<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549
               -------------------------------------------------

                                   FORM 10-Q
                                  (Mark one)

          [X]  Quarterly report pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934

                    FOR THE QUARTER ENDED DECEMBER 31, 1996

          [_]  Transition report pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934


                        Commission file number 0-26948

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

                            SCOPUS TECHNOLOGY, INC.
            (Exact name of registrant as specified in its charter)

                  CALIFORNIA                                     94-3134998
          (State or other jurisdiction of                     (IRS Employer
         incorporation or organization)                      Identification No.)



                          1900 POWELL ST., 7TH FLOOR
                             EMERYVILLE, CA  94608
              (Address of principal executive offices & zip code)
                                        
                REGISTRANT'S TELEPHONE NUMBER:  (510)-597-5800

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

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 
                                   ---    ---
                                        
 There were 13,420,435 shares of the registrant's $.001 par value Common Stock
                      outstanding as of December 31,1996.

                                 Page 1 of 19
<PAGE>
 
                            SCOPUS TECHNOLOGY, INC.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
PART I.   FINANCIAL INFORMATION
 
     Item 1.   Financial Statements
 
          Condensed Consolidated Balance Sheets                              3
 
          Condensed Consolidated Statements of Operations                    4
 
          Condensed Consolidated Statements of Cash Flows                    5
 
          Notes to Condensed Consolidated Financial Statements               6
 
 
     Item 2.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations                           7

PART II.  OTHER INFORMATION
 
     Item 6.   List of Exhibits and Reports on Form 8-K                     16
 
SIGNATURES                                                                  17
 
INDEX TO EXHIBITS                                                           18
 
                                 Page 2 of 19
</TABLE> 
<PAGE>

                            Scopus Technology, Inc.
                     Condensed Consolidated Balance Sheets
                                (in Thousands)
<TABLE>
<CAPTION>
                                                     March 31,       December 31,
                                                       1996             1996
                                                                     (Unaudited)
------------------------------------------------------------------------------------
<S>                                                   <C>            <C>
Assets

Current assets:
    Cash and cash equivalents                          $21,792        $ 68,455
    Investments                                          7,462          10,769
    Accounts receivable, net                             7,530          14,557
    Prepaid expenses and other                             648           1,179
    Deferred income taxes                                  574           1,103
------------------------------------------------------------------------------------
      Total current assets                              38,006          96,063
Property and equipment, net                              2,734           5,994
Other assets                                               841           1,677
------------------------------------------------------------------------------------
         Total assets                                  $41,581        $103,734
------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
    Accounts payable                                   $ 1,561        $  3,011
    Accrued liabilities                                  2,544           6,110
    Income taxes payable                                   740           1,918
    Deferred revenue                                     3,270           4,316
------------------------------------------------------------------------------------
      Total current liabilities                          8,115          15,355
Deferred tax liabilities                                    11              -
------------------------------------------------------------------------------------
      Total liabilities                                  8,126          15,355
------------------------------------------------------------------------------------
Shareholders' equity:
    Common stock and paid-in capital                    29,681          79,596
    Retained earnings                                    3,774           8,783
------------------------------------------------------------------------------------
      Total shareholders' equity                        33,455          88,379
------------------------------------------------------------------------------------
         Total liabilities and shareholders' equity    $41,581        $103,734
------------------------------------------------------------------------------------
</TABLE>

                            See accompanying notes

                                 Page 3 of 19
<PAGE>

                            Scopus Technology, Inc.
                Condensed Consolidated Statement of Operations
                     (in Thousands, except per share data)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                              Three Months Ended           Nine Months Ended
                                                 December 31,                December 31,
                                              1995         1996             1995        1996
--------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>            <C>            <C>
Revenues:
        Licenses                             $ 5,206        $13,005        $12,910        $30,429
        Services and maintenance               2,198          4,818          6,543         11,198
--------------------------------------------------------------------------------------------------------
                Total revenues                 7,404         17,823         19,453         41,627
--------------------------------------------------------------------------------------------------------
Cost of revenues:
        Licenses                                 131            465            757          1,304
        Services and maintenance               1,404          3,069          5,431          7,247
--------------------------------------------------------------------------------------------------------
                Total cost of revenues         1,535          3,534          6,188          8,551
--------------------------------------------------------------------------------------------------------
Gross margin                                   5,869         14,289         13,265         33,076
Operating expenses:
        Sales and marketing                    2,954          6,832          7,005         16,535
        Research and development               1,583          2,315          3,866          6,175
        General and administrative               583          1,372          1,336          3,422
--------------------------------------------------------------------------------------------------------
                Total operating expense        5,120         10,519         12,207         26,132
--------------------------------------------------------------------------------------------------------
Income from operations                           749          3,770          1,058          6,944
Other income, net                                118            431            169          1,007
--------------------------------------------------------------------------------------------------------
Income before income taxes                       867          4,201          1,227          7,951
Provision for income taxes                       320          1,541            453          2,942
--------------------------------------------------------------------------------------------------------
Net income                                   $   547        $ 2,660        $   774        $ 5,009
--------------------------------------------------------------------------------------------------------
Net income per share                         $  0.05        $  0.20        $  0.07        $  0.39
--------------------------------------------------------------------------------------------------------
Shares used in per share computations         11,531         13,474         10,530         13,030
--------------------------------------------------------------------------------------------------------
</TABLE>

                            See accompanying notes

                                 Page 4 of 19
<PAGE>


                            Scopus Technology, Inc.
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)
                                (in Thousands)
<TABLE>
<CAPTION>
                                                                  Nine Months Ended
                                                                    December 31,
                                                                  1995        1996
--------------------------------------------------------------------------------------
<S>                                                             <C>          <C>        
Cash flows from operating activities:                                                   
  Net income                                                     $   774      $ 5,009   
  Adjustments to reconcile net income to net cash provided                              
    by (used in) operating activities:                                                  
    Depreciation and amortization                                    651        1,433   
    Noncash charges (credits), net                                  (122)       1,405   
    Changes in assets and liabilities:                                                  
      Increase in accounts receivable                             (4,955)      (7,028)  
      Increase in prepaid expenses and other                        (576)      (1,449)  
      Increase in deferred income taxes                              (62)        (446)  
      Increase in accounts payable                                   862        1,450   
      Increase in accrued liabilities                                741        3,566   
      Increase in income taxes payable                               124        1,168   
      Increase in deferred revenue                                 2,832        1,046   
--------------------------------------------------------------------------------------
Net cash provided by operating activities                            269        6,154   
--------------------------------------------------------------------------------------
Cash flows from investing activities:                                                   
  Purchase of investments                                         (1,736)      (6,011)  
  Proceeds from sale of investments                                  555        2,700   
  Purchase of property and equipment                              (1,081)      (4,627)  
  Proceeds from disposal of property and equipment                    15            4   
--------------------------------------------------------------------------------------
Net cash used in investing activities                             (2,247)      (7,934)  
--------------------------------------------------------------------------------------
Cash flows from financing activities:                                                   
  Proceeds from issuance of common stock, net                     24,049       48,443   
--------------------------------------------------------------------------------------
Net cash provided by financing activities                         24,049       48,443   
--------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                         22,071       46,663   
Cash and cash equivalents at beginning of period                   3,001       21,792   
--------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                       $25,072      $68,455    
--------------------------------------------------------------------------------------
</TABLE>

                            See accompanying notes

                                 Page 5 of 19
<PAGE>
 
                            SCOPUS TECHNOLOGY, INC.
           NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1.   BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared on the same basis as the audited annual consolidated financial
statements and, in the opinion of management, include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position, results of operations and cash flows.
The results of operations for the three and nine months ended December 31, 1996,
are not necessarily indicative of the results to be expected for the full year.
Certain information and footnote disclosures normally contained in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the Notes to Consolidated
Financial Statements contained in Scopus Technology, Inc.'s Report on 10-K for
the year ended March 31, 1996.

NOTE 2.   PUBLIC OFFERINGS

In November 1995, Scopus Technology, Inc. (the "Company"), completed an initial
public offering of 2,760,000 shares of common stock at $12.00 per share. Of
this, 2,225,000 shares were issued and sold by the Company and 535,000 shares 
were sold by selling shareholders.  The Company received net proceeds of
approximately $23.9 million.

In November 1996, the  Company, completed a public offering of 2,300,000 shares
of common stock at $37.50 per share. Of this, 1,347,000 shares were issued and 
sold by the Company and 953,000 shares were sold by selling shareholders.  The
Company received net proceeds of approximately $47.1 million.

NOTE 3.   INCOME TAXES

As a result of employee stock option exercises during the nine months ended
December 31, 1996, the Company recognized a $386,000 and $1,341,000 tax benefit
for the three and nine months ended December 31, 1996, respectively. This
benefit was credited directly to shareholders' equity and, accordingly, was not
reflected in the income tax provision.

NOTE 4.   SUBSEQUENT EVENT

On January 22, 1997, the Company announced a three-for-two split of the
Company's Common Stock, to be effected in the form of a stock dividend (the 
"Stock Split").  The dividend will be paid on or about February 19, 1997 to
stockholders of record on February 7, 1997.  The accompanying unaudited 
condensed consolidated financial statements have not been adjusted to reflect 
the Stock Split.

                                 Page 6 of 19
<PAGE>
 
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements that involve risks and
uncertainties. The statements contained in this report that are not purely
historical are forward looking statements within in the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including without limitation statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. All
forward looking statements included in this report are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward looking statements. The Company's actual
results could differ materially from those anticipated in these forward looking
statements as a result of certain factors, including those set forth below,
under "Overview", under "Other Factors that may Affect Future Results" and
elsewhere in this report.


OVERVIEW

The Company's quarterly operating results have varied substantially in the past
and are likely to vary substantially from quarter to quarter in the future due
to a variety of factors. In particular, the Company's period-to-period operating
results are significantly dependent upon the timing of the closing of large
license agreements. In this regard, the purchase of the Company's products can
require a significant capital investment from a potential customer which the
customer generally views as a discretionary cost that can be deferred or
canceled due to budgetary or other business reasons. Estimating future revenues
is also difficult because the Company ships its products soon after an order is
received and as such does not have a significant backlog. Thus, quarterly
license revenues are heavily dependent upon orders received and shipped within
the same quarter. Moreover, the Company has generally recorded a significant
portion of its total quarterly revenues in the third month of a quarter, with a
concentration of these revenues in the last half of that third month. This
concentration of revenues is influenced by customer tendencies to make
significant capital expenditures at the end of a fiscal quarter. The Company
expects these revenue patterns to continue for the foreseeable future. In
addition, quarterly license revenues are also dependent on the timing of revenue
recognition, which can be affected by many factors, including the timing of
customer installations and the fulfillment of acceptance criteria. In this
regard the Company has from time to time experienced delays in recognizing
revenues with respect to certain orders. Despite the uncertainties in its
revenue patterns, the Company's operating expenses are based upon anticipated
revenue levels and such expenses are incurred on an approximately ratable basis
throughout the quarter. As a result, if expected revenues are deferred or
otherwise not realized in a quarter for any reason, the Company's business,
operating results and financial condition would be materially adversely
affected.

In recent periods, the Company has sought to increase the use of third party 
consultants and system integrators to provide implementation, customization and 
consulting services directly to the Company's customers.  The Company's 
increasing reliance on such third party consultants and systems integrators 
poses several risks that could have a material adverse effect on the Company's 
business, operating results and financial condition.  For example, there can be 
no assurance that these third party providers, who have direct obligations to 
the Company's customers, will be able to continue to provide a level of quality 
of service required to meet the needs of such customers.  If the Company is 
unable to develop further and to maintain effective, long-term relationships 
with these third parties, or if these third parties fail to meet the needs of 
the Company's customers in a timely fashion, the Company's business, operating 
results and financial conditions will be materially and adversely affected.

                                 Page 7 of 19
<PAGE>
 
RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain condensed
consolidated statement of operations data expressed as a percentage of total
revenues:

                            Scopus Technology, Inc.
                Condensed Consolidated Statement of Operations
                     (In Thousands, except per share data)
                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                    Three Months Ended        Nine Months Ended
                                       December 31,              December 31,
                                    1995        1996          1995         1996   
---------------------------------------------------------------------------------
<S>                                <C>         <C>           <C>          <C> 
Revenues:
   Licenses                         70.3%       73.0%         66.4%        73.1% 
   Services and maintenance         29.7        27.0          33.6         26.9
---------------------------------------------------------------------------------
      Total revenues               100.0       100.0         100.0        100.0
---------------------------------------------------------------------------------
Cost of revenues:
   Licenses                          1.7         2.6           3.9          3.1
   Services and maintenance         19.0        17.2          27.9         17.4
---------------------------------------------------------------------------------
      Total cost of revenues        20.7        19.8          31.8         20.5
---------------------------------------------------------------------------------
Gross margin                        79.3        80.2          68.2         79.5
Operating expenses:
   Sales and marketing              39.9        38.3          36.0         39.7
   Research and development         21.4        13.0          19.9         14.8
   General and administrative        7.9         7.7           6.9          8.3
---------------------------------------------------------------------------------
      Total operating expenses      69.2        59.0          62.8         62.8
---------------------------------------------------------------------------------
Income from operations              10.1        21.2           5.4         16.7
Other income, net                    1.6         2.4           0.9          2.4
---------------------------------------------------------------------------------
Income before income taxes          11.7        23.6           6.3         19.1
Provision for income taxes           4.3         8.6           2.3          7.1
---------------------------------------------------------------------------------
Net income                           7.4%       15.0%          4.0%        12.0%
---------------------------------------------------------------------------------
</TABLE> 

 Revenues

     The Company recognizes revenue in accordance with the provisions of
Statement of Position 91-1 "Software Revenue Recognition."  The Company
generates revenue primarily from licensing the rights to use its software
products to end users and to a lesser extent from sublicense fees from
resellers.  The Company also generates revenues from consulting, training and
maintenance services performed for customers who license its products.

     Revenues from perpetual software license agreements are recognized as
revenue upon receipt of an executed license agreement, (or an unconditional
purchase order under an existing license agreement), and shipment of the
software, if there is no significant post-delivery obligations and collection of
the receivables is probable.

     Revenues from maintenance services are recognized ratably over the term of
the maintenance periods which is typically one year.  If maintenance services
are included free of charge or discounted in a license agreement, such amounts
are unbundled from the license fee at their fair market value based upon the
value established by independent sales of such maintenance services to
customers.

                                 Page 8 of 19
<PAGE>
 
     Consulting and training revenues are generally recognized as the services
are performed.  Consulting services are typically performed under separate
service agreements and are usually performed on a time and materials basis.  
Such services primarily consist of implementation services related to the
installation of the Company's products and do not include significant
customization to or development of the underlying software code.

     Licenses.  License revenues increased 150% from $5.2 million for the three
months ended December 31, 1995 to $13.0 million for the three months ended
December 31, 1996, representing 70% and 73% of total revenues in the respective
periods.  License revenues also increased 136% from $12.9 million for the nine
months ended December 31, 1995 to $30.4 million for the nine months ended
December 31, 1996, representing 66% and 73% of total revenues in the respective
periods.  The increase in license revenues was primarily due to increasing
market awareness and acceptance of the Company's product offerings, continuing
enhancement and increasing breadth of the Company's product offerings, expansion
of the Company's sales and marketing organization and sales to new industry
segments.  The increase in license revenues as a percentage of total revenues
during both the three and nine month periods reflects the Company's continued
focus on the product side of its business and the increased use of outside third
party consulting firms to provide implementation services directly to the
Company's customers.

     Services and Maintenance.  Services and maintenance revenues increased 119%
from $2.2 million for the three months ended December 31, 1995  to $4.8 million
for the three months ended December 31, 1996, representing  30% and 27% of total
revenues in the respective periods.  Services and maintenance revenues also
increased 71% from $6.5 million for the nine months ended December 31, 1995 to
$11.2 million for the nine months ended December 31, 1996, representing 34% and
27% of total revenues in the respective periods.  The decrease in services and
maintenance revenues as a percentage of total  revenues reflects the Company's
increased use of outside third party consulting firms to provide implementation
services directly to the Company's customers and increased out of the box
functionality of the Company's products which results in less implementation
services related to certain customer installations.

 Cost of Revenues

     Licenses.  Cost of licenses consist primarily of royalty payments to third
party software vendors and costs of product media, duplication and packaging.
Cost of licenses increased from $131,000 for the three months ended December 31,
1995 to $465,000 for the three months ended December 31, 1996, representing 3%
and 4% of license revenues respectively. Cost of licenses increased from
$757,000 for the nine months ended December 31, 1995 to $1.3 million for the
nine months ended December 31, 1996, representing 6% and 4% of license revenues
in the respective periods.  The increase in cost of licenses in absolute dollars
for the three months ended December 31, 1996 and as a percentage of license
revenues is primarily a result of higher royalty fees paid to third party
software vendors because of a higher level of sales of third party software
during the period compared to the same period in the prior year.  Although the
Company does not expect revenues and costs from the distribution of third party
software vendors to be significant in future periods, period to period
fluctuations in the level of such revenues may occur and the Company's gross
margins and results of operations could be materially adversely affected.

     Services and Maintenance.  Cost of services and maintenance increased from
$1.4 million and $5.4 million for the three month and nine month periods ended
December 31, 1995 to $3.1 million and $7.2 million for the comparable periods in
1996.  Cost of services and maintenance revenues as a percentage of services and
maintenance revenues were 64% and 83% for the three month and nine month periods
ended December 31, 1995 compared to 64% and 65% for the comparable periods in
the current fiscal year.  The decrease in cost of services and maintenance as
percentage of services and maintenance revenues reflects improvements in
productivity and efficiencies in both the professional service and technical
support organizations.  Additionally, maintenance revenues as a percentage of
total services and maintenance revenues increased during the three and nine
month periods ended December 31, 1996 and costs associated with providing
maintenance services are generally lower as a percentage of revenues than the
costs associated with consulting services.

 Operating expenses

     Sales and Marketing.  Sales and marketing expenses increased from $3.0
million and $7.0 million for the three and nine month periods ended December 31,
1995 to $6.8 and $16.5 for the comparable periods in 1996.  Sales and

                                 Page 9 of 19
<PAGE>
 
marketing expenses represented 40% and 36% of total revenues for the three month
and nine month periods ended December 31, 1995 and 38% and 40% for the
comparable periods in the current fiscal year, respectively.  The increase in
sales and marketing expenses in absolute dollars is primarily the result of
costs associated with the expansion of the Company's sales and marketing
organization, both domestically and internationally, and the additional
investments being made as the Company implements its vertical market strategy.

     Research and Development.  Research and development expenses increased from
$1.6 million and $3.9 million for the three and nine month periods ended
December 31, 1995 to $2.3 million and $6.2 million for the comparable periods in
1996.  Research and development expenses represented 21% and 20% of total
revenues for the three and nine month periods ended December 31, 1995 and 13%
and 15% for the comparable periods in 1996, respectively.  The increased
investment in research and development expenses in absolute dollars primarily
reflects increased expenses related to salaries and other expenses for the
addition of software engineers and reflects the Company's continued investment
in enhancing existing products and developing new product offerings.

     General and Administrative.  General and administrative expenses increased
from $0.6 million and $1.3 million for the three and nine month periods ended
December 31, 1995 to $1.4 million and $3.4 million for the comparable periods in
1996. General and administrative expenses as a percentage of total revenues were
8% and 7% for the three and nine month periods ended December 31, 1995 and 8%
for both the three and nine month periods in the current fiscal year. The
increase in expenses in absolute dollars and reflects the Company's continued
investment in the enhancement of infrastructure to support its growth.


LIQUIDITY AND CAPITAL RESOURCES

     In November 1996, the  Company, completed a public offering of 2,300,000
shares of common stock at $37.50 per share. Of this, 1,347,000 shares were
issued and sold by the Company and 953,000 shares were sold by selling
shareholders.  The Company received net proceeds of approximately $47.1 million.

     The Company generated cash of $0.3 and $6.2 million from operating
activities during the nine months ended December 31, 1995, and 1996
respectively.  The increase was primarily a result of higher net income and
increases in current liabilities, offset in part by increases in accounts
receivable and prepaid expenses and other assets.  The increase in accounts
receivable resulted from the growth in revenues during the same period. The
levels of accounts receivable at each quarter end will be affected by the
concentration of revenues in the final weeks of each quarter and may be
negatively affected by expanded international revenues in relation to total
revenues as licenses to international customers often have longer payment terms.

     During the nine months ended December 31, 1995 and 1996, the Company
invested $1.8 and $6.0 million, respectively, in short term investments and
invested $1.1 and $4.6 million in property and equipment, which related
primarily to computer hardware and software to support the growing organization.
As of December 31, 1996, there were no significant capital commitments.

     Cash provided by financing activities for the nine months ended December
31, 1995 and 1996, totaled $24.0 and $48.4 million respectively, and consisted
primarily of $23.9 and $47.1 million from the Company's initial public offering
in November 1995 and secondary public offering in November 1996.

     The Company believes that cash flows from operations and existing cash and
cash equivalents and short-term investment, balances will be sufficient to meet
its needs for at least the next twelve months.

                                 Page 10 of 19
<PAGE>
 
OTHER FACTORS THAT MAY AFFECT FUTURE RESULTS

     Variability of Operating Results; Uncertainty of Future Operating Results.
The Company was incorporated in March 1991 and introduced its first product in
February 1992.  Although the Company has been profitable each fiscal year since
inception, there can be no assurance that the Company will be able to sustain
profitability on a quarterly or annual basis in the future.  In addition, the
Company's revenues and operating results have varied substantially in the past
and are likely to vary substantially in the future due to a variety of factors,
including (i) the timing and size of the Company's individual license
transactions, and, in particular, the fact that the Company's revenues in any
quarter can be largely dependent on a limited number of large licenses, (ii) the
fact that a significant portion of the Company's revenues in any given quarter
are recognized in the last month, weeks or even days of the quarter, (iii) the
relatively long sales cycle for the Company's software products, which is
typically six to nine months, (iv) the relative proportion of total revenues
derived from license revenues and services and maintenance revenues, (v) the
timing of the introduction of new products or product enhancements by the
Company and its competitors, (vi) the extent of customization required by any
individual license transaction, which can result in deferral of significant
revenues until completion or acceptance of certain customized portions of the
software, (vii) changes in customers budgets, (viii) seasonality of technology
purchases by customers and general economic conditions, (ix) the mix of revenues
among various distribution channels and between domestic and international
customers, (x) the relative proportion of implementation services performed by
the Company for which the Company engages independent contractors, which are
typically more costly than internal personnel and (xi) the relative proportion
of license revenues derived from third party products distributed by the Company
in conjunction with its products.  Therefore, the Company believes that period
to period comparisons of its revenues and operating results are not necessarily
meaningful and that such comparison cannot be relied upon as indicators of
future performance.

     Estimating future revenues is difficult because the Company ships its
products soon after an order is received and as such does not have a significant
backlog.  Thus, quarterly license revenues are heavily dependent upon orders
received and shipped within the same quarter.  Moreover, the Company has
generally recorded a significant portion of its total quarterly revenues in the
third month of the quarter, with a concentration of these revenues in the last
half of that third month.  This concentration of revenues is influenced by
customer tendencies to make significant capital expenditures at the end of a
fiscal quarter.  The Company expects these revenue patterns to continue for the
foreseeable future.  In addition, quarterly license revenues are dependent on
the timing of revenue recognition, which can be affected by many factors,
including the timing of customer installations, completion of customization
activity and the fulfillment of acceptance criteria.  The Company has from time
to time experienced delays in recognizing revenues with respect to certain
orders.  Despite the uncertainties in its revenue patterns, the Company's
operating expenses are based upon anticipated revenue levels and such expenses
are incurred on an approximately ratable basis throughout the quarter.  As a
result, if expected revenues are deferred or otherwise not realized in a quarter
for any reason, the Company's business, operating results and financial
condition would be materially adversely affected.

     The Company intends to continue to increase its research and development
expenditures in order to pursue its strategy of developing applications tailored
to the requirements of specific additional vertical markets, and to continue to
increase sales and marketing expenditures significantly as the Company expands
its domestic and international sales and marketing staff and develops indirect
sales and distribution channels.  In addition, general and administrative
expenses have increased as the Company invests in the infrastructure needed to
support is growing operations.  Accordingly, to the extent that such expenses
precede or are not subsequently followed by increased revenues, the Company's
business, operating results and financial condition will be materially adversely
affected.

     Due to all of the foregoing factors, it is likely that in some future
quarter the Company's total revenues or operating results will be below the
expectations of public market analysts and investors.  In such event, the price
of the Company's Common Stock would likely decline, perhaps substantially.

     Intense Competition.  The customer information management software market
is relatively new, intensely competitive, highly fragmented, subject to rapid
change, and highly sensitive to new product introductions and marketing efforts
by industry participants.  The Company competes with a variety of other
companies depending on

                                 Page 11 of 19
<PAGE>
 
the target market for their products.  These competitors include (i) a select
number of companies, such as Clarify Inc. and The Vantive Corporation, targeting
the enterprise-wide customer information market; (ii) a substantial number of
small private companies and certain public companies, such as Remedy
Corporation, Siebel Systems, Inc., Aurum Software, Inc. and Software Artistry,
Inc., which offer products targeted at one or more specific markets, including
the customer support market, the help desk market, the quality assurance market
and the sales and marketing automation market; (iii) professional services
organizations, such as Anderson Consulting, that design and develop customer
systems; (iv) large information technology providers such as International
Business Machines Corporation ("IBM") and Computer Associates International,
Inc.; and (v) the internal information technology departments of potential
customers, which develop proprietary customer information management
applications. Among the Company's potential competitors are also a number of
large hardware and software companies that may develop or acquire products that
compete with the Company's products.  In this regard, SAP AG and Oracle
Corporation have each introduced a customer support module as part of their
application suites.  The Company believes that many existing competitors and new
market entrants will attempt to develop fully integrated customer information
management systems that will compete with the Company's products.

     Current and potential competitors have established or may establish
cooperative relationships among themselves or with third parties to increase the
ability of their products to address the needs of the Company's prospective
customers.  Accordingly, it is possible that new competitors or alliances among
competitors may emerge and rapidly acquire significant market share. Increased
competition is likely to result in price reductions, reduced operating margins
and loss of market share, any one of which could materially adversely affect the
Company's business, results of operations or financial condition. Many of the
Company's current and potential competitors have significantly greater
financial, technical, marketing and other resources than the Company. As a
result, they may be able to respond more quickly to new or emerging technologies
and to changes in customer requirements, or to devote greater resources to the
development, promotion and sale of their products, than can the Company. There
can be no assurance that the Company will be able to compete successfully
against current or future competitors or that competitive pressures will not
materially adversely affect the Company's business operating results and
financial condition.

     Dependence on Implementation Relationships.  The Company historically
relied on internal resources and subcontracted consultants on an as-needed basis
to provide consulting and implementation services for the Company's products.  
In recent periods, the Company has sought to increase the use of third party
consultants and system integrators to provide implementation, customization and
consulting services directly to the Company's customers.  The Company's
increasing reliance on such third party consultants and systems integrators
poses several risks that could have a material adverse effect on the Company's
business, operating results or financial condition. For example, there can be no
assurance that these third party providers, who will have direct obligations to
the Company's customers, will be able to provide a level of quality of service
required to meet the needs of such customers.  If the Company is unable to
develop further and to maintain effective, long term relationships with these
third parties, or if these third parties fail to meet the needs of the Company's
customers in a timely fashion, the Company's business, operating results and
financial condition will be materially and adversely affected.  Further, there
can be no assurance that these third party providers, many of whom have
significantly greater financial, technical, personnel and marketing resources
than the Company, will not market software products that compete with the
Company's products, or will not otherwise reduce or discontinue their
relationship with or support of the Company and its products.  Finally, many of
these current and potential third party providers have existing relationships or
may undertake relationships with the Company's direct competitors.  The
inability to recruit, or the loss of, important third party systems integrators
or professional consulting firms would have a material adverse effect on the
Company's business, operating results and financial condition.

     Rapid Technological Change; Dependence on Product Development:  The market
for the Company's products is characterized by rapid technological advances,
evolving industry standards in computer hardware and software technology,
changes in customer requirements and frequent new product introductions and
enhancements.  The Company is currently investing significant resources in
product development and expects to continue to do so in the future.  The
Company's future success will depend on its ability to continue to enhance its
current product line and to continue to develop and introduce new products that
keep pace with competitive product introductions and technological developments,
satisfy diverse and evolving customer requirements and otherwise achieve market
acceptance.  There can be no assurance that the Company will be successful in
continuing to develop and market on 

                                 Page 12 of 19
<PAGE>
 
a timely and cost effective basis fully functional product enhancements or new
products that respond to technological advances by others, or that these
products will achieve market acceptance.  In addition, the Company has in the
past experienced delays in the development, introduction and marketing of new
enhanced products, and there can be no assurance that the Company will not
experience similar delays in the future.  Any failure by the Company to
anticipate or respond adequately to changes in technology and customer
preferences, or any significant delays in product development or introduction,
would have a material adverse effect on the Company's business, operating
results and financial condition.

     Due to the complexity and sophistication of the Company's software 
products, the Company's products from time to time contain defects or "bugs"
which can be difficult to correct.  Furthermore, as the Company continues to
develop and enhance its products, there can be no assurance that the Company
will be able to identify and correct defects in such a manner as will permit the
timely introduction of such products. Moreover, despite extensive testing, the
Company has from time to time discovered defects only after its products have
been used by many customers.  There can be no assurance that software defects
will not cause delays in product introductions and shipments, result in
increased costs, require design modifications, or impair customer satisfaction
with the Company's products.  Any such event could materially adversely affect
the Company's business, operating results and financial condition.

     Expansion of Distribution Channels.  The Company has historically sold its
products through its direct sales force and a limited number of distributors.
The Company's ability to achieve significant revenue growth in the future will
depend in large part on its success in recruiting and training sufficient sales
personnel and establishing relationships with distributors, resellers and
systems integrators.  The Company is currently investing, and plans to continue
to invest, significant resources to expand its domestic and international direct
sales force and develop distribution relationships with certain third party
distributors, resellers and systems integrators.  The Company's existing
distribution relationships are generally non-exclusive and can be terminated by
either party without cause.  The Company's distributors also sell or can
potentially sell products offered by the Company's competitors.  There can be no
assurance that the Company will be able to retain or attract a sufficient number
of  its existing or future third party distribution partners or that such
partners will recommend, or continue to recommend, the Company's products.  The
inability to establish or maintain successful relationships with distributors,
resellers or systems integrators could have a material adverse effect on the
Company's business, operating results or financial condition.  In addition,
there can be no assurance that the Company will be able to successfully expand
its direct sales force or other distribution channels.  Any failure by the
company to expand its direct sales force or other distribution channels would
materially adversely affect the Company's business, operating results and
financial condition.

     Expansion of International Operations; Foreign Currency Fluctuations.  An
important element of the Company's strategy is to expand its international
operations.  In this regard, although the Company has established subsidiaries
in the United Kingdom, Canada and France and is currently investing significant
resources in its international operations, including the development of certain
third party distributor relationships and the hiring of additional sales
representatives, international sales to date have been limited and there can be
no assurance that the Company will be successful in expanding its international
operations. In the event the Company is able to increase international revenues
as a percentage of total revenues, the Company's business, operating results or
financial condition could be materially adversely affected by risks inherent in
conducting business internationally, such as changes in currency exchange rates,
longer payment cycles, difficulties in staffing and managing international
operations, problems in collecting accounts receivable, seasonal reductions in
business activity during the summer months in Europe and certain other parts of
the world, increases in tariffs, duties, price controls or other restrictions on
foreign currencies and trade barriers imposed by foreign nationalities. In this
regard, to the extent the Company's international operations expand, the Company
expects that an increasing portion of its international license revenues will be
denominated in foreign currencies. In addition, the Company has only limited
experience in developing localized versions of its products and marketing and
distributing it products internationally. There can be no assurance that the
Company will be able to successfully localize, market, sell and deliver its
products internationally. The inability of the Company to successfully expand
its international operations in a timely manner could materially adversely
affect the Company's business, operating results or financial condition.

     Management of Growth.  The Company's business has grown rapidly.  The
growth of the Company's business and expansion of its customer base has placed
and is expected to continue to place a significant strain on the

                                 Page 13 of 19
<PAGE>
 
Company's management and operations.  The Company's future operating results
will depend on its ability to continue to broaden the Company's senior
management group.  In this regard, certain key members of the Company's
management, including its Chief Financial Officer and Vice President, Europe
have recently joined the Company.  From time to time, engineers and other
employees have left the Company for various reasons, and the Company's future
success will depend on its ability to attract, hire and retain skilled employees
and to hire replacements for employees that leave the Company.  The Company's
expansion has also resulted in substantial growth in the number of its employees
and the burden placed upon its operating and financial systems, resulting in
increased responsibility for both existing and new management personnel.  In
addition, the Company's ability to effectively manage and support its growth
will be substantially dependent on its ability to continue to build upon its
financial and management controls, reporting systems and procedures on a timely
basis and to expand and maintain highly trained internal and third party
resources to provide product customization, implementation, training and other
support services.  The Company also expects to increase its customer support
operations to the extent the installed base of the Company's products continues
to grow.  Accordingly, the Company's future operating results will depend on the
ability of its management and other key employees to continue to implement and
improve its systems for operations, financial control and information
management, to recruit, train and manage its employee base, in particular, its
direct sales force and customer support organization, and to work effectively
with third party consulting and implementation service providers.  There can be
no assurance that the Company will be able to manage or continue to manage its
recent or any future growth successfully, and any inability to do so would have
a material adverse effect on the Company's business, operating results and
financial condition.  There also can be no assurance that the Company will be
able to sustain the rates of revenue growth that it has experienced in the past.

     Developing Markets; Product Concentration.  The Company's future financial
performance will depend in large part on the growth in demand for individual
customer information management applications as well as the number of
organizations adopting comprehensive customer information systems for their
client/server computing environments.  The markets for these applications are
relatively new and developing.  If the demand for customer information
management applications develops more slowly than the Company currently
anticipates, it would have a material adverse effect on the demand for the
Company's applications and on its business, operating results and financial
condition.  The Company currently markets five application products, together
with related application service modules and a customization tool which are
licensed for use in conjunction with the Company's applications.  Although the
Company's application service modules and customization tool are offered
separately from the Company's applications, the Company believes it is unlikely
that any significant revenues could be derived from such modules and such tool
unless the customer is using at least one of the Company's applications.
Accordingly, in the event the Company's applications are not accepted by the
marketplace, the Company's business, operating results and financial condition
would be materially adversely affected.

     Intellectual Property Rights.  The Company's success is dependent on its
ability to protect its proprietary technology.  The Company licenses its
products in object code form only, although it has source code escrow
arrangement with certain customers.  The Company relies on a combination of
copyright, trademark and trade secret laws, as well as confidentiality
agreements and licensing arrangements, to establish and protect its proprietary
rights.  The Company does not have any patents or patent applications pending,
and existing copyright, trademark and trade secret laws afford only limited
protection.  In addition, the laws of certain countries do not protect the
Company's proprietary rights as do the laws of the United States. Accordingly
there can be no assurance that the Company will be able to protect its
proprietary rights against unauthorized third party copying or use, which could
materially adversely affect the Company's business, operating results or
financial condition.

     Despite the Company's efforts to protect its proprietary rights, attempts
may be made to copy or reverse engineer aspects of the Company's products or to
obtain and use information that the Company regards as proprietary.  Moreover,
there can be no assurance that others will not develop products that infringe
the Company's proprietary rights, or that are similar or superior to those
developed by the Company. Policing the unauthorized use of the Company's
products is difficult.  Litigation may be necessary in the future to enforce the
Company's intellectual property rights, to protect the Company's trade secrets
or to determine the validity and scope of the proprietary right of others.  Such
litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's business, operating
results or financial condition.

                                 Page 14 of 19
<PAGE>
 
     As is common in the software industry, the Company from time to time
receives notices from third parties claiming infringement by the Company's
products of third party proprietary rights.  While the Company is not currently
subject to any such claim, the Company expect its software products will
increasingly be subject to such claims as the number of products and competitors
in the Company's industry segments grows and the functionality of product
overlaps.  Any such claim, with or without merit, could result in significant
litigation costs and require the Company to enter into royalty and licensing
agreements, which could have a material adverse effect on the Company's
business, operating results or financial condition.  Such royalty and licensing
agreements, if required, may not be available on terms acceptable by the Company
or at all.

     The Company also relies on certain technology which it licenses from third
parties, including software which is integrated with internally developed
software and used in the Company's products to perform key functions.  There can
be no assurance that these third party technology licenses will continue to be
available to the Company on commercially reasonable terms.  The loss of or
inability of the Company to maintain any of these technology licenses could
result in delays or reductions in product shipments until equivalent technology
could be identified, licensed and integrated.  Any such delays or reductions in
product shipments would materially adversely affect the Company's business,
operating results and financial condition.

     Dependence on Key Personnel.  The Company's success depends to a
significant extent upon a limited number of members of senior management and
other key employees, including Ori Sasson, the Company's Chairman, President and
Chief Executive Officer.  The Company does not maintain key man life insurance
on any such persons.  The loss of the service of one or more key managers or
other employees could have a material adverse effect upon the Company's
business, operating results or financial condition.  In addition, the Company
believes that its future success will depend in large part upon its ability to
attract and retain additional highly skilled technical, management, sales and
marketing personnel.  Competition for such personnel in the computer software
industry is intense.  There can be no assurance the Company will be successful
in attracting and retaining such personnel, and, the failure to do so, could
have a material adverse effect on the Company's business, operating results or
financial condition.

     Product Liability.  Although the Company has not experienced any product
liability claims to date, the sale and support of products by the Company and
the incorporation of products from other companies may entail the risk of
product liability claims.  The Company's license agreements with its customers
typically contain provisions intended to limit the Company's exposure to such
claims, but such provisions may not be effective in limiting the Company's
exposure.  A successful product liability action brought against the Company
could have a material adverse effect upon the Company's business, operating
results or financial condition.

     Volatility of Share Price.  The market price for the Company's Common Stock
has been and is expected to continue to be significantly affected by factors
such as the announcement of new products or product enhancements by the Company
or its competitors, technological innovations by the Company or its competitors,
quarterly variations in the Company's results of operations or the results of
operations of the Company's competitors, changes in earnings estimates or
recommendations by securities analysts and general market conditions.  In
particular, the stock prices for many companies in the technology and emerging
growth sector have experienced wide fluctuations which have often been unrelated
to the operating performance of such companies.  Such fluctuations may adversely
affect the market price of the Company's Common Stock.

                                 Page 15 of 19
<PAGE>
 
PART II.  OTHER INFORMATION

 Item 6.  Exhibits and Reports on Form 8-K

     List of Exhibits
     ----------------

          11.1 Statement of Computation of Net Income per Share

          27   Financial Data Schedule

     Reports on Form 8-K:  None
     --------------------

                                 Page 16 of 19
<PAGE>
 
                                   SIGNATURE


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                            SCOPUS TECHNOLOGY, INC.
                            -----------------------
                                 (Registrant)


Dated: February 14, 1997

                                            /s/ Ori Sasson
                                            ____________________________________
                                            Ori Sasson
                                            Chairman of the Board, President and
                                            Chief Executive Officer
                                            (Principal Executive Officer)




                                            /s/ Michele Axelson
                                            ____________________________________
                                            Michele Axelson
                                            Chief Financial Officer
                                            (Principal Financial and Accounting
                                            Officer)

                                 Page 17 of 19
<PAGE>
 
                            SCOPUS TECHNOLOGY, INC.

                               INDEX TO EXHIBITS



  Exhibit      Description                                                PAGE
  -------      -----------                                                ----

    11.1       Statement of Computation of Net Income per Share             17

    27         Financial Data Schedule

                                 Page 18 of 19