Their income apparatus seems to be "sing up for free". It's hard to charge for extra services, when your core product does almost everything already. Advertising doesn't really work, because their demographic groups are heavily leaned towards adblock usage.
Most of the content is indie music. The increased availability - since 1990s - of cheap music production tools has enabled everyone, and their dog, to make music recordings. The downside to that is that it has got a lot harder to find the quality after the quantity has exploded since. So, for discovery service SoundCloud fails. There should instead be a curated version with 1/1000th of the content left.
Then why many people really go to SoundCloud. They go for commercial pirated music, or "remixes" - whatever. I've seen many albums offered on SoundCloud. Even a small number generates serious amounts of site activity. I have not understood this either, because SoundCloud does not by default offer FLAC downloads, and there are better services for that stuff...