Spotify reported its revenues rose 11% for the second quarter as surging monthly active users and growth in premium subscribers tamped down costs from staff cuts in the previous three months.

The company’s total revenue €3.2 billion ($3.53 billion) was up 11% from the year ago quarter, or up 14% in constant currency, a measure that strips out the effects of foreign exchange fluctuations. Monthly active users, or the total number of unique visitors to Spotify every month, rose 27% to 551 million in the quarter, while the number of premium subscribers grew 17% to 220 million, up a net of 10 million in the quarter.

The growth in premium subscribers modestly beat company guidance by 3 million and was enough to offset quarterly operating losses of €247 million ($272.7 million), as the company incurred numerous one-time costs related to staffing and cuts to its podcast programs meant to reduce long-term expenses.

Spotify’s executives will discuss the quarter’s earnings — and the impact of the recently announced premium subscription price increases — in greater detail on a call with investors at 8 a.m. EST.

The company reported gross margin of 24.1%, below its guidance of 25.5%. When adjusted to strip out one-time expenses related to cost cuts in the quarter, Spotify said its margin was in-line with guidance at 25.5%.

  • Spotify’s monthly active users were up 27% to 551 million, well above the company’s 530 million target. 
  • Premium subscribers rose 17% to 220 million, beating company expectations of 217 million premium subscribers for the quarter.
  • Total revenue rose 11% to €3.2 billion ($3.53 billion) and met the company’s internal targets. 
  • Adjusted Operating Loss of €112 million was better than guidance, excluding charges related to actions in the quarter to streamline operations and reduce costs.

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