(Reuters) - Airbnb Inc’s initial public offering (IPO) registration showed on Monday that the home rental startup turned a profit in the third quarter despite the COVID-19 pandemic, as it gears up for one of the most anticipated stock market debuts in recent years. The filing, published ahead of Airbnb’s anticipated stock market debut in December, showed a dramatic recovery in its fortunes, after the coronavirus outbreak dragged down its core home rental business during the first half of the year. The slump forced it to lay off 25% of its workforce in May, suspend marketing activities for the year and seek $2 billion emergency funding from investors, including Silver Lake and Sixth Street Partners, at a valuation of $18 billion. It has recovered by focusing on listing homes away from cities that people want to rent during the pandemic. Airbnb’s revenue fell 18% in the third quarter to $1.34 billion from a year earlier, but it reported net profit of about $219 million, helped mainly by a clamp-down on costs. Its business took a bigger hit internationally than in the United States, reflecting the financial fallout of extensive lockdowns in Europe to contain the spread of the virus. “The recovery in the second and third quarters of 2020 is attributable to the renewed ability and willingness for guests to travel, the resilience of our hosts, and relative strength of our business model,” Airbnb said. The listing would cap a blockbuster year for IPOs, as companies capitalize on a stock market rally in the second half of the year, fueled by monetary as well as fiscal stimulus in a bid to blunt the fallout of the pandemic. Airbnb has not turned an annual profit since its launch in 2008, and warned this will likely also be the case this year despite it being profitable in the third quarter. It said it expected a decline in bookings and rise in cancellations in the fourth quarter. The company also revealed it faces a hefty tax bill. It said that the U.S. Internal Revenue Service informed it in September it owed $1.35 billion, plus penalties and interest, over the sale of international intellectual property to a subsidiary in 2013. Airbnb said it would “vigorously contest” the tax adjustment. Airbnb said that its co-founder and CEO Brian Chesky, who will remain in control of the company following the IPO thanks to shares with special voting rights, has agreed to a cut to his base salary from $110,000 to $1 amid the belt-tightening. In exchange, the company approved restricted stock units for Chesky over the next 10 years that could be worth $120 million, if the company’s stock hits certain milestones. Chesky intends to donate the net proceeds from this award to community, philanthropic and charitable causes, the company said. UNICORN STATUS Airbnb was launched by Chesky and Joe Gebbia 12 years ago as a website to take bookings for rooms during conferences, including the Democratic National Convention that year in Denver. It expanded its listings to include apartments, houses, and vacation rentals in the following year after taking seed funding from investors, including Sequoia Capital. Airbnb achieved “unicorn” status in 2011, with listed properties in 13,000 cities across more than 180 countries at the time, after being valued at more than $1 billion in a funding round led by Andreessen Horowitz. Some of Airbnb’s other investors include Hollywood actor Ashton Kutcher; buyout firms General Atlantic, TPG, Hillhouse Capital; and investment management firms Vanguard Group and Fidelity Investments. Airbnb plans to list on the Nasdaq under the symbol ABNB. It filed for an IPO of up to $1 billion on Monday, but that is a placeholder amount and is expected to change before its debut. Reuters was the first to report in October that Airbnb was aiming to raise around $3 billion in its IPO that could value it at over $30 billion. Morgan Stanley and Goldman Sachs Group Inc are the lead underwriters for the IPO.