Dave Rennie admits his Australia team were "not good enough" as they were beaten by Italy for the first time ever on Saturday.
Full-back Ange Capuozzo scored two tries as Italy claimed a 28-27 victory over the Wallabies in Florence.
Australia's debutant fly-half Ben Donaldson missed a late conversion to win the game as his team fell to a historic defeat.
Rennie was frustrated with his side's performance, telling reporters: "We didn't play well enough.
"We gave them a head start at 17-3, gave them hope and enthusiasm and brought the crowd into the game.
"We didn't dominate up front as we would have hoped. We gave them field position through penalties and turnovers
"It is hugely disappointing and not good enough. All I can say is the boys are hurt; they know we are better than that."
Rennie refused to blame Donaldson for the loss, despite his late miss.
"It's tough. He's hurting but we have an arm around him," Rennie added.
"You can always look at the last few seconds of the game, but there was lots we did wrong earlier to put Ben in that position.
"We feel for him but it is not the reason we lost today."
Italy had previously lost all 18 meetings with Australia, stretching all the way back to 1973.
Hooker Gianmarco Lucchesi spoke of his delight at the win, saying: "I have so many amazing emotions – it's an incredible victory.
"We felt we could do it from the first minute. We went out on the field with the right spirit, and attacked and defended really well."