New figures show 5.38 million passengers used the service – an increase on the 4.92 million who got on board during its first year.
The controversial line marked its second birthday at the end of last month. It was officially launched at 5am on Saturday, 31 May, 2014.
Transport bosses said the passenger numbers were around 340,000 ahead of target.
They also insisted the service had raked in 6 per cent more revenue than expected – with full details of the company’s performance due to be released in the summer.
Tram general manager Lea Harrison said: “The trams are a convenient, comfortable and cost-effective way of travelling through the city and we’re delighted to see this reflected in our passenger figures.
“We’ll continue to introduce further improvements to encourage even more travellers to hop on board.”
Concessionary card holders currently account for 8.2 per cent of passengers, which bosses argue is well within the council’s budget.
The trams recently received a 97 per cent overall customer satisfaction rating following an independent UK wide survey by Passenger Focus, operating with 99 per cent service reliability.
A good year was topped off when the service picked up a Certificate of Excellence from travel review site TripAdvisor.
George Lowder, chief executive of Transport for Edinburgh, said the results were “hugely encouraging”.
He added: I am extremely grateful to all the staff at Edinburgh Trams for their dedication and hard work that provides such an excellent service as recorded in the 2015 Passenger Focus Survey and by Trip-Advisor. We are concentrating this year on enhancement of the existing service and are certainly not going to be complacent.”
Lesley Hinds, chairwoman of Transport for Edinburgh and the city council’s transport leader, said: “There is no doubt Edinburgh Trams is going from strength to strength, as these latest passenger figures show, alongside consistently high customer satisfaction ratings. “