On Wednesday, Airbnb released its fourth-quarter (Q4) results, showcasing a 17% increase in revenue to $2.2 billion compared to the same quarter the previous year. Adjusted earnings rose by 46% to $738 million in Q4 2022. Despite these positive figures, the company reported a net income loss of $349 million.
The stock market responded with a 1.94% decrease in Airbnb’s stock value at the time of writing, with expectations of further decline ahead of Wall Street’s opening.
These financial results follow Airbnb’s resolution of a tax dispute with the Italian government, in which the company agreed to pay €576 million to settle unpaid taxes for Italian landlords using the platform between 2017 and 2021. Italian prosecutors claimed Airbnb owed $840 million (€779 million) in unpaid short-term rental taxes.
As part of the settlement, Airbnb has committed to developing new tools for hosts to withhold and pay taxes to Italian authorities automatically. The company stated, “The vast majority of hosts on Airbnb in Italy are ordinary families using the platform for supplemental income.” Airbnb hopes the agreement and recent legislative changes will provide hosts with certainty regarding hosting rules in the coming years.
The importance of the Italian market for Airbnb cannot be understated, as tens of thousands of hosts in the country utilize the platform for property rentals. Giorgia Meloni, the prime minister of Italy’s far-right coalition, has vowed to stop short-term rental tax evasion and raise the tax rate for property owners from 21% to 26%.
Despite the financial challenges and regulatory scrutiny, Airbnb is committed to working with Italian authorities and improving compliance. As of January 10, 2022, Airbnb’s valuation exceeded $90 billion (€82 billion). The company’s ability to navigate tax disputes and adapt to regulatory changes will likely impact its performance in key markets.
