Technology companies across the industry have scurried to tap into the investment potential of cloud computing, and OpenText (NASDAQ: OTEX) has worked hard to offer enterprise customers a better solution for managing and taking full advantage of the information that they accumulate in the course of their day-to-day operations. That's been a high-growth business, especially given the rising demand for cloud-based solutions that can take the place of expensive and complicated in-house tech alternatives.

Coming into Wednesday's fiscal second-quarter financial report, OpenText shareholders were optimistic about the company's ability to keep delivering growth. Yet even some bullish investors were pleasantly surprised at the results that the company achieved. Let's look more closely at OpenText and what its latest results mean for the cloud company going forward.

Image source: OpenText.

Things look sunny for OpenText

OpenText's fiscal second-quarter results added to the success the company has already achieved. Total revenue soared 35% to $734.7 million, easily outpacing the 27% growth rate that most investors expected to see and even outrunning the growth rate that OpenText hit in the fiscal first quarter. Adjusted operating income was up an even healthier 45% to $267.9 million, and that produced adjusted earnings of $0.76 per share, up more than 40% from year-earlier figures and crushing the consensus forecast for $0.63 per share.

Fundamentally, OpenText kept seeing all the right trends continue. Revenue from recurring sources rose at a 31% clip, as customer support revenue growth again was primarily responsible for the top-line rise. Yet cloud services and subscriptions grew 19%, picking up the pace from a more sluggish fiscal first quarter. A big jump in professional services revenue contributed to the company's overall gains, as did solid rises in license revenue.

OpenText also kept its eye on containing costs, and its efforts showed up in improving margin figures. Gross margin rose just a fraction of a percentage point from the year-ago quarter, but adjusted operating margin soared by 2.5 percentage points to 36.5%. Costs like research and development, sales and marketing, and general overhead grew from year-earlier levels, but the pace of that growth was slower than OpenText's overall revenue.

Large customer transaction counts rebounded from a tough quarter three months ago. OpenText counted 30 transactions for more than $1 million, split almost evenly between cloud and on-premises projects. Most of the demand for services came from the financial, consumer goods, services, and technology sectors, as well as public sector customers.