Audible's (NASDAQ:ADBL) audiobook business continues to trend in the right direction, and its stock is moving right along with it -- it's now up over 60% over the past 12 months with today's 7% increase. Let's tune into the company's second-quarter results and have a closer look.

Revenues increased 36% compared to the same period a year ago, as Audible benefited in a shift to premium users, or what the company refers to as Gold or Platinum listeners. Roughly 56,000 new listeners were added in the quarter, bringing the total number of subscribers to nearly 431,000. What's more impressive is that 96% of the new additions were "recurrent revenue generating Gold or Platinum Audible listener members versus 47% of new additions" this time last year, according to CEO Donald Katz during prepared remarks delivered in the company's earnings conference call.

The shift from value subscribers, which use the service on a monthly non-recurring basis, to premium members has helped reduce the percentage of lost users, or what is referred to as churn. Audible's churn rate was solid in the first quarter at 3%, and it was even better this period, down to 2.8%.

Not only are premium users more loyal, their spending reflects their namesake, generating almost five times as much in annual revenue for Audible. Value members spend close to $50 per year, while Gold and Platinum members cough up an average of over $240.

The biggest knock against Audible right now is profitability, or lack thereof. However the company has lost significantly less per share through the first half of this year than it did last year; it lost $0.06 per share so far in the first two quarters of 2007 versus a loss of $0.21 per share in the comparable period a year ago. For a company that has been around since the late '90s, you would like to see greater consistency here. Mitchell did address profitability in the call, asserting, "We continue to believe there is still opportunities to reduce expenses in our business and to improve our EBITDA margin." Gosh, I should hope so, otherwise it will not take long for shareholders to lose their current euphoria over the company's top-line performance.

Audible appears to be turning business up a notch, both with improvements in revenue stream as well as in reducing operating costs. Plus, as it continues to pursue key partnerships with other audio distributors like XM Satellite Radio (NASDAQ:XMSR), (NASDAQ:AMZN), and Apple (NASDAQ:AAPL), business prospects should remain healthy for some time.

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Fool contributor Jeremy MacNealy has no financial interest in any company mentioned. The Motley Fool has an online disclosure policy that's not spoken but feel free to repeat it out loud.