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As long as you keep pumping out new readers, you'll see a rise in numbers, at least for a while. New readers means more gift items means more people buying content for their new readers. Kobo came out with two new readers this year -- Touch and Vox -- so they would have sold a fair bit of those, along with content, and boosted their.
But that's just revenues. Revenues are always positive, because they don't take into account how much you need to invest.
I'm not convinced this model works long term. Ideally, you put out a reader so that you can sell content for that reader. But Kindle, Kobo, Sony, etc. keep trying to one-up each other with new and inexpensive readers every six months, so these companies are investing a lot of money in hardware with low profit margins. As long as they do that, a company like Kobo will have trouble actually making money. (They were actually losing money prior to being sold by Indigo.)
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