In the six months to 30 June, turnover at the company, which broadcasts interactive music channels on Sky digital, rose to £4.4 million, up from £3.8m for the equivalent period in 2001.
The firm also reduced its pre-tax losses by £1m to £4.3m. It claims it now has £23.5m in cash and cash-equivalents.
Despite the current ad slowdown, the company entered iTV sponsorship trials with firms including publisher IPC and music events firm darkerthanblue, while brands including Durex, United International Pictures and mobile operator O2 bought advertising on its iTV service.
Mike Thomas, chairman of Music Choice Europe, said: "Despite ongoing difficult market conditions, Music Choice is still growing as a business."