Recently, two of my colleagues sparred over the prospects of software giant Oracle (NASDAQ:ORCL). While the debate continues, the company just released its third-quarter results. Does its latest performance tilt more toward the bullish argument, or the bearish?

On a non-GAAP basis, Oracle earned $0.19 per share, edging out analyst expectations of $0.18. This is partially because of fewer expenses than in the comparable period a year ago. While its cost of products sold as a percentage of total revenue remained virtually unchanged, operating margins benefited from fewer restructuring costs. The net effect is that operating income as a percentage of sales increased 15.4 percentage points to 30%.

Margins weren't the only area where there was double-digit improvement -- Oracle was able to increase its top line by 17.6%. Strong sales of application licenses spurred the growth. What's less than impressive is that the bread and butter of its business -- new database license revenue -- increased just 4%. In the conference call, management indicated that an unfavorable currency exchange was one reason for the lower-than-expected growth. CEO Larry Ellison did add that he expects double-digit growth to return to its core business with the release of new products carrying greater profitability.

With margins and sales making double-digit improvements, Oracle completed the trifecta by increasing free cash flow by 12.5% to $2.7 billion through nine months. With a run rate of free cash flow at roughly $3.6 billion for the year, Oracle has plenty of growth options available, whether it chooses to grow organically or through acquisitions -- like its $10.3 billion purchase of PeopleSoft or $5.9 billion buyout of Siebel.

Bull, bear, or otherwise, whatever your investment disposition is, you have to take notice of any enterprise with this kind of ability to generate cash. Oracle will continue using its cash flow for both acquisition-based and organic growth strategies to meet its goal of 20% annual earnings growth for the foreseeable future. And as it does, it should continue to remain very high on any Fool's list of potential long-term investment opportunities.

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Fool contributor Jeremy MacNealy does not own shares of any companies mentioned.