SoundCloud, the popular online music and audio sharing platform, is now exceeding 175 million listeners each month and is on track to reach 200 million. But its rapid growth has seen the company’s costs run away from its revenues.

According to recent annual filings for 2013, Soundcloud posted turnover of €11.2 million ($14.1 million) in 2013, up 40% from 2012’s revenues of €8 million. But its operating loss in the period more than doubled, to €23.1 million ($29.2 million) in 2013 from €12.4 million in 2012.

“We are in a phase of growing SoundCloud into the market-leading platform for listening to, creating and sharing sound,” the company notes in the filing. “This has necessitated investment in technology, headcount and marketing. Our overhead base has increased faster than our revenues.”

The company ended 2013 with 224 employees across Berlin, London, San Francisco and Sofia in Bulgaria — the Bulgaria part of the company coming by way of an acquisition of a startup called Instinctiv back in 2012 for $10 million. (The acquisition, little reported at the time, is also noted in this annual report. SoundCloud points out that it made no acquisitions in 2013.)

The annual report was disclosed in recent filings with Companies House in the UK, where SoundCloud is registered. They were first spotted by Swedish publication Dagens Industri (in Swedish and behind a paywall). Sweden has been a very important center for the digital music industry. It’s home to Spotify, and while SoundCloud based itself in Berlin from 2007, it was originally started in Stockholm, Sweden by Alex Ljung and Eric Wahlforss.

To date, SoundCloud has disclosed a total of $123.3 million in funding. That includes a Series D round from earlier this year of $60 million from Institutional Venture Partners and the Chernin Group. In July 2014, it also picked up an undisclosed amount in private equity from the German Startups group (we’ve contacted them to try to get more details). The Series D round of funding valued SoundCloud at $700 million.

SoundCloud also notes in the report that at the end of 2013 it had €46 million in cash at bank and in hand, before deducting €9.4 million in amounts falling due within the next near. As DI points out, if SoundCloud continues growing at its current rate or faster, this will mean that it will have to raise more funding very soon.

That math also underscores the push the company is making to monetise by way of advertising, premium services and deals with labels. In August of this year, the company launched an ad platform and began to sharpen its strategy for premium, paid subscriptions.

The idea there, it seems was twofold. First, to team up with big brands, and so far some of these have included the likes of Red Bull, Jaguar and Comedy Central. Second, to tie up with record labels, for ads to run alongside music from artists signed to those labels.

However, the FT reported earlier this week that SoundCloud’s negotiations with major record labels have stalled. Universal, Sony and Warner are all holding out for better terms, the report said, without going into details of what the unsatisfying terms offer each party.

Deals with labels have been complex because they are about more than about advertising alongside content hosted and consumed on SoundCloud. There is also the issue of paying out royalties for licensed music that gets listened to on SoundCloud.

Music is uploaded to the platform not just by artists but by consumers. The FT notes that SoundCloud users today are uploading about 12 hours of audio every minute — a true realisation of the original “YouTube for audio” ambition that Ljung and Wahlforss had when first conceiving of SoundCloud.

The annual report makes note of SoundCloud’s priority to be a legit platform as it grows: “We go to great lengths to protect against the use of our platform for the distribution of unauthorised or unlawful material,” the directors write.

Nevertheless, as with so many other digital music services, the issue of copyright has been swirling around SoundCloud for a while. We had heard that it was one of the reasons that M&A talks with Twitter did not progress earlier this year.

Meanwhile, some artists have been very outspoken about how SoundCloud’s cooperation with labels around copyright and royalties has not necessarily been to the benefit of artists or fans.

The company also points out the pitfalls of the highly competitive environment for digital music services today — another hurdle

“Typical internet users use about four to five different music and audio services during a month. The market is heavily contested by strong incumbents such as YouTube, Apple and Amazon as well as new more focused players. While the group does not expect the market to be a winner takes all opportunity, there are economies of scale and technology developments that need to be monitored closely.”