<PAGE>   1
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-Q

       [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934

              FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

              OR
       [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

                     FOR THE TRANSITION PERIOD FROM     TO

                        COMMISSION FILE NUMBER: 000-24931

                     SECURITY FIRST TECHNOLOGIES CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
                                        DELAWARE                         58-2395199
<S>                     <C>                                          <C>
                         (State or other jurisdiction of              (I.R.S. Employer
                          incorporation or organization)              Identification No.)
</TABLE>

<TABLE>
<CAPTION>
<S>                        <C>                                             <C>
                             3390 PEACHTREE ROAD, NE, SUITE 1700           
                                        ATLANTA, GEORGIA                        30326
                            (Address of principal executive offices)          (Zip Code)
</TABLE>



       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 812-6200


       Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

              Yes   X  . No     .
                  -----    -----

Shares of common stock outstanding as of May 10, 1999: 25,428,778


================================================================================




                                       1
<PAGE>   2



             SECURITY FIRST TECHNOLOGIES CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                             MARCH 31,         DECEMBER 31,
                                                                                              1999                1998
                                                                                        ------------------  -----------------
                                                                                              (IN THOUSANDS EXCEPT SHARE
                                                                                                  AND PER SHARE DATA)

                                                            ASSETS

 Current assets:

<S>                                                                                     <C>                 <C>
   Cash and cash equivalents                                                             $          22,803   $         14,504
   Investment securities available for sale (cost of $1,799 at
      March 31, 1999 and December 31, 1998)                                                          7,349              3,936
   Accounts receivable, net of allowance for doubtful accounts and billing 
      adjustments of $582 at March 31, 1999 and $415 at December 31, 1998                            7,593             17,520
   Other current assets                                                                              3,498              1,310
                                                                                        ------------------  -----------------
            Total current assets                                                                    41,243             37,270
   Premises and equipment, net                                                                       4,642              5,355
   Intangible assets, net                                                                            3,075              2,914
   Other assets                                                                                      1,266              2,754
                                                                                        ------------------  -----------------
            Total assets                                                                 $          50,226   $         48,293
                                                                                        ==================  =================


                                             LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
   Accounts payable                                                                      $             897   $          3,232
   Accrued expenses                                                                                  5,744              4,386
   Deferred revenues                                                                                13,151             10,378
   Current portion of capital lease obligation                                                         413                875
                                                                                        ------------------  -----------------
            Total current liabilities                                                               20,205             18,871
   Deferred revenues                                                                                11,753             12,034
   Capital lease obligation, excluding current portion                                                 107                159
                                                                                        ------------------  -----------------
            Total liabilities                                                                       32,065             31,064
                                                                                        ------------------  -----------------
 Stockholders' equity:
   Preferred stock, $0.01 par value. Authorized 5,000,000 shares                                    23,136             11,911
   Common stock, $0.01 par value.  Authorized 60,000,000
      shares.  Issued and outstanding 25,076,292 and 24,527,004
      shares at March 31, 1999 and December 31, 1998, respectively                                     251                246
   Additional paid-in capital                                                                       88,716             86,810
   Receivable from the sale of stock                                                               (11,065)                 -
   Accumulated deficit                                                                             (86,098)           (82,840)
   Accumulated other comprehensive income:
        Net unrealized gains on investment securities available for sale, net of
        taxes                                                                                        3,441              1,325
        Cumulative foreign currency translation adjustment                                            (220)              (223)
                                                                                        ------------------  -----------------
            Total stockholders' equity                                                              18,161             17,229
                                                                                        ------------------  -----------------
            Total liabilities and stockholders' equity                                   $          50,226   $         48,293
                                                                                        ==================  =================
</TABLE>



See accompanying notes to unaudited consolidated financial statements.



                                       2
<PAGE>   3



             SECURITY FIRST TECHNOLOGIES CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                          THREE MONTHS ENDED
                                                                               MARCH 31,

                                                               -----------------------------------------
                                                                      1999                1998
                                                               ------------------- --------------------
                                                                     (IN THOUSANDS EXECEPT SHARE
                                                                         AND PER SHARE DATA)

Revenues:
<S>                                                          <C>                   <C>  

     Software licenses                                           $           2,308    $              669                   
     Professional services                                                   8,145                 2,449
     Data center                                                             1,547                   310
                                                                ------------------- --------------------
           Total revenues                                                   12,000                 3,428
                                                                ------------------- --------------------
Direct costs:
     Software licenses                                                         133                    20
     Professional services                                                   5,322                 1,570
     Data center                                                             1,687                 1,823
                                                                ------------------- --------------------
           Total direct costs                                                7,142                 3,413
                                                                ------------------- --------------------
           Gross margin                                                      4,858                    15
Operating expenses:
     Selling and marketing                                                   1,079                 1,071
     Product development                                                     4,375                 3,383
     General and administrative                                              1,592                 1,204
     Depreciation and amortization                                           1,194                   637
     Amortization of goodwill and acquisition charges                          103                 2,088
                                                                ------------------- --------------------
           Total operating expenses                                          8,343                 8,383
                                                                ------------------- --------------------
           Operating loss                                                   (3,485)               (8,368)
Interest income                                                                227                   255
                                                                ------------------- --------------------
Loss from continuing operations                                             (3,258)              (8,113)
Loss from discontinued operations                                                 -                (465)
                                                                ------------------- --------------------


Net loss                                                          $         (3,258)   $          (8,578)
                                                                 ==================   ==================
Basic and diluted net loss per common share
     from continuing operations                                   $          (0.13)   $           (0.39)
Basic and diluted net loss per common share from
     discontinued operations                                                      -               (0.02)
                                                                ------------------- --------------------
Basic and diluted net loss per common share                       $          (0.13)   $           (0.41)
                                                                ===================  ===================
Weighted average number of shares of
     common stock outstanding                                            24,698,334           21,047,842
                                                                =================== ====================

</TABLE>

See accompanying notes to unaudited consolidated financial statements.



                                       3
<PAGE>   4


             SECURITY FIRST TECHNOLOGIES CORPORATION AND SUBSIDIARY
 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)

                    FOR THE THREE MONTHS ENDED MARCH 31, 1999
                                   (UNAUDITED)
                        (IN THOUSANDS EXCEPT SHARE DATA)


<TABLE>
<CAPTION>

                                                             CONVERTIBLE PREFERRED STOCK
                                   -------------------------------------------------------------------------------
                                            SERIES A                    SERIES B                  SERIES C
                                   --------------------------  -------------------------  ------------------------
                                      SHARES       AMOUNT        SHARES       AMOUNT        SHARES      AMOUNT
                                   --------------------------  -------------------------  -------------------------
<S>                                  <C>         <C>              <C>      <C>                 <C>      <C>

Balance December 31, 1998                  636,464   $   1,911       749,064  $   10,000            -     $     -

Net loss                                       -           -             -            -             -           -
Change in net unrealized gains
   on investment securities
   available for sale, net of taxes            -           -             -            -             -           -
Change in cumulative foreign
   currency translation
   adjustment, net of taxes                    -           -             -            -             -           -
Conversion of preferred stock
   to common stock                        (170,014)       (802)          -            -             -           -
Preferred stock issued                         -           -             -            -         215,000      12,027
Payment on receivable from
   the sale of stock                           -           -             -            -             -           -
Interest earned on receivable from
   the sale of stock                           -           -             -            -             -           -
Common stock issued upon
   exercise of stock options                   -           -             -            -             -           -
Change in deferred stock
     option compensation                       -           -             -            -             -           -
Comprehensive loss

                                     -------------------------  --------------------------  -----------------------
Balance March 31, 1999                     466,450   $   1,109       749,064  $    10,000       215,000    $ 12,027
                                     =========================  ==========================  =======================
</TABLE>

<TABLE>
<CAPTION>
                                           COMMON STOCK
                                     --------------------------
                                        SHARES       AMOUNT
                                     --------------------------

<S>                                  <C>             <C>
Balance December 31, 1998               24,527,004   $     245
Net loss                                         -           -
Change in net unrealized gains
   on investment securities
   available for sale, net of taxes              -           -
Change in cumulative foreign
   currency translation
   adjustment, net of taxes                      -           -
Conversion of preferred stock
   to common stock                         340,028           4
Preferred stock issued                           -           -
Payment on receivable from
   the sale of stock                             -           -
Interest earned on receivable from
   the sale of stock                             -           -
Common stock issued upon
   exercise of stock options               209,260           2
Change in deferred stock
     option compensation                         -           -
Comprehensive loss
                                     -------------------------
Balance March 31, 1999                  25,076,292    $    251
                                     =========================

</TABLE>

                                       4
<PAGE>   5


            SECURITY FIRST TECHNOLOGIES CORPORATION AND SUBSIDIARY
   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                    (LOSS)
                                 (CONTINUED)
                  FOR THE THREE MONTHS ENDED MARCH 31, 1999
                       (IN THOUSANDS EXCEPT SHARE DATA)



<TABLE>
<CAPTION>


                                                         RECEIVABLE                             ACCUMULATED
                                       ADDITIONAL         FROM THE                                 OTHER                TOTAL
                                        PAID-IN            SALE OF         ACCUMULATED         COMPREHENSIVE        STOCKHOLDERS'
                                        CAPITAL             STOCK            DEFICIT               INCOME               EQUITY
                                      -----------        ----------          -------            -----------         -------------
<S>                                 <C>                   <C>                <C>                  <C>               <C>            
Balance December 31, 1998               $    86,811        $        -         $  (82,840)              1,102        $      17,229
Net loss                                          -                 -             (3,258)                  -              (3,258)
Change in net unrealized gains
   on investment securities
   available for sale, net of taxes               -                 -                   -               2,114               2,114
Change in cumulative foreign
   currency translation
   adjustment, net of taxes                       -                 -                   -                   5                   5
Conversion of preferred stock
   to common stock                              798                 -                   -                   -                   -
Preferred stock issued                            -          (12,027)                   -                   -                   -
Payment on receivable from
   the sale of stock                              -               962                   -                   -                 962
Interest earned on receivable from
   the sale of stock                             80                 -                   -                   -                  80
Common stock issued upon
   exercise of stock options                    920                 -                   -                   -                 922
Change in deferred stock
option compensation                             107                                                         -                 107

Comprehensive loss

                                         -------------  ----------------       ---------------      --------------   ------------
Balance March 31, 1999                   $   88,716       $   (11,065)         $  (86,098)          $   3,221              18,161
                                         -------------  ----------------       ---------------       -------------   ------------

</TABLE>

<TABLE>
<CAPTION>



                                          COMPREHENSIVE
                                             INCOME
                                           ------------

<S>                                       <C>
Balance December 31, 1998                    $    (3,258)
Net loss
Change in net unrealized gains
   on investment securities                         2,114
   available for sale, net of taxes
Change in cumulative foreign
   currency translation                                 5
   adjustment, net of taxes
Conversion of preferred stock
   to common stock
Preferred stock issued
Payment on receivable from
   the sale of stock
Interest earned on receivable from
   the sale of stock
Common stock issued upon
   exercise of stock options
Change in deferred stock
  option compensation          
                                          ----------------
                                             $     (1,139)
Comprehensive loss                        ----------------


Balance March 31, 1999

</TABLE>

See accompanying notes to unaudited consolidated financial statements.



                                       5
<PAGE>   6





            SECURITY FIRST TECHNOLOGIES CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                             THREE MONTHS ENDED
                                                                                                  MARCH 31,
                                                                                   --------------------------------------
                                                                                         1999                   1998
                                                                                   ----------------       ---------------
                                                                                               (IN THOUSANDS)
<S>                                                                              <C>                     <C> 


Cash flows from operating activities:
     Net loss                                                                     $          (3,258)      $        (8,578)
     Adjustments to reconcile net loss to net cash provided by (used in)
       operating activities:
           Loss from discontinued operations                                                       -                   465
           Depreciation and amortization including acquisition charges                         1,297                 2,725
           Compensation expense for stock options                                                107                   706
           Provision for doubtful accounts receivable and billing adjustments                    490                    30
           Decrease (increase) in accounts receivable                                          9,437                 (914)
           Increase in other assets                                                            (704)                 (365)
           (Decrease) increase in accounts payable                                           (2,335)                 1,181
           Increase in accrued expenses                                                           59                    19
           Increase (decrease) in deferred revenue                                             2,492                 (241)
                                                                                   -----------------      ----------------
               Net cash provided by (used in) continuing operating activities                  7,585               (4,972)
     Net cash used in discontinued operations                                                      -                  (39)
                                                                                   -----------------      ----------------
                                                                                               7,585               (5,011)
                                                                                   -----------------      ----------------
Cash flows from investing activities:
     Sales of investment securities available for sale                                             -                 1,983
     Maturities of investment securities available for sale                                        -                 2,000
     Purchases of premises, equipment and purchased technology                                 (741)                 (585)
                                                                                   -----------------      ----------------
               Net cash (used in) provided by investing activities                             (741)                 3,398
                                                                                   -----------------      ----------------
Cash flows from financing activities:
     Payment on subscription receivable                                                          962                     -
     Sale of common stock, net of expenses                                                         -                   970
     Proceeds from exercise of stock options                                                     922                    23
     Payments on capital lease obligations                                                     (514)                     -
     Interest income on receivable from sale of stock                                            80
                                                                                   -----------------      ----------------
               Net cash provided by financing activities                                       1,450                   993
                                                                                   -----------------      ----------------
Effect of exchange rate changes on cash                                                            5                   (3)
                                                                                   -----------------      ----------------
Net increase in cash                                                                           8,299                 (623)
Cash and cash equivalents at beginning of period                                              14,504                 3,137
                                                                                    ----------------       ---------------
Cash and cash equivalents at end of period                                           $        22,803        $        2,514
                                                                                    ================       ===============

</TABLE>

See accompanying notes to unaudited consolidated financial statements.





                                       6
<PAGE>   7

             SECURITY FIRST TECHNOLOGIES CORPORATION AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.     BASIS OF PRESENTATION

       Security First Technologies Corporation, through its wholly-owned
subsidiary Security First Technologies, Inc. (collectively, "S1" or the
"Company"), develops integrated internet software applications that enable
financial service companies to offer products, services and transactions over
the internet in a secure environment. S1 also offers product integration,
training and data center processing services.

       Security First Technologies Corporation is the successor company to
Security First Network Bank ("SFNB") as a result of the reorganization completed
on September 30, 1998. The reorganization has been accounted for in a manner
similar to a pooling of interests and, as a result, the historical financial
statements of SFNB have become the historical financial statements of the
Company.

       The consolidated financial statements include the accounts of Security
First Technologies Corporation and its wholly owned subsidiary, Security First
Technologies, Inc. Significant intercompany accounts and transactions have been
eliminated in consolidation. The consolidated financial statements for the three
month period ended March 31, 1999 and 1998 are unaudited and do not include
information or footnotes necessary for a complete presentation of financial
condition, results of operations and cash flows. The interim financial
statements include all adjustments, consisting only of normal recurring
adjustments, which in the opinion of management are necessary to present fairly
the Company's consolidated financial statements. The results of operations for
the three months ended March 31, 1999 are not necessarily indicative of the
expected results for the year ending December 31, 1999.

       On April 14, 1999, the board of directors approved a 2-for-1 stock split
of the Company's common stock payable on May 7, 1999 to holders of record on
April 26, 1999. All share and per share data have been adjusted retroactively to
reflect the split.

2.     STOCK PURCHASE AND WARRANT AGREEMENTS

       On February 19,1999, S1 entered into alliances with Hewlett-Packard and
Andersen Consulting. As part of these alliances, Hewlett-Packard agreed to make
a $10.0 million equity investment in the Company's common stock and Andersen
Consulting agreed to make a $4.0 million equity investment in the Company's
common stock. In addition, Andersen Consulting received warrants to purchase up
to an additional 200,000 shares of S1 common stock. The warrant will vest, if at
all, in three installments of 40,000, 80,000 and 80,000 shares only if the
Company enters into agreements to sell its services or license its products to
specified customers as a result of its relationship with Andersen Consulting.
The warrant expires in February 2001. The per share price of the common stock
issuable to Andersen Consulting is $54.94 and the warrant installment is
available for exercise for a period of two years after the vesting date. The
Company expects to record a non-cash charge for the fair value of each warrant
installment which will be measured at the reporting date in which achievement of
the targets is probable. The fair value will be remeasured at each subsequent
reporting date until the installment is earned. In the event such remeasurement
results in increases or decreases from the initial fair value, such increases or
decreases will be recognized over the period that the installment is earned.

       On February 25, 1999, the Company entered into an agreement with Royal
Bank of Canada ("Royal Bank") under which Royal Bank agreed to implement the
Company's entire suite of Virtual Financial Manager software. Royal Bank has
agreed to pay $50.0 million to the Company over the next five years on the
following schedule: the first $5.0 million, of which $4.0 million was paid upon
execution of the contract, is due to be paid no later than February 2000, and
the remaining amounts are to be paid equally over a four year period after Royal
Bank has implemented Virtual Financial Manager. If Royal Bank terminates its
minimum payment obligation, it is required to pay a termination fee equal to 40%
of the unpaid amount. In connection with this agreement, the Company also issued
215,000 shares of a newly designated series of convertible preferred stock
(Series C) and granted to Royal Bank a warrant

                                       7
<PAGE>   8
exercisable for 800,000 shares of common stock at a price of $30.00 per share.
The preferred stock will be convertible on a two-for-one basis into the
Company's common stock if Royal Bank meets its $50.0 million commitment under
the software license and development agreement. The warrant will vest in four
equal installments if, as of four annual measurement dates beginning one year
after the S1 products are implemented, Royal Bank has an additional one
million end users using the Virtual Financial Manager software.

       The Company recorded a subscription receivable of $12.0 million, the
estimated fair value of the convertible preferred stock at issuance, and will
reduce such subscription receivable, including imputed interest, as the payments
under the arrangement are received. Additionally, the Company expects to record
a non-cash charge for the fair value of the warrants on the date when it becomes
probable that the warrants will become exercisable.

3.     SUBSEQUENT EVENTS

       On April 14, 1999, the board of directors approved a 2-for-1 stock split
of the Company's common stock payable on May 7, 1999 to holders of record on
April 26, 1999. All share and per share data have been adjusted retroactively to
reflect the split.

       On April 30, 1999, the Company entered into a seven year operating lease
for a total of 71,000 square feet of data center and office space. The minimum
annual payments under the lease are $609,000 in 1999, $1.2 million in 2000, $1.3
million in 2001, $1.3 million in 2002, $1.3 in 2003 and $3.8 million in years
thereafter.

       On April 30, 1999, the Company received $14.0 million and issued 254,804
shares of common stock to Andersen Consulting and Hewlett Packard to complete
the sale of stock described above.

       On May 17, 1999, Security First Technologies Corporation ("S1") announced
transactions with Intuit Inc. ("Intuit"), Edify Corporation ("Edify") and FICS
Group N.V. ("FICS").

       In the Intuit transaction, S1 and Intuit, including its affiliates,
announced that the companies entered into a strategic alliance to deliver
on-line personal financial software and services to financial institutions. S1
and Intuit also entered into a Stock Purchase and Option Agreement pursuant to
which Intuit agreed to purchase 970,813 shares of S1 common stock for $50.0
million, and S1 granted an option for as many as 5,429,187 additional shares if
the Edify and FICS transactions close by March 31, 2000.

       In the FICS transaction, S1 entered into a Share Purchase Agreement
pursuant to which an S1 Belgian subsidiary will acquire FICS. S1 also entered
into a Stock Purchase Agreement pursuant to which the stock and option holders
of S1 will acquire up to 20,000,000 shares of S1 common stock. The FICS
transaction is subject to applicable regulatory filings and notices, as well as
approval by the stockholders of S1 and customary closing conditions. The
acquisition of FICS by the Belgian subsidiary of S1 also is subject to the
subsidiary obtaining financing for the acquisition.

       In the Edify transaction, S1 entered into an Agreement and Plan of
Merger (the "Merger Agreement") by which S1 will acquire Edify in a
stock-for-stock exchange (the "Merger"). S1 will issue 0.330969 shares for each
share of Edify stock. The Merger is subject to applicable stockholder approvals
of both S1 and Edify and applicable regulatory filings and notices, as well as
customary closing conditions. Edify also granted to S1 a stock option for newly
issued shares of Edify stock (the "Option Agreement").

4.     EARNINGS PER SHARE

       Basic earnings per share is calculated as income available to common
stockholders divided by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is calculated to reflect the
potential dilution that would occur if stock options or other contracts to issue
common stock were exercised and resulted in additional common stock that would
share in the earnings of the Company. Because of the Company's net losses, the
issuance of additional shares of common stock under stock options and warrants
or upon the conversion of preferred stock would be antidilutive. The total
number of common shares that would have been included in the Company's
computation of diluted earnings per share if they had been dilutive at March 31,
1999 was 11,330,778.

5.     SEGMENT REPORTING

       S1 operates in three business segments, Professional Services, Data
Center and Product Development. The Professional Services segment provides
integration, training, consulting and product enhancement services related to
S1's software products. The Product Development segment creates new products to
supplement the existing product suite. The Data Center segment provides
processing and support services to the customers using S1's software products in
the S1 data center. S1 manages the business based on these operating segments.
The information presented in the consolidated statements of operations reflects
the revenues and costs associated with these segments that management uses to
make operating decisions and assess performance.

       S1 evaluates the performance of its Professional Services and Data Center
operating segments based on revenues and direct costs only. S1 evaluates the
performance of its Product Development segment based on direct costs only. S1
does not assess the performance of its segments on other measures of income or
expense, such as depreciation and amortization, operating income or net income.
In addition, as the assets of S1 are primarily located in its corporate office
in the United States and not allocated to any specific segment, the Company does
not produce reports that measure the performance based on any asset-based
metrics.

       For the three months ended March 31, 1999 three major customers accounted
for approximately 44%, 17% and 12% of total revenues, respectively.


                                       8
<PAGE>   9


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

       This quarterly report contains forward-looking statements and information
relating to us and our subsidiary. The words "believes," "expects," "may,"
"will," "should," "projects," "contemplates," "anticipates," "forecasts,"
"intends" or similar terminology identify forward-looking statements. These
statements are based on the beliefs of management as well as assumptions made
using information currently available to management. Because these statements
reflect the current views of management concerning future events, they involve
risks, uncertainties and assumptions. Therefore, actual results may differ
significantly from the results discussed in the forward-looking statements. We
undertake no obligation to update publicly any forward-looking statement for any
reason, even if new information becomes available.

       The following discussion should be read in conjunction with the unaudited
consolidated financial statements and notes appearing elsewhere herein and the
Company's Form 10-K for the year ended December 31, 1998.

GENERAL

       Security First Technologies Corporation, commonly known as S1, develops
integrated, brandable internet applications that enable companies offering
financial services to create their own financial portals. Prior to September 30,
1998, we were the technology subsidiary of Security First Network Bank, which
was the first internet bank. On September 30, 1998, we completed a
reorganization to separate our banking and technology businesses, and then sold
the banking business to a subsidiary of Royal Bank of Canada. S1 developed the
technology which enabled Security First Network Bank to begin offering banking
services over the internet. We released version 4.0 of our product in 1998 and
intend to continue our product development efforts, which include the
introduction of version 5.0.

Revenues

       S1's revenues are derived primarily from three sources:

       Software licenses. S1 receives license fees from direct licensees of
Virtual Financial Manager and third party data processors. Direct licensees
install and operate Virtual Financial Manager in their own data center. S1
generally receives an initial license fee plus ongoing fees which are based on
either the number of end-users or a percentage of the initial license fee. The
initial software license fees are generally recognized as revenue on a
straight-line basis over either the term of the agreement or, for contracts
without a term, the estimated useful life of the software products. The ongoing
fees are recognized as revenue in the month earned.

       Third party data processors install Virtual Financial Manager in their
own data processing centers and license the product to their client
institutions, typically smaller financial services entities like community banks
and thrifts. S1 receives monthly fees from third party data processors based on
the total number of end-users served by the processors' client institutions.
These fees are recognized as revenue in the period earned.

       Professional Services. S1 provides professional services related to the
installation and integration of Virtual Financial Manager. These services
include:

- installing the product at direct licensees and third party data processing
centers,

- integrating the financial institution's data processing systems with the S1
data center for data center clients,

- product enhancements,

- consulting, and

- training.



                                       9
<PAGE>   10

       Customers are charged and revenues are recognized for these services
primarily on a time and materials basis. These revenues are recognized as the
services are performed.

       Data Center. S1 receives recurring monthly fees from financial
institutions who have chosen to license S1's Virtual Financial Manager and
outsource the processing of their financial transactions to the S1 data center.
The monthly fees are based on the number of end-users of the client institution,
subject to a minimum monthly fee. In addition, S1 receives monthly fees for
technical support. These revenues are generally recognized as the services are
performed.



                                       10
<PAGE>   11

RESULTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE, PER AVERAGE CUSTOMER, END-USER AND END-USER
ACCOUNTS)

<TABLE>
<CAPTION>
                                                                                                   QUARTER ENDED
                                                                                              3/31/98            6/30/98
                                                                                            -----------        -----------
<S>                                                                                       <C>              <C>
 REVENUES:
      Software licenses                                                                     $       669      $         770
      Professional services                                                                       2,449              3,185
      Data center                                                                                   310                594
                                                                                            ------------     --------------
            Total revenues                                                                        3,428              4,549
                                                                                            ------------     --------------
 DIRECT COSTS:
      Software licenses                                                                              20                 20
      Professional services                                                                       1,570              2,230
      Data center                                                                                 1,823              1,825
                                                                                            ------------     --------------
            Total direct costs                                                                    3,413              4,075
                                                                                            ------------     --------------
            Gross margin                                                                             15                474
                                                                                            ------------     --------------
 OPERATING EXPENSES:
      Selling and marketing                                                                       1,071              1,137
      Product development                                                                         3,383              3,607
      General and administrative                                                                   1,204              1,236
      Depreciation and amortization                                                                 637                652
      Amortization of goodwill and acquisition charges                                            2,088              2,083
                                                                                            ------------     --------------
            Total operating expenses                                                              8,383              8,715
                                                                                            ------------     --------------
            Operating loss                                                                       (8,368)           (8,241)
Interest income                                                                                      255               135
                                                                                            ------------     --------------
 LOSS FROM CONTINUING OPERATIONS                                                            $    (8,113)     $     (8,106)
                                                                                            ------------     --------------
 NET LOSS PER COMMON SHARE:
      Loss per common share from continuing operations before
          non-recurring charges, goodwill amortization and acquisition charges              $     (0.29)     $      (0.28)
      Loss per common share from non-recurring charges
          and goodwill amortization and acquisition charges                                       (0.10)            (0.10)
                                                                                            ------------     --------------
      Loss per common share from continuing operations                                      $     (0.39)     $      (0.38)
                                                                                            ------------     --------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                                       21,048            21,526
                     
 DATA CENTER REVENUE PER QUARTERLY AVERAGE CUSTOMERS                                        $       9.64     $       13.34
 PROFESSIONAL SERVICES REVENUE PER AVERAGE SERVICES FTE(1)                                  $         52     $          42
 CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS                                           $    (4,972)     $     (3,980)
 CASH AND INVESTMENT SECURITIES                                                             $     15,352     $       8,971
                     
 NUMBER OF END-USERS:
      Data center                                                                                 44,000            58,100
      Third party data processors                                                                  2,000             4,000
      Direct software licensees                                                                    5,800            40,000
                                                                                            ------------     --------------
          Total                                                                                   51,800           102,100
                                                                                            ------------     --------------
 NUMBER OF END-USER ACCOUNTS:
      Data center                                                                                 69,400             94,600
      Third party data processors                                                                  4,400              8,400
      Direct software licensees                                                                   26,200            160,000
                                                                                            ------------     --------------
          Total                                                                                  100,000            263,000
                                                                                            ------------     --------------
(1) Excludes revenue from pass through costs.

</TABLE>



<TABLE>
<CAPTION>
                                                                                                    QUARTER ENDED
                                                                                               9/30/98               12/31/98
                                                                                             -----------           ------------
<S>                                                                                    <C>                    <C>
 REVENUES:
      Software licenses                                                                  $         1,069          $      2,273
      Professional services                                                                        4,549                 6,035
      Data center                                                                                    927                 1,350
                                                                                         ----------------         ------------
            Total revenues                                                                         6,545                 9,658
                                                                                         ----------------         ------------
 DIRECT COSTS:
      Software licenses                                                                               20                   443
      Professional services                                                                        2,806                 3,921
      Data center                                                                                  1,937                 1,633
                                                                                         ----------------         ------------
            Total direct costs                                                                     4,763                 5,997
                                                                                         ----------------         ------------
            Gross margin                                                                           1,782                 3,661
                                                                                         ----------------         ------------
 OPERATING EXPENSES:
      Selling and marketing                                                                          955                 1,560
      Product development                                                                          3,717                 3,918
      General and adminstrative                                                                    1,370                 2,184
      Depreciation and amortization                                                                  761                 3,297
      Amortization of goodwill and acquisition charges                                               110                   103
                                                                                         ----------------         ------------
            Total operating expenses                                                               6,913                11,062
                                                                                         ----------------         ------------
            Operating loss                                                                       (5,131)               (7,401)
Interest income                                                                                       52                   141
                                                                                         ----------------         ------------
 LOSS FROM CONTINUING OPERATIONS                                                         $       (5,079)         $     (7,260)
                                                                                         ----------------         ------------
 NET LOSS PER COMMON SHARE:
      Loss per common share from continuing operations before
          non-recurring charges, goodwill amortization and acquisition charges           $       (0 .22)         $      (0.20)
      Loss per common share from non-recurring charges
          and goodwill amortization and acquisition charges                                      (0 .01)                (0.11)
                                                                                           ----------------         ------------
      Loss per common share from continuing operations                                   $       (0 .23)         $      (0.31)
                                                                                           ----------------         ------------
 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                                       22,351                23,194

 DATA CENTER REVENUE PER QUARTERLY AVERAGE CUSTOMERS                                     $         14.75         $       15.21
 PROFESSIONAL SERVICES REVENUE PER AVERAGE SERVICES FTE(1)                               $            54         $          50
 CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS                                        $           595         $     (3,547)
 CASH AND INVESTMENT SECURITIES                                                          $        17,779         $      14,504

 NUMBER OF END-USERS:
      Data center                                                                                 77,000                93,000
      Third party data processors                                                                  7,500                16,000
      Direct software licensees                                                                   67,000               104,000
                                                                                           ----------------         ------------
          Total                                                                                  151,500               213,000
                                                                                           ----------------         ------------
 NUMBER OF END-USER ACCOUNTS:
      Data center                                                                                128,000               148,000
      Third party data processors                                                                 15,000                42,000
      Direct software licensees                                                                  244,000               352,000
                                                                                           ----------------         ------------
          Total                                                                                  387,000               542,000
                                                                                           ----------------         ------------
(1) Excludes revenue from pass through costs.

</TABLE>

<TABLE>
<CAPTION>

                                                                                            QUARTER ENDED
                                                                                                3/31/99
                                                                                              ----------
 <S>                                                                                      <C>
 REVENUES:                                                                               
      Software licenses                                                                     $      2,308
      Professional services                                                                        8,145
      Data center                                                                                  1,547
                                                                                            ------------
            Total revenues                                                                        12,000
                                                                                            ------------
 DIRECT COSTS:
      Software licenses                                                                              133
      Professional services                                                                        5,322
      Data center                                                                                  1,687
                                                                                            ------------
            Total direct costs                                                                     7,142
                                                                                            ------------
            Gross margin                                                                           4,858
                                                                                            ------------
 OPERATING EXPENSES:
      Selling and marketing                                                                        1,079
      Product development                                                                          4,375
      General and adminstrative                                                                    1,592
      Depreciation and amortization                                                                1,194
      Amortization of goodwill and acquisition charges                                               103
                                                                                            ------------
            Total operating expenses                                                               8,343
                                                                                            ------------
            Operating loss                                                                       (3,485)
Interest income                                                                                      227
                                                                                            ------------
 LOSS FROM CONTINUING OPERATIONS                                                           $     (3,258)
                                                                                            ------------
 NET LOSS PER COMMON SHARE:
      Loss per common share from continuing operations before
          non-recurring charges, goodwill amortization and acquisition charges             $     (0.13)
      Loss per common share from non-recurring charges
          and goodwill amortization and acquisition charges                                           -
                                                                                            ------------
      Loss per common share from continuing operations                                     $     (0.13)
                                                                                            ------------
 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                                      24,698
 
 DATA CENTER REVENUE PER QUARTERLY AVERAGE CUSTOMERS                                       $      15.99
 PROFESSIONAL SERVICES REVENUE PER AVERAGE SERVICES FTE(1)                                 $         59
 CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS                                          $      7,585
 CASH AND INVESTMENT SECURITIES                                                            $     22,803
 
 NUMBER OF END-USERS:
      Data center                                                                               100,200
      Third party data processors                                                                24,000
      Direct software licensees                                                                 139,000
                                                                                            ------------
          Total                                                                                 263,200
                                                                                            ------------
 NUMBER OF END-USER ACCOUNTS:
      Data center                                                                               161,000
      Third party data processors                                                                62,000
      Direct software licensees                                                                 469,000
                                                                                            ------------
          Total                                                                                 692,000
                                                                                            ------------
(1) Excludes revenue from pass through costs.
</TABLE>




                                       11
<PAGE>   12


                       SUMMARY INCOME STATEMENT ANALYSIS 
                      (AS A PERCENTAGE OF TOTAL REVENUES)
<TABLE>
<CAPTION>
                                                                                         QUARTER ENDED
                                                             3/31/98        6/30/98         9/30/98       12/31/98       3/31/99
                                                           ------------  ------------    ------------   ------------   -----------
 <S>                                                       <C>           <C>             <C>            <C>             <C>
 REVENUES:
      Software licenses                                            20%            17%            16%            24%            19%
      Professional services                                        71%            70%            70%            62%            68%
      Data center                                                   9%            13%            14%            14%            13%
                                                           ------------  ------------    ------------   ------------   -----------
            Total revenues                                        100%           100%           100%           100%           100%
                                                           ------------  ------------    ------------   ------------   -----------
 DIRECT COSTS:
      Software licenses                                             1%             0%             0%             5%             1%
      Professional services                                        46%            49%            43%            41%            44%
      Data center                                                  53%            40%            30%            17%            14%
                                                           ------------  ------------    ------------   ------------   -----------
            Total direct costs                                    100%            90%            73%            62%            60%
                                                           ------------  ------------    ------------   ------------   -----------
            Gross margin                                            0%            10%            27%            38%            40%
                                                           ------------  ------------    ------------   ------------   -----------
 OPERATING EXPENSES:                                                       
      Selling and marketing                                        31%            25%            15%            16%             9%
      Product development                                          99%            79%            57%            41%            36%
      General and adminstrative                                    35%            27%            21%            23%            13%
      Depreciation and amortization                                19%            14%            12%            34%            10%
      Amortization of goodwill and acquisition charges             61%            46%             2%             1%             1%
                                                           ------------  ------------  -------------   ------------   -------------
            Total operating expenses                              245%           192%           106%           115%            70%
                                                           ------------  ------------  -------------   ------------   -------------
            Operating loss                                       -244%          -181%           -78%           -77%           -29%
                                                           ------------  ------------  -------------  ------------   -------------

</TABLE>

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998

Revenues

       S1's total revenues increased by $8.6 million to $12.0 million for the
three months ended March 31, 1999 from $3.4 million in the three months ended
March 31, 1998, an increase of 250%. The primary components of first quarter
1999 revenue were $2.3 million in software license fees, $8.2 million in
professional service fees and $1.5 million in data center fees. As a result of
the size of the companies S1 does business with, the magnitude of the
implementations for companies of this size and our limited amount of capacity to
perform implementations, in any given period a significant portion of our
revenues may be attributed to a limited number of clients. For the three months
ended March 31, 1999 three major customers accounted for approximately 44%, 17%
and 12% of total revenues, respectively.

       Software Licenses. Software license fees increased by $1.6 million to
$2.3 million in the three months ended March 31, 1999 from $669,000 in the three
months ended March 31, 1998, an increase of 245%. Software license fees
represented 19% of total revenues in the three months ended March 31, 1999
compared to 20% of total revenues in the three months ended March 31, 1998. This
increase in software license fees relates primarily to the recognition of
revenue from licensing agreements entered into in the fourth quarter of 1998.
These license fees have been recorded as deferred revenue and are recognized as
revenue over a three-year maintenance period. S1 expects to experience a slight
decrease in software license revenues in the second quarter 1999 as certain
licenses were completely recognized by the end of the first quarter 1999.

       Professional Services. Professional services revenues increased by $5.7
million to $8.2 million in the three months ended March 31, 1999 from $2.4
million in the three months ended March 31, 1998, an increase of 233%.
Professional services revenues represented 68% of total revenues in the three
months ended March 31, 1999 compared to 71% of total revenues in the three
months ended March 31, 1998. This increase in professional services revenue in
the first quarter 1999 was driven by projects at a number of large financial
services companies and upgrades to version 4.0. Additionally, included in first
quarter 1999 is approximately $2.3 million of revenue for professional services
related to product enhancement projects, which include the initial development
of an insurance product.

                                       12
<PAGE>   13

       Data Center. Data center revenues increased by $1.2 million to $1.5
million in the three months ended March 31, 1999 from $310,000 in the three
months ended March 31, 1998, an increase of 399%. Data center revenues
represented 13% of total revenues in the three months ended March 31, 1999
compared to 9% of total revenues in the three months ended March 31, 1998. This
increase can be attributed to increased end-users using S1's internet financial
applications, the initiation of minimum fees based on capacity requirements and
increased support fees. The average quarterly revenue per billable end-user
increased to $15.99 in the first quarter 1999 from $9.64 in the first quarter
1998. Management anticipates that the average quarterly revenue per billable
end-user will decrease as financial services entities increase the number of
their customers using the product.

       Revenues associated with the data center are directly influenced by the
number of financial services entities that are using Virtual Financial Manager
products through the S1 data center and the number of end-users of these
financial services entities. During the month of March 1999, the data center
processed in excess of 161,000 internet accounts, representing approximately
100,000 end-users. This represents an increase of 133% in the number of accounts
processed from approximately 69,000 and an increase of 127% in the number of
end-users from approximately 44,000 for the month of March 1998. At March 31,
1999, there were 12 financial services organizations implemented in the S1 data
center.

Direct Costs

       Direct costs increased by $3.7 million to $7.1 million in the three
months ended March 31, 1999 from $3.4 million in the three months ended March
31, 1998, an increase of 109%. Direct costs represented 60% of total revenues in
the year ended March 31, 1999 compared to 100% of total revenues in the year
ended March 31, 1998.

       Software License Costs. Direct software license costs consist primarily
of the cost of third-party software used in the Virtual Financial Manager suite.
Direct costs associated with software licenses increased by $113,000 to $133,000
in the three months ended March 31, 1999 from $20,000 in the three months ended
March 31, 1998, a increase of 565%. The increase in direct software license
costs in the first quarter 1999 relates primarily to the cost of third-party
software used in VFM Relationship Management. Direct costs associated with
software licenses represented 6% of software license fees in the three months
ended March 31, 1999 compared to 3% of software license fees in the three months
ended March 31, 1998.

       Professional Services Costs. Direct professional services costs consist
primarily of personnel and related infrastructure costs. Direct costs associated
with professional services increased by $3.7 million to $5.3 million in the
three months ended March 31, 1999 from $1.6 million in the three months ended
March 31, 1998, an increase of 239%. The increase is the result of an increase
in personnel costs related to the professional services projects. Currently, S1
is in the process of converting all financial services entities to Virtual
Financial Manager version 4.0. These conversions will require a significant
portion of S1's implementation resources. Direct costs associated with
professional services represented 65% of professional services revenues in the
three months ended March 31, 1999 compared to 64% of professional services
revenues in the three months ended March 31, 1998.

       Data Center Costs. Direct data center costs consist of personnel and
computer equipment costs. Direct costs associated with data center services
decreased by $136,000 to $1.7 million in the three months ended March 31, 1999
from $1.8 million in the three months ended March 31, 1998, a decrease of 7%. In
an effort to contain data center costs, S1 ended its data center facilities
management agreement with a third party in the fourth quarter of 1998. The
decrease in direct data center costs is primarily attributable to the cost
savings from both the elimination of the cost-plus arrangement and the ability
to more efficiently use the existing infrastructure. Based on current costs,
management anticipates that the data center will reach a break-even gross margin
in the second quarter of 1999. Direct data center costs represented 109% of data
center revenues in the three months ended March 31, 1999 compared to 588% of
data center revenues in the three months ended March 31, 1998. On April 30,
1999, S1 entered into an operating lease for data center and office facilities.
The data center operations will be transitioned to the new location during the
third quarter of 1999 which is anticipated to result inan increase in data
center costs in the third quarter as a result of the relocation.

                                       13
<PAGE>   14

Operating Expenses

       Operating expenses decreased by $40,000 to $8.3 million in the three
months ended March 31, 1999 from $8.4 million in the three months ended March
31, 1998, a decrease of less than 1%.

       Selling and Marketing. Selling and marketing expenses remained consistent
between the first quarter 1998 and 1999 at $1.1 million. Selling and marketing
expenses were 9% of total revenues in the three months ended March 31, 1999
compared to 31% of total revenues in the three months ended March 31, 1998. The
decrease in selling and marketing expenses as a percentage of sales was due to
S1's ability to leverage its relatively fixed selling and marketing expenses
over a larger revenue base.

       Product Development. Product development expenses increased by $992,000
to $4.4 million in the three months ended March 31, 1999 from $3.4 million in
the three months ended March 31, 1998, an increase of 29%. Product development
expenses were 36% of total revenues in the three months ended March 31, 1999
compared to 99% of total revenues in the three months ended March 31, 1998. The
dollar increase relates primarily to an increase in personnel expenses for
additional product development initiatives. During the first quarter 1999, S1's
development efforts included the next version of the VFM platform, additional
integration capabilities, Bill Presentment, the next version of Investments and
Business Banking. The decrease as a percentage of S1's total revenues in the
three months ended March 31, 1999 from the three months ended March 31, 1998
resulted from its ability to leverage product development expenses over a larger
revenue base.

       General and Administrative. General and administrative expenses increased
by $388,000 million to $1.6 million in the three months ended March 31, 1999
from $1.2 million in the three months ended March 31, 1998, an increase of 32%.
General and administrative expenses were 13% of total revenues in the three
months ended March 31, 1999 compared to 35% of total revenues in the three
months ended March 31, 1998. The increase relates to the expanded personnel
infrastructure to manage S1's growth. The decrease as a percentage of our total
revenues in the three months ended March 31, 1999 from the three months ended
March 31, 1998 resulted from its ability to leverage general and administrative
expenses over a larger revenue base.

       Depreciation and Amortization. Depreciation and amortization expenses
increased by $557,000 to $1.2 million in the three months ended March 31, 1999
from $637,000 in the three months ended March 31, 1998, an increase of 87%.
Depreciation and amortization expenses were 10% of total revenues for the three
months ended March 31, 1999 compared to 19% of total revenues in the three
months ended March 31, 1998. The increase in depreciation and amortization
related to purchased technology for development tools used by S1's product
developers and development licenses for the integration of third party software
with S1's VFM suite.

       Amortization of Goodwill. Amortization of goodwill and acquisition
charges decreased $2.0 million to $103,000 in the three months ended March 31,
1999 from $2.1 million in the three months ended March 31, 1998, a decrease of
95%. Amortization of goodwill and acquisition charges were 1% of total revenues
in the three months ended March 31, 1999 compared to 61% of total revenues in
the three months ended March 31, 1998. Included in first quarter 1998 is
amortization of intangible assets related to an acquisition in 1997 which is not
included in the first quarter 1999 as these amounts were fully amortized during
1998.

LIQUIDITY AND CAPITAL RESOURCES

       Total stockholders' equity increased to $18.2 million as of March 31,
1999 from $17.2 million at December 31, 1998. The increase in stockholders'
equity is attributable to the increase in the unrealized gain on investment
securities available for sale, stock option exercises and compensation, offset
by the first quarter net loss of $3.3 million.

       As part of the Royal Bank agreements signed in March 1998, S1 issued to
Royal Bank's subsidiary four separate options to purchase up to an aggregate
$10.0 million in capital stock of S1. The first option, which was exercised in
December 1998 for 420,876 shares, had a per share exercise price of $5.94. The
second option has a per share exercise price of $6.54 and expires at the end of
June 1999. The third option has a per share exercise price of $7.19 and expires
at the end of December 1999. The fourth option has a per share exercise price of
$7.91 and expires at the



                                       14
<PAGE>   15

end of June 2000. If the second, third and fourth options are exercised in full,
S1 will issue an additional 1,046,760 shares of stock for $7.5 million in cash
over the remaining option period.

       At March 31, 1999, S1 had $22.8 million in cash to fund future operations
and $7.6 million in accounts receivable. On February 19, 1999, S1 entered into a
stock purchase agreement with Hewlett Packard to purchase $10 million of the
Company's common stock. In addition, on February 19, 1999 S1 entered into a
stock purchase agreement with Andersen Consulting to purchase $4 million of S1's
common stock. On April 30, 1999, the Company issued 254,804 shares of common
stock and received $14.0 million to complete the stock sales to Hewlett-Packard
and Andersen Consulting. Cash provided by operations for the first quarter 1999
was $7.6 million compared to cash used in continuing operations of $5.0 million
in comparable period in 1998. Included in the first quarter 1999 cash from
operations is $3 million for license fees. Management believes that S1 has
adequate cash resources available to fund operations through the next twelve
months.

       On February 19, 1999, S1 granted a warrant to Andersen Consulting to
purchase up to 200,000 shares of S1 common stock. The warrant will vest, if at
all, in three installments of 40,000, 80,000 and 80,000 shares only if S1 enters
into agreements to sell its services or license its products to specified
customers as a result of the relationship with Andersen Consulting. The warrant
expires in February 2001. The per share price of the common stock issuable to
Andersen Consulting is $54.94 and the warrant installment is available for
exercise for a period of two years after the vesting date.

       The Company expects to record a non-cash charge for the fair value of
each warrant installment which will be measured at the reporting date in which
achievement of the targets is probable. The fair value will be remeasured at
each subsequent reporting date until the installment is earned. In the event
such remeasurement results in increases or decreases from the initial fair
value, such increases or decreases will be recognized over the period that the
installment is earned. The amount of the non-cash charges in any particular
quarter associated with the grant of the warrant to Andersen Consulting could be
significant as a result of future changes in the trading price of the Company's
common stock at the end of each quarter and at the date each installment is
earned.

       On February 25, 1999, S1 entered into an agreement with Royal Bank under
which Royal Bank agreed to implement S1's entire suite of Virtual Financial
Manager software. Royal Bank has agreed to pay $50.0 million over the next five
years on the following schedule: the first $5.0 million, of which $4.0 million
was paid upon execution of the contract, is due to be paid no later than
February 2000, and the remaining amounts are to be paid equally over a four year
period after Royal Bank has implemented Virtual Financial Manager. In connection
with this agreement, S1 also issued 215,000 shares of a newly designated series
of convertible preferred stock (Series C) and granted to Royal Bank a warrant
exercisable for 800,000 shares of common stock at an exercise price of $30.00
per share. The preferred stock will be convertible on a two-for-one basis into
S1's common stock if Royal Bank meets its $50.0 million commitment under the
software license and development agreement. The warrant will vest in four equal
installments if, as of four annual measurement dates, Royal Bank has a specified
number of customers using the Virtual Financial Manager software.

       The Company recorded a subscription receivable of $12.0 million, the
estimated fair value of the convertible preferred stock at issuance, and will
reduce such subscription receivable, including imputed interest, as the payments
under the arrangement are received. Additionally, the Company expects to record
a non-cash charge for the fair value of the warrants on the date when it becomes
probable that they will become exercisable.

       Basic earnings per share is calculated as income available to common
stockholders divided by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is calculated to reflect the
potential dilution that would occur if stock options or other contracts to issue
common stock were exercised and resulted in additional common stock that would
share in the earnings of the Company. Because of the Company's net losses, the
issuance of additional shares of common stock under stock options and warrants
or upon the conversion of preferred stock would be antidilutive. The total
number of common shares that would have been included in the Company's
computation of diluted earnings per share if they had been dilutive at March 31,
1999 was 11,330,778.


                                       15
<PAGE>   16


YEAR 2000 READINESS DISCLOSURE STATEMENT

       The year 2000 issue relates to the use by many existing computer programs
of only two digits to identify a year in the date field. If not corrected, many
computer applications could fail or create erroneous results by or at the year
2000. S1 recognizes the need to ensure that potential year 2000 software
failures will not adversely impact its operations. The year 2000 issues impact
S1 both on an external basis in connection with the products and services S1
offers to clients, as well as on an internal basis as to its own operations and
systems.

       As to external year 2000 issues related to the products and services S1
offers to clients, a company-wide task force, with representation from all major
business units, was established by S1 in 1997 to evaluate and manage the risks,
solutions and cost associated with addressing this issue. The Task Force has
identified all business systems, products and services, including third party
software used by S1 and in conjunction with Virtual Financial Manager, has made
an initial assessment as to whether they are year 2000 compliant, and is
implementing actions for the systems, products and services which are not year
2000 compliant. S1 believes that based on the assessments completed to date,
that material year 2000 issues can be corrected. The failure of S1 or
third-party software which is used by S1 or in conjunction with Virtual
Financial Manager to be year 2000 compliant could have a material adverse impact
on S1's financial position and results of operations.

       S1 developed its newest version of the Virtual Financial Manager
software, version 4.0, which was released in 1998, to be year 2000 compliant.
Extensive "time machine" testing has been conducted on Virtual Financial Manager
and all of the underlying software products that it utilizes. As we implement
this new version of Virtual Financial Manager for each of our clients, we also
will conduct complete "end to end" testing. At March 31, 1999, 50% of client
systems requiring upgrades to version 4.0 were completed. Management anticipates
that all clients will be converted to the new version, with testing completed,
by third quarter 1999. Any failure to complete the conversions in a timely
manner could have a material adverse effect on S1's business. These conversions
will require a significant portion of S1's implementation resources.

       Because S1 is a relatively new enterprise, without old legacy and other
computer systems, the year 2000 issues with respect to S1's internal operations
and systems are not as complex as might otherwise be the case. S1's Task Force
has developed and implemented a strategy to minimize the impact of year 2000
technology problems. S1's strategic plan includes regular reporting of progress
to S1's management and board of directors.

       Under the direction of its Task Force, S1 believes it has identified all
hardware, software, networks and other processing platforms, and customer and
vendor dependencies affected by the year 2000 date change. The assessment
included information systems as well as environment systems that are dependent
on embedded microchips, such as security systems, elevators, and telephone
systems. S1 has completed activities related to the assessment phase. While the
assessment phase is essentially complete, S1 will continue to revisit all third
party suppliers throughout 1999 to insure that previously acquired compliance
statements have not changed.

       The next phase of the Task Force's plan is a renovation phase which has
been underway since early in 1998. The majority of S1's internal and vendor
systems were year 2000 ready by March 31, 1999, with the remainder targeted for
completion by the second quarter of 1999. All desktop systems have been tested
with failing systems scheduled for replacement. Upgrades for critical financial
and other infrastructure systems have been completed. As to S1's systems which
are vendor supplied, S1 has either had the vendor confirm year 2000 readiness,
or has made plans to replace the system.

       The Task Force has commenced a testing phase of S1's internal systems,
including testing of incremental changes to hardware and software components.
The testing phase is expected to be completed by June 30, 1999, but will
continue as needed on newly acquired applications and new vendor upgrades.

       The costs incurred in addressing the year 2000 problem are being expensed
as incurred in compliance with generally accepted accounting principles. None of
these costs are expected to materially impact the results of operations in any
one period. Significant portions of the costs to be incurred are not expected to
be incremental but rather are related to current development efforts.

                                       16
<PAGE>   17








        S1 has identified and evaluated potential year 2000 related worst case 
scenarios that could result from the failure to identify, test, and validate
all critical date dependent applications and embedded microchips that affect
core business processes and the failure of external forces, such as third party
vendors and utilities, to have properly remedied their systems. Potential worst
case scenarios being addressed include the inability to service customers
through S1's data center, the failure of Virtual Financial Manager, extended
electrical power outages, extended telephone communication outages, ACH and
payroll deposit file transmission difficulties and excessive negative media
coverage.

       A contingency plan is being drafted by S1 to address identified potential
worst case scenarios. Alternative solutions for business resumption and
approaches to minimize the impact of each scenario are being formulated. Any
unaddressed year 2000 issue could adversely affect S1's business, financial
condition and results of operations.




                                       17
<PAGE>   18

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       Quantitative and qualitative disclosures about market risk were included
in Item 7A of the Security First Technologies Corporation's 1998 Form 10-K.
There have been no significant changes in the Company's market risk from
December 31, 1998.


                                       18
<PAGE>   19



                           PART II - OTHER INFORMATION
        
ITEM 1.     LEGAL PROCEEDINGS.

            Not applicable.
       
ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.

      (a)   Not applicable.


      (b)   Not applicable.

      (c)   All share and price information which follows has been adjusted for
a two-for-one split of S1's common stock paid on May 7, 1999.

       On February 19, 1999, S1 issued to Anderson Consulting LLP a Warrant to
purchase 200,000 shares of S1's common stock for a price per share of $54.94.
The rights represented by the Warrant are contingent upon the vesting
requirements set forth in section 1 of the Warrant, a copy of which is filed as
Exhibit 10.4 to this report and incorporated herein by reference.

       On February 25, 1999, S1 issued to Royal Bank of Canada a Warrant to
purchase 800,000 shares of S1's common stock at a price per share of $30.00. The
rights represented by the Warrant are contingent on the number of Warrant
Customers, as more particularly described in section 1 of the Warrant, a copy of
which is filed as Exhibit 10.5 to this report and incorporated herein by
reference.

       On February 25, 1999, S1 issued to Royal Bank of Canada 215,000 shares of
S1's series C redeemable convertible preferred stock for a purchase price of
$0.01 per share. Each share of series C preferred stock is convertible into two
shares of S1's common stock contingent upon satisfaction of the terms and
conditions specified in Section 3 of the Certificate of Designation for the
series C preferred stock, which is filed as Exhibit 3 to this report and
incorporated herein by reference. The offer and sale of the stock satisfied the
requirements of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act") (transactions by an issuer not involving any public offering).

       On April 30, 1999, S1 issued to Hewlett-Packard Company 182,004 shares of
S1's common stock for an aggregate purchase price of $10.0 million pursuant to
a Stock Purchase Agreement, dated as of February 19, 1999, by and between S1 and
Hewlett Packard, as amended on April 30, 1999, a copy of which is filed as
Exhibit 10.2 to this report. The offer and sale of the stock satisfied the
requirements of Section 4(2) of the Securities Act (transactions by an issuer
not involving any public offering).

       On April 30, 1999, S1 issued to AC II Technology (ACT II) B.V. ("AC II")
72,800 shares of S1's common stock for an aggregate purchase price of $4.0
million pursuant to a Stock Purchase Agreement, dated as of February 19, 1999,
by and between S1 and ACT II, as amended on April 30, 1999, a copy of which is
filed as Exhibit 10.3 to this report. The offer and sale of the stock satisfied
the requirements of Section 4(2) of the Securities Act (transactions by an
issuer not involving any public offering).

      (d)   Not applicable.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

      Not applicable.


                                       19
<PAGE>   20


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      Not applicable.

ITEM 5.     OTHER INFORMATION.

      None.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.



(a)   Exhibits.



      Exhibit
      No.         Description
      ---         -----------
      3           Certificate of Designation for Series C Redeemable
                  Convertible Preferred Stock of Security First Technologies
                  Corporation ("S1").

      4           Specimen certificate for S1's Series C Redeemable
                  Convertible Preferred Stock.

      10.1        Registration Rights Agreement, dated as of February 25,
                  1999, by and among S1, Royal Bank of Canada and RBC
                  Holdings (Delaware) Inc.

      10.2        Stock Purchase Agreement, dated as of February 19, 1999, by
                  and between S1 and Hewlett-Packard Company, as amended on
                  April 30, 1999.

      10.3        Stock Purchase Agreement, dated as of February 19, 1999, by
                  and between S1 and AC II Technology (ACT II) B.V., as
                  amended on April 30, 1999.

      10.4        Warrant, dated February 19, 1999, issued to Andersen
                  Consulting LLP.

      10.5        Warrant, dated February 25, 1999, issued to Royal Bank of
                  Canada.

      27          Financial Data Schedule

(b)   Reports on Form 8-K.

       No reports on Form 8-K were filed by the registrant during the quarter
for which this report is filed.



                                       20
<PAGE>   21





                                   SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, as of May 14, 1999.

                                       SECURITY FIRST TECHNOLOGIES
                                       CORPORATION

                                     By: /s/ ROBERT F. STOCKWELL
                                         -----------------------
                                         Robert F. Stockwell
                                         Chief Financial Officer and Treasurer
                                         (Principal Financial Officer and
                                         Principal Accounting Officer)

                                      21
<PAGE>   22
                                 EXHIBIT INDEX


Exhibit                
No.            Description


3              Certificate of Designation for Series C Redeemable Convertible
               Preferred Stock of Security First Technologies
               Corporation ("S1").

4              Specimen certificate for S1's Series C Redeemable Convertible
               Preferred Stock.

10.1           Registration Rights Agreement, dated as of February 25, 1999, by
               and among S1, Royal Bank of Canada and RBC Holdings (Delaware) 
               Inc.

10.2           Stock Purchase Agreement, dated as of February 19, 1999, by 
               and between S1 and Hewlett-Packard Company, as amended on
               April 30, 1999.

10.3           Stock Purchase Agreement, dated as of February 19, 1999, by 
               and between S1 and AC II Technology (ACT II) B.V., as amended on 
               April 30, 1999.

10.4           Warrant, dated February 19, 1999, issued to Andersen 
               Consulting LLP.

10.5           Warrant, dated February 25, 1999, issued to Royal Bank of 
               Canada.

27             Financial Data Schedule