<PAGE>
 
                                   FORM 10-Q
                                        
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                        
       (Mark One)

          [ 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 0-21040


                         CAMBRIDGE TECHNOLOGY PARTNERS
                             (MASSACHUSETTS), INC.
            (Exact name of registrant as specified in its charter)



           DELAWARE                                          06-1320610
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                         Identification Number)


           304 Vassar Street,
        Cambridge, Massachusetts                                02139
(Address of principal executive offices)                      (Zip Code)


                                (617) 374-9800
             (Registrant's telephone number, including area code)


     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 
                                                  ----    ----    

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:

     As of April 30, 1999, there were 59,599,260 shares of common stock
outstanding.
 
<PAGE>
 
              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                                        
                               TABLE OF CONTENTS
                               -----------------

<TABLE> 
<CAPTION> 
PART I - FINANCIAL INFORMATION:
 
Item 1:  Financial Statements

<S>                                                                  <C> 
  Consolidated Balance Sheets as of March 31, 1999 and
    December 31, 1998                                                  3
 
  Consolidated Statements of Operations for the Three
    Months Ended March 31, 1999 and 1998                               4
 
  Consolidated Statements of Cash Flows for the Three
    Months Ended March 31, 1999 and 1998                               5
 
  Notes to Consolidated Financial Statements                           6
 
Item 2:  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                        11
 
Item 3:  Quantitative and Qualitative Disclosure About Market Risk    18
 
 
PART II - OTHER INFORMATION:
 
Item 1:  Legal Proceedings                                            19
 
Item 6:  Exhibits and Reports on Form 8-K                             19
 
SIGNATURES                                                            21
 
EXHIBIT INDEX                                                         22
</TABLE>

                                       2
<PAGE>
 
PART I - FINANCIAL INFORMATION

  Item 1.  Financial Statements
  -------  --------------------

              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                          CONSOLIDATED BALANCE SHEETS
                (in thousands, except share and per share data)
<TABLE>
<CAPTION>
                                                                        March 31,   December 31,
                                                                          1999          1998
                                                                       -----------  -------------
                                                                       (unaudited)
<S>                                                                    <C>          <C>
ASSETS
Current assets:
 Cash and cash equivalents                                               $ 73,696       $ 80,051
 Investments held to maturity                                              27,360         24,918
 Accounts receivable, less allowance of $4,678 and $4,550
   at March 31, 1999 and December 31, 1998, respectively                  128,602        133,583
 Unbilled revenue on contracts                                             20,866         10,964
 Deferred income taxes                                                      2,179          2,179
 Prepaid expenses and other current assets                                 36,686         33,284
                                                                         --------       --------
   Total current assets                                                   289,389        284,979
 
Property and equipment, net                                                48,159         48,255
Other assets                                                               19,283         17,972
                                                                         --------       --------
   Total assets                                                          $356,831       $351,206
                                                                         ========       ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                                        $ 14,344       $ 15,804
 Accrued expenses                                                          43,704         49,603
 Deferred revenue                                                          11,916         10,861
 Income taxes payable                                                      24,378         30,635
 Obligations under capital leases, current                                    151            147
                                                                         --------       --------
   Total current liabilities                                               94,493        107,050
 
Other long term liabilities                                                   143            197
Deferred income taxes                                                       1,975          1,809
 
Commitments and contingencies
 
Stockholders' equity:
 Common stock, $.01 par value, authorized 250,000,000
   shares;  issued and outstanding 59,567,068 and 58,856,401 shares
   at March 31, 1999 and December 31, 1998, respectively                      596            589
 Additional paid-in capital                                               129,196        115,662
 Accumulated other comprehensive loss                                      (4,582)        (1,652)
 Retained earnings                                                        135,010        127,551
                                                                         --------       --------
        Total stockholders' equity                                        260,220        242,150
                                                                         --------       --------
   Total liabilities and stockholders' equity                            $356,831       $351,206
                                                                         ========       ========
</TABLE>
   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       3
<PAGE>
 
              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
                                  (unaudited)
                                        
<TABLE> 
<CAPTION> 
                                                  Three Months Ended March 31,
                                                  ----------------------------
                                                     1999         1998 
                                                     ----         ----
<S>                                                  <C>          <C>
Net revenues                                         $151,373     $142,223
Costs and expenses:                                             
 Project personnel                                     71,568       65,535
 General and administration                            16,442       15,888
 Sales and marketing                                   14,265       13,308
 Other costs                                           37,960       27,375
                                                     --------     --------
   Total operating expenses                           140,235      122,106
                                                     --------     --------
                                                                
Income from operations                                 11,138       20,117
                                                                
Other income, net                                         893          412
                                                     --------     --------
                                                                
Income before income taxes                             12,031       20,529
Provision for income taxes                              4,572        8,049
                                                     --------     --------
                                                                
Net income                                           $  7,459     $ 12,480
                                                     ========     ========
                                                                
Basic net income per share                               $.13         $.22
                                                     ========     ========
                                                                
Diluted net income per share                             $.12         $.20
                                                     ========     ========
                                                                
Weighted average number of common shares 
  outstanding                                          59,301       57,217
                                                     ========     ========
                                                                
Weighted average number of common and common                    
     equivalent shares outstanding                     64,059       62,659
                                                     ========     ========
 
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.

                                       4
<PAGE>
 
              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                            Three Months Ended March 31,
                                                            -----------------------------
                                                              1999                 1998
                                                            -----------------------------
<S>                                                           <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                    $  7,459           $ 12,480
Amounts that reconcile net income to net cash used                            
 in operating activities:                                                     
 Depreciation and amortization                                   3,943              3,068
 Tax benefit from exercise of stock options                      1,467              2,256
 Gain on equity investment in Cambridge                                       
   Technology Capital Fund                                        (282)                 -
 Changes in assets and liabilities:                                           
   Decrease/(increase) in accounts receivable                    3,317            (14,708)
   Increase in unbilled revenue on contracts                   (10,263)            (2,756)
   Increase in prepaid expenses and other current assets        (3,845)            (3,276)
   (Decrease)/increase in accounts payable                      (1,339)                29
   Decrease in accrued expenses                                 (5,097)            (7,256)
   Increase in deferred revenue                                  1,080              2,376
   (Decrease)/increase in income taxes payable                  (7,344)             6,065
   Other, net                                                     (216)               (28)
                                                              --------           --------
     Net cash used in operating activities                     (11,120)            (1,750)
                                                              --------           --------
CASH FLOWS FROM INVESTING ACTIVITIES:                                         
Additions to property and equipment                             (4,210)            (6,490)
Investment in Cambridge Technology Capital Fund                   (840)                 -
Purchase of investments held to maturity                        (4,579)            (6,157)
Maturity of investments                                          2,137              1,950
                                                              --------           --------
     Net cash used in investing activities                      (7,492)           (10,697)
                                                              --------           --------
CASH FLOWS FROM FINANCING ACTIVITIES:                                         
Repayment of loan                                                    -               (823)
Obligations under capital leases                                   (54)              (130)
Dividend distribution                                                -             (1,129)
Proceeds from employee stock purchase plan                       4,768              3,389
Proceeds from exercise of stock options                          7,307              8,315
                                                              --------           --------
     Net cash provided by financing activities                  12,021              9,622
                                                              --------           --------
                                                                              
Effect of foreign exchange rate changes on cash                    236               (103)
                                                                              
Net decrease in cash and cash equivalents                       (6,355)            (2,928)
Cash and cash equivalents at beginning of period                80,051             39,649
                                                              --------           --------
Cash and cash equivalents at end of period                    $ 73,696           $ 36,721
                                                              ========           ========
</TABLE>
   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       5
<PAGE>
 
              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

A.  Basis of Reporting
    ------------------

The accompanying consolidated financial statements of Cambridge Technology
Partners (Massachusetts), Inc., a Delaware corporation (the "Company"), include
the accounts of the Company and all of its wholly owned subsidiaries.  All
intercompany transactions and balances have been eliminated in consolidation.
In August 1998, the Company acquired all of the outstanding capital stock of
Excell Data Corporation ("Excell"). The Excell acquisition was accounted for
using the pooling of interests method of accounting.  All prior period
historical consolidated financial statements presented herein have been restated
to include the financial position, results of operations, and cash flows of
Excell.  Certain prior period amounts have been reclassified to conform to
current period presentation.  In the opinion of management, the consolidated
financial statements reflect all normal and recurring adjustments, which are
necessary for a fair presentation of the Company's financial position, results
of operations, and cash flows as of the dates and for the periods presented.
The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Consequently, these statements do not include all the disclosures normally
required by generally accepted accounting principles for annual financial
statements nor those normally made in the Company's Annual Report on Form 10-K.
Accordingly, reference should be made to the Company's Annual Report on Form 10-
K for additional disclosures, including a summary of the Company's accounting
policies.  The consolidated results of operations for the three months ended
March 31, 1999 are not necessarily indicative of results for the full year.

B.  Net Income Per Share
    --------------------

Statement of Financial Accounting Standard No. 128, "Earnings per Share"
requires the presentation of basic and diluted earnings per share ("EPS"). Basic
EPS is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding for the period.  Diluted
EPS is computed using the weighted average number of common shares outstanding
plus the dilutive effect of common stock equivalents (using the treasury stock
method).

                                       6
<PAGE>
 
The following table presents the calculation of earnings per share for the three
months ended March 31, 1999 and March 31, 1998 (in thousands except per share
data):

<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31,
                                                                   ---------------------------------------------
                                                                         1999                           1998
                                                                   --------------                 --------------
 
<S>                                                                <C>                            <C>
Net income                                                                $ 7,459                        $12,480
                                                                   ==============                 ==============
Basic:
    Weighted average number of common shares outstanding                   59,301                         57,217
                                                                   ==============                 ==============

        Net income per share                                              $   .13                        $   .22
                                                                   ==============                 ==============
Diluted:
   Weighted average number of common shares outstanding                    59,301                         57,217
   Dilutive effects of stock options                                        4,758                          5,442
                                                                   --------------                 --------------
   Weighted average number of common and common equivalent
      shares outstanding                                                   64,059                         62,659
                                                                   ==============                 ==============
 
        Net income per share                                              $   .12                        $   .20
                                                                   ==============                 ==============
</TABLE>


C.  Foreign Exchange Contracts
    --------------------------

The Company maintains foreign exchange contracts in an attempt to mitigate the
risk of changes in foreign exchange rates associated with intercompany balances.
The contracts generally have maturities of one month.  The impact of exchange
rate movements on contracts is recorded in other income in the period in which
the exchange rates change, generally consistent with the term of the contract.
As of March 31, 1999, the Company held foreign exchange forward contracts of
approximately $4.3 million and there were no related deferred gains and losses.
The Company does not hold foreign exchange contracts for trading purposes.

D.  Comprehensive Income
    --------------------

Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" requires the presentation of comprehensive income and its components.
Comprehensive income presents a measure of all changes in equity that result
from recognized transactions and other economic events during the period other
than transactions with

                                       7
<PAGE>
 
stockholders. The following table presents the calculation of comprehensive
income and its components:
<TABLE>
<CAPTION>
                                                            Three Months Ended March 31,
                                                            -----------------------------
                                                              1999                 1998
                                                            -----------------------------
                                                                    (in thousands)
<S>                                                             <C>             <C>
 Comprehensive income:
   Net income                                                   $ 7,459         $12,480
   Other comprehensive income:                                              
     Unrealized gain on investment, net of taxes of $165            267               -
     Foreign currency translation adjustments                    (3,197)         (1,673)
                                                                -------         -------
     Other comprehensive income                                  (2,930)         (1,673)
                                                                -------         -------
        Comprehensive income                                    $ 4,529         $10,807
                                                                =======         =======
</TABLE>

E.  New Accounting Pronouncements
    -----------------------------

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company).  SFAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value.  Changes in the fair value of derivatives
will be recorded for each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction.  The Company is
currently determining the impact of the adoption of SFAS 133 on the Company's
results of operations and financial position.

F.  Legal Proceedings
    -----------------

On November 18, 1998, certain of the former stockholders of Excell filed a
lawsuit against the Company in the United States District Court for the District
of Massachusetts. The complaint alleges breach of contract, violation of federal
securities laws, common law fraud, and negligent misrepresentation in connection
with the Excell acquisition and seeks unspecified damages.  The Company believes
that the plaintiffs' claims are without merit and intends to vigorously defend
the lawsuit.  In February 1999, the Company filed a counterclaim against such
former stockholders of Excell which alleges breach of contract.

In March  and April 1999, certain stockholders of the Company filed ten separate
class action lawsuits against the Company and certain of the Company's officers
in the United States District Court for the District of Massachusetts. The suits
allege misrepresentations and omissions regarding the Company's future growth
prospects and progress of the Company's reorganization in violation of federal
securities laws. The suits seek unspecified damages. The Company believes that
the plaintiffs' claims are without merit and intends to vigorously defend the
lawsuits.

                                       8
<PAGE>
 
The Company is involved in litigation and various other legal matters, which
have arisen in the ordinary course of business.  The Company does not believe
that the ultimate resolution of any existing matter will have a material adverse
effect on its financial condition, results of operations, or cash flows.

G.  Operating Segment and Geographic Information
    --------------------------------------------

The Company is managed in two operating segments: North America and 
International. North America provides systems integration and consulting 
services in the United States and Canada while International provides systems 
integration and consulting services outside of North America.

The company evaluates each segment's performance based on net revenues and 
income from operations. Corporate costs have been allocated to each segment 
based on the proportionate operating income of each segment. Total corporate 
assets have been included in North America.

Information about the Company's operating segments is presented as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                     -----------------------------------------
                                                        March 31,                 March 31,
                                                           1999                     1998
                                                     --------------             --------------
<S>                                                  <C>                        <C>
Net revenues:
   North America                                           $ 97,418                   $101,558
   International                                             53,955                     40,665
                                                     --------------             --------------
     Consolidated                                          $151,373                   $142,223
                                                     ==============             ==============
Income from operations:
   North America                                           $  5,857                   $ 16,376
   International                                              5,281                      3,741
                                                     --------------             --------------
     Consolidated                                          $ 11,138                   $ 20,117
                                                     ==============             ==============
Total Assets                 
   North America                                           $272,246                   $206,161
   International                                             84,585                     61,154
                                                     --------------             --------------
     Consolidated                                          $356,831                   $267,315
                                                     ==============             ==============


</TABLE>

                                       9
<PAGE>
 
Information about the Company's operations by geographic region is as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                     -----------------------------------------
                                                         March 31,                 March 31,
                                                           1999                      1998
                                                     --------------             --------------
Net revenues:
<S>                                                  <C>                        <C>
   North America                                           $ 97,287                    $101,514
   Europe                                                    47,315                      37,467
   Latin America                                              4,316                       2,375
   Pacific Rim                                                2,455                         867
                                                     --------------             ---------------
     Consolidated                                          $151,373                    $142,223
                                                     ==============             ===============
 
Income (loss) from operations:
   North America                                           $  3,730                    $ 14,758
   Europe                                                     6,868                       6,046
   Latin America                                                641                        (330)
   Pacific Rim                                                 (101)                       (357)
                                                     --------------             ---------------
     Consolidated                                          $ 11,138                    $ 20,117
                                                     ==============              ==============
Total long-lived assets:
   North America                                           $ 53,601                    $ 36,619
   Europe                                                    12,131                       9,560
   Latin America                                                844                         375
   Pacific Rim                                                  867                         155
                                                     --------------             ---------------
     Consolidated                                          $ 67,443                    $ 46,709
                                                     ==============              ==============
</TABLE>

Net revenues to external customers are accounted for based on the location of
the customer. North American operations consist of services provided in the
United States and Canada. European operations consist of services provided
primarily in the United Kingdom, the Netherlands, Switzerland, Sweden, Norway,
Ireland, Germany, France, and Austria, which have similar business environments.
Latin American operations consist of services provided primarily in Mexico,
Puerto Rico, Brazil, and Venezuela. Pacific Rim operations consist of services
provided primarily in Japan, Australia, and India. There are no intraenterprise
sales for the periods presented. Corporate costs and long-lived assets have been
included in North America. No customer of the Company accounted for 5% or more
of the Company's net revenues for any of the periods presented.

                                       10
<PAGE>
 
Item 2.  Management's Discussion and Analysis of Financial Condition
-------  -----------------------------------------------------------
         and Results of Operations
         -------------------------

Overview

Cambridge Technology Partners (Massachusetts), Inc., a Delaware corporation (the
"Company"), is an international management consulting and systems integration
firm.  Founded in 1991, the Company combines management consulting, internet
solutions, custom and package software deployment, network services, and
training to rapidly deliver end-to-end business solutions for "Global 2000"
organizations worldwide. The Company provides the majority of its services on a
fixed-time, fixed-price model with client involvement at all stages of the
process.  In performing its services, the Company brings together key client
users, executives, and IT professionals in interactive sessions to achieve
consensus on the business case, strategic objectives, and functionality of a
business solution. In many cases, the Company employs a rapid deployment
methodology that features an iterative approach. The Company believes that these
techniques permit the delivery of results in rapid time frames -- typically
within three to twelve months. Net revenues for the first quarter of 1999
increased 6% to $151.4 million compared to $142.2 million for the same period in
1998. Net income for the quarter ended March 31, 1999, decreased 40% to $7.5
million, or $.12 per share (diluted), compared to $12.5 million, or $.20 per
share (diluted), for the quarter ended March 31, 1998.

Effective for 1999, the Company has realigned its North American operations.
North American operations, which in 1998 were organized on a regional geographic
basis, are now organized around the Company's six principal service offerings:
Management Consulting, Interactive Solutions, Customer Management Solutions,
Enterprise Resource Solutions, Custom Software Solutions, and Network Services.
This realignment helps integrate the Company's front-office, back-office, and
Internet application deployment capabilities. Under the former structure,
consultants provided services to clients based on geographic location, and as a
result, the Company was unable to take full advantage of specialist skills not
located in a client's geographic region. No longer constrained by geographic
regions, the new service line structure is designed to permit the Company to
provide clients with its best consultants in specific service areas who can
deploy proven methodologies, training, and business processes. This approach is
also intended to allow the Company to realize economies of scale in forecasting
and staffing and permit better leveraging of industry expertise.

North American net revenues decreased 4% while international net revenues grew
33% in the first quarter of 1999 compared to the first quarter of 1998. North
American net revenues for the quarter ended March 31, 1999, represented 64% of
total net revenues while international net revenues represented 36% of total net
revenues for the same period.  North American net revenues for the quarter ended
March 31, 1998  represented 71% of total net revenues while international net
revenues represented 29% of total net revenues for the same period in 1998. The
international net revenue growth resulted from continued demand for the
Company's services, primarily in Europe, including Customer Management
Solutions, Interactive Solutions, Management Consulting, and Custom Software
Solutions.  Net revenues from the Company's European operations accounted for
31% of total net revenues in the quarter ended March 31, 1999, compared to 26%
for the same period in 1998.  The increase in international net revenues as a
percentage of total net revenues also resulted, in part, from the decrease in
North American net revenues.

                                       11
<PAGE>
 
While the Company's total net revenues continued to grow in the first quarter of
1999, total net revenues in North America decreased compared to the same period
in 1998. This decrease principally resulted because the benefits of the
realignment of the Company's North American operations did not materialize as
quickly as anticipated. The Company's transition to a service line model,
commenced during the fourth quarter of 1998, resulted in expanded
responsibilities for members of service line management, the need for additional
sales force training and a shift in internal reporting and processes, each of
which contributed to lower net revenues. The decrease was also due, in part, to
changing market dynamics which resulted in decreased demand for Enterprise
Resource Planning (ERP) services and increased demand for interactive and WEB-
based services. The Company also experienced a decrease in net revenues for
Custom Software Solutions for the first quarter of 1999 compared to the same
period in 1998, as the Company continued to encounter increased competition from
providers of application specific solutions.

Due primarily to changing market dynamics resulting in decreased demand for ERP
services and increased demand for interactive and WEB-based services, the
Company announced in April 1999 that it will record a charge in the second
quarter of 1999 of approximately $9.0 million for a human resource repositioning
and retention program. This program will enable the Company to retain, retrain,
relocate and strategically redeploy employees into its e-business service
segments such as XRP (value-added services to ERP such as supply chain
management); Enterprise Application Integration; WEB-enablement; Customer
Management solutions; and E-Commerce solutions. Total Company headcount remained
at approximately 4,400 at March 31, 1999 and December 31, 1998 as the Company
assessed the skill sets necessary to address the changing market dynamics and
focused on training, hiring, and assimilating appropriate personnel to service
its clients.


RESULTS OF OPERATIONS

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

Net revenues increased 6% to $151.4 million in 1999 compared to $142.2 million
in 1998 due principally to a 37% increase in the net revenues of the Interactive
Solutions and Network Services lines of business and net revenue increases for
the Enterprise Resource Solutions, Customer Management Solutions, and Management
Consulting service lines of 30%, 18% and 5%, respectively. These increases were
partially offset by a 19% decrease in the net revenues of the Custom Software
Solutions service line.   North American net revenues decreased 4% to $97.3
million for the first quarter of 1999 from $101.5 million for the first quarter
of 1998.  International net revenues grew 33% to $54.1 million for the first
quarter of 1999 from $40.7 million for the same period in 1998.

Project personnel costs consist principally of payroll and payroll-related
expenses for personnel dedicated to client assignments and are directly related
to the level of client services being delivered.  Project personnel costs were
$71.6 million or 47% of net revenues in 1999 compared to $65.5 million or 46% of
net revenues in 1998.  The dollar and percentage increase resulted primarily
from  an increase in payroll and payroll-related expenses related to the hiring
of additional project personnel over 1998 staff levels to support the increased
volume of services delivered to clients and an increase in subcontractor costs 
to supplement critical skills. The Company continues to maintain its 

                                       12
<PAGE>
 
staffing process to monitor its subcontractor costs. Worldwide project personnel
headcount increased 14% to 3,548 employees at March 31, 1999 from 3,124
employees at March 31, 1998. While the Company expects to meet its retention and
hiring goals for the remainder of fiscal 1999, competition for personnel with
information technology skills is intense and the Company expects salaries and
wages to continue to increase. The Company periodically reviews and updates its
billing rates to cover the expected increase in costs.

General and administration expenses were $16.4 million in 1999 compared to $15.9
million in 1998, representing 11% of net revenues for both periods.  The dollar
increase primarily reflects increased payroll and payroll-related expenses
associated with increased staff headcount of 28% to 513 employees at March 31,
1999 from 401 employees at March 31, 1998, partially offset by a decrease in
travel expenses.

Sales and marketing expenses were $14.3 million in 1999 compared to $13.3
million in 1998, reflecting 9% of net revenues for both periods. The dollar
increase is primarily attributable to an increase in payroll and payroll-related
expenses associated with a 22% increase in sales and marketing personnel from
243 at March 31, 1998 to 296 at March 31, 1999. The increased headcount enables
the Company to maximize potential client lead generation through its field
marketing staff with subsequent services coordinated by its sales personnel. The
Company continued its investment in marketing initiatives and educational and
training programs through those conducted by its Management Lab and the
Cambridge Information Network (CIN). The Management Lab and CIN enable clients
to participate in both physical and virtual interactive forums to discuss issues
associated with adopting advanced information technology, as well as key
business, technology, and career management issues.

Other costs consist of non-billable expenses directly incurred for client
projects and other associated business costs, including facilities costs and
related expenses, non-billable staff travel, and non-billable project personnel
costs.  Other costs were $38.0 million or 25% of net revenues in 1999 compared
to $27.4 million or 19% of net revenues in 1998.  The dollar and percentage
increase from 1998 resulted principally from a decrease in project personnel
utilization which resulted in increased non-billable project personnel costs and
also from increased facility, travel, and employee training costs. The decrease
in project personnel utilization was primarily caused by the realignment of the
Company's North American operations to a service line model and the changing
market dynamics in the first quarter of 1999.  The Company has adjusted its
hiring plans based upon a review of the skill sets required to reflect the
change in market dynamics described above, and will institute a human resource
repositioning and retention program in order to retain, retrain, relocate and
strategically redeploy employees.

Other income of $893,000 in 1999 included interest income of $720,000 and a
$282,000 gain from equity investments, partially offset by foreign currency
exchange rate loss and other interest expense totaling $109,000.  Other income
in 1998 of $412,000 consisted of interest income of $602,000, partially offset
by foreign currency exchange rate loss and other interest expense totaling
$190,000.

The Company maintains monthly foreign exchange forward contracts to hedge
against the risk of changes in foreign exchange rates associated with
intercompany balances.  This risk coverage is dependent upon forecasted
intercompany activities at the beginning of each month.  The exchange rate gains
and losses are directly related to the accuracy of such forecasted amounts.  As
of March 31, 1999, 

                                       13
<PAGE>
 
the Company held foreign exchange contracts of approximately $4.3 million. As
the Company grows its international business, it becomes increasingly subject to
the risks associated with international operations, including changes in foreign
currency exchange rates. The Company continues to monitor the impact of foreign
currency exchange rates on revenues.

The Company's effective income tax rate for the first quarter of 1999 was 38.0%
compared to 39.2% for the same period a year ago.  The decrease in the Company's
effective tax rate in the first quarter of 1999 is primarily due to favorable
effects of continuing state tax rate minimization initiatives and global tax
planning strategies.  The Company's effective tax rate may vary from period to
period based on the Company's future expansion into areas of varying country,
state, and local statutory income tax rates and its geographic mix of revenue
and income.

Net income decreased 40% to $7.5 million or $.12 per share (diluted) in the
first quarter of 1999 from $12.5 million or $.20 per share (diluted) for the
same period in 1998.

Liquidity and Capital Resources

The Company continued to operate primarily debt-free and to enhance its working
capital position.  Working capital increased to $194.9 million at March 31,
1999, from $177.9 million at December 31, 1998.  This increase was primarily due
to increases in investments held to maturity, unbilled revenue on contracts, and
prepaid expenses and other current assets, and decreases in  accounts payable,
accrued expenses, and income taxes payable, partially offset by decreases in
cash and cash equivalents and accounts receivable. The increase in unbilled
revenue on contracts was caused by timing differences in contractual billing
terms and percentage of completion revenue recognition requirements. As of April
30, 1999, a substantial portion of the unbilled revenue on contracts at March
31, 1999 had been billed. The Company's days sales in accounts receivable was 78
days during the first quarter of 1999 compared to 71 and 78 days for the
quarters ended March 31, and December 31, 1998, respectively. The Company
continues to work toward a short term goal of 70 days sales in accounts
receivable.

Net cash used in operating activities was $11.1 million in the first three
months of 1999, compared to $1.8 million for the same period in 1998.  A
decrease in accounts receivable was more than offset by lower net income and
decreases in accounts payable, accrued expenses and income taxes payable and
increases in unbilled revenue on contracts and prepaid expenses and other
current assets.

Capital expenditures of $4.2 million in 1999 were used principally for computer
equipment to support the Company's expanding operations and employee
workstations, telecommunications equipment, and leasehold improvements.  Capital
expenditures for the full year of 1999 are expected to approximate $26 million,
principally for leasehold improvements, personal computers, employee
workstations, telecommunications and video conferencing equipment, and other
equipment to support both current and anticipated levels of customer activities
worldwide.  The actual amount of capital expenditures may vary from management's
estimates as capital needs arise and actual expenditures are made. In accordance
with the Company's strategic acquisition plans, the Company evaluates, on an
ongoing basis, potential acquisitions of companies or technologies that may
complement or enhance the Company's global growth initiatives. The Company
cannot be certain that it will be able to identify suitable acquisition
opportunities at an acceptable cost, if at all.

                                       14
<PAGE>
 
The Company maintains a $50.0 million unsecured senior revolving credit facility
(the "Facility") through a syndication arrangement committed equally by The
Chase Manhattan Bank ("Chase") and Fleet National Bank. The Facility, which
expires on September 10, 2001, is administered by Chase and carries a commitment
fee, payable quarterly in arrears, calculated based on the unused portion of the
Facility and a price grid as set forth in the credit agreement.  The Facility
permits the Company to elect any one of three possible interest rate formulas as
defined in the credit agreement.  Interest is payable in arrears based on an
interest period determined by the interest rate elected by the Company.  The
Facility requires, among other things, the Company to maintain certain financial
ratios, including debt service coverage, debt to capital, and net worth.  At
March 31, 1999, the Company was in compliance with these financial ratio
requirements.  As of March 31, 1999 and December 31, 1998, the Company had no
balance outstanding under the Facility.

Cambridge Technology Capital Fund I L.P. (the "Fund") was formed in October 1997
as a limited partnership with committed capital of approximately $25.3 million.
The Fund is intended to invest in expansion-stage, private companies providing
products and services within areas of the Company's strategic expertise.  A
wholly owned subsidiary of the Company acts as the sole general partner of the
Fund's general partner and the Company's investment is accounted for using the
equity method of accounting.  The Company's capital commitment to the Fund is
approximately $6.0 million.  No more than two-thirds of the Fund's committed
capital may be called before October 1999 without approval of the Fund's
partners.  The balance of the Fund's capital has been provided by institutional
investors and directors and employees of the Company.  During the first quarter
of 1999 the Company contributed $840,000 to the Fund to bring its cumulative
investment in the Fund to approximately $2.7 million. The Company's investment
in the Fund resulted in a net gain of approximately $282,000 for the quarter
ended March 31, 1999.

In January 1998, the Company entered into an agreement with Boston Properties
Limited Partnership ("Boston Properties") to lease a building being constructed
and developed by Boston Properties.  This approximately 177,000 square foot
building, which is located in Cambridge, Massachusetts, will house the Company's
Northeast operations, new employee training facility, and corporate departments.
The lease agreement is for a ten-year period, which is expected to commence in
June 1999.  The Company's current facility in Cambridge, Massachusetts, which
houses part of the Company's Northeast operations and corporate functions, is
expected to be subleased to a third party through its remaining lease term.  The
Company's lease at its Allston, Massachusetts facility, which houses the
remainder of the Company's Northeast operations will be terminated effective
June 30, 1999.

The Company expects that cash flows from operations will provide the principal
source of future liquidity for the Company.  However, continued growth could
place a strain on the Company's financial resources. The Company currently
anticipates that existing cash and investment balances combined with cash
generated from operations and amounts available under its $50.0 million
unsecured senior revolving credit facility will be sufficient, at least through
1999, to meet the Company's working capital requirements and to fund the
Company's operations.  In order to meet client demand for the Company's
services, the Company expects to continue to maintain its professional staff and
to open additional sales and operations offices, as needed, in North America and
internationally. The Company plans to open offices and reposition personnel in
response to anticipated demand for the Company's services. Operating results and
liquidity may be adversely affected if market demand and revenues are different
than anticipated. As the Company
                                       15
<PAGE>
 
expands its international operations, a number of factors, including market
acceptance of the Company's services, significant fluctuations in currency
exchange rates, and changes in general economic, political, and regulatory
conditions, could also adversely affect future results and liquidity.


Year 2000 Readiness Disclosure

The Year 2000 issue results from computer programs written using two digits
rather than four to define the applicable year.  Any of the Company's internal
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

The Company has conducted an assessment of its information technology ("IT")
systems and non-IT systems (such as building security, voice mail, telephone and
other systems containing embedded microprocessors) and is in the process of
upgrading and enhancing material internal systems to bring them into material
Year 2000 compliance.  These activities are expected to be completed by the end
of the second quarter of 1999.  The Company's material internal IT systems
consist principally of accounting, human resources and sales force automation
application software created by third parties, plus internally developed time
and expense reporting and project accounting software applications.  For the
third-party software applications, the Company has obtained written confirmation
that the software applications are Year 2000 compliant. The Company also expects
that each of these third party applications will be upgraded, as well as tested
by the Company for Year 2000 compliance by the end of the second quarter of
1999.  The Company believes that its internally developed applications are now
materially Year 2000 compliant. The Company's computer hardware platforms,
principally servers, have been confirmed as Year 2000 compliant by the server
manufacturers, and this has been supported by the Company's internal testing.

Based on currently available information, the Company believes the expense
associated with these efforts will be immaterial and has provided for the
enhancement of these systems in its operating and capital budgets for the
current fiscal year.  However, if compliance efforts of which the Company is not
currently aware are required and are not completed on time, or if the cost of
any required updating, modification or replacement of the Company's IT systems
exceeds the Company's estimates, the Year 2000 issue could have a material
adverse effect on the Company.

In addition to the Company's internal systems, the Company relies on third party
relationships in the conduct of its business.  For example, third party vendors
handle the payroll function for the Company, and the Company also relies on the
services of landlords of its facilities, telecommunication companies, banks,
utilities, and commercial airlines, among others.  The Company is currently
obtaining assurances from its landlords and material vendors and suppliers that
there will be no interruption of service as a result of the Year 2000 issue, and
to the extent such assurances are not given, the Company intends to devise
contingency plans to ameliorate the negative effects on the Company in the event
the Year 2000 issue results in the unavailability of services.  However,
contingency plans developed by the Company may not prevent a service
interruption on the part of one or more of the Company's third party vendors or
suppliers from 

                                       16
<PAGE>
 
having a material adverse effect on the Company. In addition, the failure on the
part of the accounting systems of the Company's clients due to the Year 2000
issue could result in a delay in the payment of invoices issued by the Company
for services and expenses. A failure of the accounting systems of a significant
number of the Company's clients would have a material adverse effect on the
Company.

The Company is preparing written contingency plans to address failures in its
major IT and non-IT systems.  These plans will include identification of major
systems, dependencies on third parties, and resources and strategies necessary
to restore operations or work around failures.  The failure of the Company's
accounting systems resulting from a Year 2000 related power system outage at the
Company's central data center, particularly at the end of a fiscal period, could
represent a reasonably likely worst case scenario.  The Company's contingency
plan provides for back-up power systems that could support the data center, as
well as the operation of a parallel third party disaster recovery site.

Although the Company's principal service offerings do not include Year 2000
remediation services, former, present and future clients could assert that
certain services performed by the Company involved or are related to the Year
2000 issue. The Company has recommended, implemented, and customized various
third-party software packages for its clients, certain of which may not be Year
2000 compliant.  Because the Company has designed, developed and implemented
software and systems for a large number of clients since 1991, there can be no
way of assuring that all such software programs and systems will be Year 2000
compliant.  In particular, the Company's solution delivery methodology, in many
cases, empowers clients to maintain, alter and upgrade systems after the
completion of an engagement.  Due to the potential significance of the Year 2000
issue upon client operations, upon any failure of critical client systems or
processes that may be directly or indirectly connected or related to systems or
software analyzed, designed, developed, or implemented by the Company, the
Company may be subjected to claims regardless of whether the failure is related
to the services provided by the Company.  If asserted, the resolution of such
claims (and the associated defense costs) could have a material adverse effect
on the Company.

The Company's policy has been to attempt to include provisions in client
contracts that, among other things, disclaim implied warranties, limit the
duration of express warranties, limit the Company's liability to the amount of
fees paid by the client to the Company in connection with the project, and
disclaim any liability arising from third-party software that is implemented,
customized or installed by the Company.   The Company may not be able to obtain
these contractual protections in agreements concerning future projects, and
contractual provisions governing current and completed projects may not prevent
clients from asserting claims against the Company with respect to the Year 2000
issue. The contractual protections, if any, obtained by the Company may not
effectively operate to protect the Company from, or limit the amount of, any
liability arising from claims asserted against the Company.

New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company) (see Note E of Notes to Consolidated Financial Statements).

                                       17
<PAGE>
 
Forward-looking Statements

This Form 10-Q includes forward-looking statements (statements that are not
historical facts), including, without limitation: statements about future net
revenues and profits; capital expenditures; liquidity sources and needs; working
capital needs; the Year 2000 issue; the impact of the realignment of the
Company's North American operations in 1999; statements about the Company's
charge for its human resources repositioning and retention program; the
Company's efforts to retain, retrain, relocate, and strategically redeploy
employees; the Company's hiring efforts; increases in personnel and related
costs; geographic expansion and opening additional offices; and litigation
involving the Company.  These forward-looking statements are subject to several
risks and uncertainties. While it is impossible to identify each factor and
event that could affect the Company's results, there are a number of important
factors that could cause the Company's actual results to differ materially from
those indicated by the forward-looking statements and that could have an impact
on the Company's operating results.  These factors include, without limitation,
the number and significance of client engagements commenced and completed during
a period; the number of working days in a period; employee hiring, retention,
and utilization rates; the Company's ability to manage its growth; the Company's
ability to manage the cost of its engagements; changes in demand for the
Company's services; changes in demand for third party products or solutions for
which the Company performs integration services; risks associated with the
Company's realignment of its North American operations from a geographic-based
to a service line model, including the orientation of new management teams
within the service line structure and the need to develop reliable forecasting
tools for each service line within the organization; the success of the
Company's human resources repositioning and retention program; the Year 2000
issue, including the effect of the Year 2000 issue on client purchasing
patterns; competition; risks associated with international operations; the
acceptance and profitability of the Company's services in new locations; the
integration of acquired businesses; unanticipated negative outcomes of
litigation involving the Company; and misappropriation of, or lack or loss of
protection of, the Company's intellectual property.  The timing of revenues is
difficult to forecast because the Company's sales cycle is relatively long in
the case of new clients and may depend on factors such as the size and scope of
client assignments and general economic conditions.  Because a high percentage
of the Company's expenses are relatively fixed, a variation in the timing of the
initiation or the completion of client assignments, particularly at or near the
end of any quarter, can cause significant variations in operating results from
period to period.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk
-------  ---------------------------------------------------------

The Company is exposed to market risk from changes in interest rates and foreign
currency exchange rates due to investments in instruments made for non-trading
purposes. The interest rate risk relates primarily to the Company's portfolio of
short-term investment grade municipal securities. The Company is also subject to
risk relating to fluctuating interest rates to the extent that it incurs any
borrowings under its credit facility. The foreign exchange rate risk relates to
the Company's investment in foreign exchange contracts which are entered into in
order to mitigate the risk of changes in foreign exchange rates associated with
intercompany balances.  The Company believes that interest rate risk and foreign
currency exchange rate risk are both immaterial to the Company.

                                       18
<PAGE>
 
PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings
-------  -----------------

On November 18, 1998, certain of the former stockholders of Excell filed a
lawsuit against the Company in the United States District Court for the District
of Massachusetts. The complaint alleges breach of contract, violation of federal
securities laws, common law fraud, and negligent misrepresentation in connection
with the Excell acquisition and seeks unspecified damages.  The Company believes
that the plaintiffs' claims are without merit and intends to vigorously defend
the lawsuit.  In February 1999, the Company filed a counterclaim against the
former stockholders of Excell which alleges breach of contract.

In March  and April 1999, certain stockholders of the Company filed ten separate
class action lawsuits against the Company and certain of the Company's officers
in the United States District Court for the District of Massachusetts. The suits
allege misrepresentations and omissions regarding the Company's future growth
prospects and progress of the Company's reorganization in violation of federal
securities laws. The suits seek unspecified damages. The Company believes that
the plaintiffs' claims are without merit and intends to vigorously defend the
lawsuits.

The Company is involved in litigation and various other legal matters, which
have arisen in the ordinary course of business.  The Company does not believe
that the ultimate resolution of any existing matter will have a material adverse
effect on its financial condition, results of operations, or cash flows.

ITEM 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------

(a)  Exhibits:
 
     3.1(1)  Amended and Restated Certificate of Incorporation of the
             Company, as amended.
     3.2(2)  Amended and Restated By-laws of the Company.
     4.1(3)  Rights Agreement dated June 23, 1997 by and between the Company and
             ChaseMellon Shareholder Services, LLC ( the "Rights Agreement").
     4.2(4)  Amendment No. 1 to the Rights Agreement dated September 30, 1998 by
             and between the Company and ChaseMellon Shareholder Services, LLC.
    10.1     Amended and Restated 1991 Stock Option Plan, as amended.
    10.2     1998 Stock Option Plan, as amended.
    11       Statement Regarding Computation of Per Share Earnings.
    27       Financial Data Schedule.
 

                                       19
<PAGE>
 
--------------------------------------------------------------------------------
(1)  Incorporated herein by reference to Exhibit 3.1 to the Company's Report on
     Form 10-Q for the period ended June 30, 1998.
(2)  Incorporated herein by reference to Exhibit 3.2 to the Company's
     Registration Statement on Form S-1 (File No. 33-56338).
(3)  Incorporated herein by reference to Exhibit 4.1 to the Company's
     Registration Statement on Form 8A/A filed on September 30, 1998.
(4)  Incorporated herein by reference to Exhibit 4.2 to the Company's
     Registration Statement on Form 8A/A filed on September 30, 1998.


(b)  Reports on Form 8-K:

     The Company did not file any current reports on Form 8-K during the three
     months ended March 31, 1999.

                                       20
<PAGE>
 
                                   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.


              CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.


        Date:  May 13, 1999         By: /s/ Arthur M. Toscanini
                                       ------------------------ 
                                       Arthur M. Toscanini
                                       Executive Vice President and
                                          Chief Financial Officer

                                    By: /s/ Louis P. Persico
                                       ---------------------
                                       Louis P. Persico
                                       Vice President, Controller and
                                          Chief Accounting Officer

                                       21
<PAGE>
 

                                 EXHIBIT INDEX


     3.1(1)  Amended and Restated Certificate of Incorporation of the
             Company, as amended.
     3.2(2)  Amended and Restated By-laws of the Company.
     4.1(3)  Rights Agreement dated June 23, 1997 by and between the Company and
             ChaseMellon Shareholder Services, LLC ( the "Rights Agreement").
     4.2(4)  Amendment No. 1 to the Rights Agreement dated September 30, 1998 by
             and between the Company and ChaseMellon Shareholder Services, LLC.
    10.1     Amended and Restated 1991 Stock Option Plan, as amended.
    10.2     1998 Stock Option Plan, as amended.
    11       Statement Regarding Computation of Per Share Earnings.
    27       Financial Data Schedule.
 

-------------------------------------------------------------------------------
(1)  Incorporated herein by reference to Exhibit 3.1 to the Company's Report on
     Form 10-Q for the period ended June 30, 1998.
(2)  Incorporated herein by reference to Exhibit 3.2 to the Company's
     Registration Statement on Form S-1 (File No. 33-56338).
(3)  Incorporated herein by reference to Exhibit 4.1 to the Company's
     Registration Statement on Form 8A/A filed on September 30, 1998.
(4)  Incorporated herein by reference to Exhibit 4.2 to the Company's
     Registration Statement on Form 8A/A filed on September 30, 1998.