Airbnb said Tuesday that it lost $349 million in the fourth quarter due to an income tax settlement with Italy, but bookings and revenue rose, and the short-term rental giant said demand remains strong.

The company forecast first-quarter revenue that would meet or beat Wall Street expectations.

However, the pace of bookings growth is likely to “moderate” from the fourth quarter into the first, and the early timing of Easter could hurt growth in the second quarter, Airbnb said.

The fourth quarter was marred by $1 billion in one-time tax withholding expenses and lodging tax reserves.

The vacation-rental platform disclosed in December that it would pay Italy’s tax agency 576 million euros ($621 million at the time) to a case involving withholding from property hosts in that country. Airbnb not admit wrongdoing, and company officials say they don’t fact any similar liability in other countries.

Excluding the special expenses, Airbnb said it would have earned $489 million.

Revenue rose 17% to $2.22 billion, beating the $2.17 billion forecast of analysts in a FactSet survey. Bookings rose 12%, and the average daily rate gained 3%.

Airbnb forecast first-quarter revenue of between $2.03 billion and $2.07 billion. Analysts were looking for $2.03 billion.

The company said demand remains strong, especially among new users of the site. Bookings grew 12% from a year earlier, and picked up after “volatility” in October, which it did not explain in a letter to shareholders.

Airbnb said its growth is picking up in less mature or “under-penetrated markets” including Brazil, where bookings made inside the country have nearly doubled since late 2019.

The value of gross bookings, at $15.5 billion, was slightly higher than the $15.2 billion forecast among analysts.

The San Francisco company added nearly 1.2 million listings last year, pushing its total to more than 7.7 million, with the fastest growth rates in Asia Pacific and Latin America.

(AP)