are rallying.

Airbnb (NASDAQ:ABNB) rallied in postmarket trading on Thursday as investors sized up a Q3 earnings report that topped estimates for key metrics.

For Q3, the San Francisco-based company reported that gross booking value rose 10% year-over-year to $20.1 billion to top the consensus estimate of $19.8 billion. Strong growth in nights and experiences booked and a modest increase in ADR drove the gross booking value growth during the quarter.

Revenue was up 10% to $3.73 billion to edge past the consensus estimate of $3.72 billion. Airbnb (ABNB) said the revenue growth was primarily driven by solid growth in nights stayed and a modest increase in the average daily rate.

Net income fell to $1.37 billion from $4.37 billion a year ago. The decline was primarily due to the prior year’s valuation allowance release of U.S. deferred tax assets of $2.8 billion, and the recognition of non-cash tax expense related to the utilization of some of those assets in the current year. Adjusted EBITDA rose 7% to $1.96 billion. Adjusted EBITDA margin was down two percentage points to 52%.

Airbnb (ABNB) generated $1.1 billion of net cash provided by operating activities and $1.1 billion of free cash flow in Q3. Trailing twelve months free cash flow was $4.1 billion. The company bought back $1.1 billion worth of its stock.

Looking ahead, Airbnb (ABNB) said it is off to a great start in Q4 after building on robust momentum. The online travel giant said it is seeing strong demand trends across core and expansion markets for both long and short lead times. For Q4, Airbnb (ABNB) sees revenue of $2.39 billion to $2.44 billion, representing year-over-year growth of 8% to 10%.

Shares of Airbnb (ABNB) were up 8.2% in after-hours trading to $159.50. That move followed a 4.6% gain during the regular trading session.