Dell Technologies (DELL:US) has posted second-quarter earnings that significantly exceeded expectations, with strong growth attributed to increased service and software maintenance agreements. 

For the second quarter, Dell reported an adjusted earnings per share (EPS) of $1.74 on revenue of $22.93 billion. These figures outperformed estimates, which had projected earnings of $1.14 and revenue of $20.86 billion, respectively.

"Our Q2 performance underscores the power of our model to generate cash in a sequential growth environment," said Yvonne McGill, chief financial officer, Dell Technologies. "We continue to deliver value to shareholders and have flexibility to increase our return of capital going forward."

A notable driver of Dell's growth was recurring revenue, which rose by 8% year-over-year to reach $5.6 billion in the second quarter. This increase was attributed to higher demand for service and software maintenance agreements.

Additionally, Dell revealed that it had returned $525 million to shareholders during the second quarter through share repurchases and dividends. Second quarter cash flow from operations stood at $3.2 billion.

Dell also reported robust demand for its AI server solutions on the earnings log, with a backlog exceeding $2 billion. These comments indicate strong interest and orders for their AI-focused hardware offerings, underlining the growing importance of AI in various industries.

Congressman Ro Khanna was selling DELL shares earlier this year. The stock is up more than 66% year-to-date.