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

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                         _____________________________
                                        
                                   FORM 10-Q
                                        
(MARK ONE)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997.

                                      OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________  TO
     ___________.

                      COMMISSION FILE NUMBER:  000-22697
                                        
                              AT HOME CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                           77-0408542
   (STATE OR OTHER JURISDICTION OF         (I.R.S. EMPLOYEE  IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)

                              425 BROADWAY STREET
                            REDWOOD CITY, CA  94063
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
                                        
     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:    (650) 569-5000

FORMER NAME, FORMER ADDRESS, AND FORMER YEAR, IF CHANGED SINCE LAST REPORT: NOT
                                  APPLICABLE

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 __
                                 -                     

THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, $0.01 PAR VALUE, 
OUTSTANDING AS OF OCTOBER 31, 1997: 88,240,810 SHARES OF SERIES A COMMON STOCK,
15,400,000 SHARES OF SERIES B COMMON STOCK, AND 14,877,660 SHARES OF SERIES K 
COMMON STOCK.

================================================================================
<PAGE>
 
                              AT HOME CORPORATION

                                     INDEX

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Condensed Consolidated Financial Statements

          Condensed Consolidated Balance Sheets-September 30, 1997
          and December 31, 1996                                             3

          Condensed Consolidated Statements of Operations-Three and Nine
          months ended September 30, 1997 and 1996                          4

          Condensed Consolidated Statements of Cash Flows-Nine
          months ended September 30, 1997 and 1996                          5

          Notes to Condensed Consolidated Financial Statements              6

Item 2.   Management's Discussion and Analysis of Financial Condition       
          and Results of Operations                                         8

Item 3.   Quantitative and Qualitative Disclosures about Market Risk       17


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                18

Item 2.   Change in Securities and Use of Proceeds                         18

Item 5.   Other Information                                                19

Item 6.   Exhibits and Reports on Form 8-K                                 19

Signatures                                                                 20
</TABLE>

                                       2
<PAGE>
 
PART I.

ITEM 1.  FINANCIAL STATEMENTS

                              AT HOME CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                              September 30,   December 31,
                                                                   1997           1996    
                                                            ------------------------------
<S>                                                         <C>               <C>         
ASSETS                                                                                    
Current assets:                                                                           
  Cash and cash equivalents                                        $ 59,046       $  9,709
  Short-term cash investments                                        73,639          7,061
                                                            ------------------------------
    Total cash, cash equivalents and                                                      
       short-term cash investments                                  132,685         16,770
  Accounts receivable                                                   714            164
  Accounts receivable - related parties                                 530            640
  Other current assets                                                2,903            741
                                                            ------------------------------
Total current assets                                                136,832         18,315
Property, equipment and improvements, net                            29,577         14,328
Other assets                                                          1,676            745
                                                            ------------------------------
Total assets                                                       $168,085       $ 33,388
                                                            ==============================
                                                                                          
                                                                                          
LIABILITIES AND STOCKHOLDERS' EQUITY                                                      
Current liabilities:                                                                      
  Accounts payable                                                 $  2,186       $  1,946
  Accounts payable - related parties                                    887          1,482
  Accrued compensation and related expenses                             599            248
  Other accrued liabilities                                           7,418            885
  Current portion of capital lease obligations                        9,912          3,181
                                                            ------------------------------
Total current liabilities                                            21,002          7,742
Capital lease obligations, less current portion                      14,257          5,654
                                                                                          
Other long-term liabilities                                           1,779          1,675
Commitments and contingencies                                                             
                                                                                          
Stockholders' equity:                                                                     
  Preferred Stock                                                      ----         44,993
  Common Stock                                                      198,074          1,035
  Notes receivable from stockholders                                   (335)          (170)
  Deferred compensation                                              (4,725)          (272)
  Accumulated deficit                                               (61,967)       (27,269)
                                                            ------------------------------
Total stockholders' equity                                          131,047         18,317
                                                            ------------------------------
Total liabilities and stockholders' equity                         $168,085       $ 33,388
                                                            ============================== 
</TABLE>

See accompanying notes.

                                       3
<PAGE>
 
                              AT HOME CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               Three Months Ended September 30,    Nine Months Ended September 30,
                                                               --------------------------------    -------------------------------
                                                                      1997             1996             1997              1996
                                                               ----------------    -------------   -------------      -----------
<S>                                                            <C>                 <C>             <C>                <C> 
Revenues (1)                                                           $  1,907         $    141        $  3,737        $     141
 
Costs and expenses:
           Operating costs                                                6,203            1,968          15,368            3,749
           Product development and engineering                            3,137            1,918           8,411            4,724
           Sales and marketing                                            2,937            1,855           8,815            3,975
           General and administrative                                     2,861            1,858           7,521            3,593
                                                               ----------------    -------------   -------------      -----------

                                 Total costs and expenses                15,138            7,599          40,115           16,041
                                                               ----------------    -------------   -------------      -----------
 
Loss from operations                                                    (13,231)          (7,458)        (36,378)         (15,900)
 
Interest income, net                                                      1,337              212           1,680              375
                                                               ----------------    -------------   -------------      -----------
 
Net loss                                                               $(11,894)        $ (7,246)       $(34,698)       $ (15,525)
                                                               ================    =============   =============      ===========
 
Pro forma net loss per share                                           $  (0.10)        $  (0.07)       $  (0.31)       $   (0.14)
                                                               ================     ============   =============      ===========

Pro forma shares used in per share calculations                         116,645          110,065         112,258          110,065
                                                               ================    =============   =============      ===========
-------------------------------
(1) Revenues from related parties                                     $     739         $    132        $  2,087        $     132
 
</TABLE>

See accompanying notes.

                                       4
<PAGE>
 
                              AT HOME CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                            Nine Months Ended September 30,
                                                                                     ---------------------------------------------
                                                                                             1997                      1996
                                                                                     --------------------        -----------------
<S>                                                                                  <C>                         <C> 
Cash used in operating activities
     Net loss                                                                                  $  (34,698)                $(15,525)
                                                                                          
     Adjustments to reconcile net loss to cash used in operating activities:
          Amortization of deferred compensation                                                       804                       29
          Depreciation and amortization                                                             5,311                      787
          Change in assets and liabilities:                                               
               Accounts receivable, including related parties                                        (440)                    (174)
               Other assets                                                                        (1,794)                     106
               Accounts payable                                                                      (355)                   2,359
               Accrued compensation and related expenses                                              351                      131
               Other accrued liabilities                                                            6,533                      949
               Other long-term liabilities                                                            104                      550
                                                                                     --------------------        -----------------
Cash (used in) operating activities                                                               (24,184)                 (10,788)
 
Cash (used in) investing activities
     Purchase of short-term cash investments                                                      (74,644)                  (6,959)
     Sales and maturities of short-term cash investments                                            8,066                     ----
     Purchase of property, equipment and improvements                                              (7,678)                  (7,299)
                                                                                     --------------------        -----------------
Cash (used in) investing activities                                                               (74,256)                 (14,258)
 
Cash provided by financing activities
     Net proceeds from issuance of convertible preferred stock                                     46,528                   35,025
     Net proceeds from issuance of common stock                                                    99,919                      198
     Proceeds from capital lease financing                                                          5,630                    1,500
     Payments on capital lease obligations                                                         (4,477)                     (54)
     Repayments of notes receivable from stockholders                                                 177                     ----
                                                                                     --------------------        -----------------
Cash provided by financing activities                                                             147,777                   36,669

                                                                                     --------------------        -----------------
Net increase  in cash and cash equivalents                                                         49,337                   11,623
 
Cash and cash equivalents, beginning of period                                                      9,709                    6,906

                                                                                     --------------------        -----------------
Cash and cash equivalents, end of period                                                       $   59,046                 $ 18,529
                                                                                     ====================        =================
 
Supplemental disclosures
     Interest paid                                                                             $      579                 $     29
                                                                                     ====================        =================
     Acquisition of equipment under capital leases                                             $   12,882                 $  3,597
                                                                                     ====================        =================
     Financing of acquisition of other assets                                                  $    1,299                 $   ----
                                                                                     ====================        =================
     Notes receivable from stockholders issued in                          
       connection with exercise of stock options                                  
       and restricted stock purchases                                                          $      342                 $    133
                                                                                     ====================        =================
</TABLE> 
 
See accompanying notes.

                                       5
<PAGE>
 
                              AT HOME CORPORATION
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements, include
the accounts of At Home Corporation, and it's wholly owned subsidiary
(collectively, the "Company").  These unaudited condensed consolidated financial
statements do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been included in
the accompanying unaudited financial statements. Operating results for the three
and nine months ended September 30, 1997 are not necessarily indicative of the
results that may be expected for the full year ending December 31, 1997. For
further information, refer to the consolidated financial statements and notes
thereto, included in the Company's Prospectus dated July 11, 1997 filed as part
of a Registration Statement on Form S-1 (Registration No. 333-27323), as
amended).

Note 2. Stockholders' Equity

In July, 1997, the Company completed its initial public stock offering and
issued 10,350,000 shares (including 1,350,000 shares issued in connection with
the exercise of the underwriters' over-allotment option) of its Common Stock to
the public at a price of $10.50 per share. The Company received net proceeds of
approximately $99.9 million in cash. Concurrent with the initial public
offering, each outstanding share of the Company's Preferred Stock was
automatically converted into twenty shares of Common Stock.

Note 3. Pro Forma Net Loss Per Share

Except as noted below, pro forma net loss per share is computed using the
weighted average number of common shares outstanding and also gives effect to
the assumed conversion of all outstanding shares of convertible preferred stock
into common stock upon the closing of the Company's initial public offering
(using the as-if-converted method).  Common equivalent shares are excluded from
the computation as their effect is antidilutive, except that pursuant to
applicable Securities and Exchange Commission Staff Accounting Bulletins, common
and common equivalent shares (from stock options and warrants) issued during the
period commencing twelve months prior to the initial filing date of the initial
public offering at prices below the public offering price have been included in
the calculation as if they were outstanding for all periods presented prior to
the initial filing date (using the treasury stock method).

Note 4. Impact of Recently Issued Accounting Standards

In February, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("FAS") No. 128, "Earnings per Share" ("SFAS No.
128").  SFAS 128 specifies the computation, presentation and disclosure
requirements for earnings per share for entities with publicly held common stock
or potential common stock.  This statement is effective for financial statements
issued for periods ending after December 15, 1997.  Under the new requirements,
primary earnings per share (referred to as basic earnings per share under the
new pronouncement) will exclude the dilutive effect of stock options.  The
impact of SFAS 128 on the calculation of the Company's reported pro forma net
loss per share is not expected to be material.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income," which
establishes standards for reporting and displaying comprehensive income and its
components, is required to be adopted by the Company 

                                       6
<PAGE>
 
beginning in 1998. Additionally, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information," which establishes reporting standards
regarding operating segments, products and services, geographic areas and major
customers. The Company is required to adopt these Statements in 1998. Adoption
of these Statements is expected to have no impact on the Company's consolidated
financial position, results of operations, or cash flows.

Note 5. Bank Term Loan Agreement

In September, 1997, the Company entered into a Term Loan Agreement ("Term Loan")
with Silicon Valley Bank (the "Bank"). The Term Loan provides for borrowings of
up to $8 million to finance the acquisition of property, equipment and
improvements, and to collateralize letters of credit. Borrowings under this Term
Loan bear interest at the Bank's prime rate. There were no borrowings under this
Term Loan as of September 30, 1997. Under the terms of the Term Loan, the
Company is required to meet certain financial covenants. The Term Loan expires
in September, 2001.

Note 6. Subsequent Events

Effective October 2, 1997, the Company entered into a Letter Agreement and Term
Sheet with Cablevision Systems Corporation ("Cablevision"), and it's parent, CSC
Parent Corporation ("CSC Parent"), Comcast Corporation ("Comcast"), Cox
Enterprises, Inc. ("Cox"), Kleiner, Perkins, Caufield & Byers and Tele-
Communications, Inc. ("TCI") (the "Agreement").  The Agreement provides that
Cablevision will enter into a Master Distribution Agreement for the distribution
of the Company's @Home service on substantially the same terms and conditions as
TCI, Comcast and Cox.  Although Cablevision is subject to certain exclusivity
obligations that prohibit it from obtaining high-speed (greater than 128
kilobits per second ("Kbps")) residential consumer Internet services from any
source other than the Company, Cablevision is under no obligation to upgrade its
cable systems to two-way cable infrastructure and is under no affirmative
obligation to roll out, market, promote or carry any of the Company's services.
The exclusivity obligations in favor of the Company expire on June 4, 2002, and
may be terminated sooner under certain circumstances.  These exclusivity
obligations also are subject to exceptions that would permit Cablevision to
engage in certain activities which could compete, directly or indirectly, with
the activities of the Company.

The Agreement provides for the issuance to Cablevision and CSC Parent of a
warrant to purchase up to 7,875,784 shares of the Company's Series A Common
Stock at an exercise price of $.50 per share (the "Warrant").  The Warrant is
immediately exercisable, subject to the receipt of all necessary governmental
consents or approvals.  The Agreement provides for the issuance of an additional
warrant to  Cablevision and CSC Parent to purchase up to 3,071,152 shares of
the Company's Series A Common Stock at an exercise price of $.50 per share under
certain conditions (the "Contingent Warrant").  The Contingent Warrant is not
immediately exercisable and will become exercisable as and to the extent certain
cable television systems are transferred from TCI and its controlled affiliates
to CSC, CSC Parent or their controlled affiliates.  Copies of the Agreement, the
related Warrant Purchase Agreement, the Warrant and the Contingent Warrant have
been included filed as attachments to the Form 8-K filed with the Securities and
Exchange Commission on October 22, 1997.

                                       7
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
        OF OPERATIONS

The following discussion contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended, and is subject to the safe
harbors created by those sections. These forward-looking statements are subject
to significant risks and uncertainties, including those identified in the
section of this Form 10Q entitled "Factors That May Affect Future Results" and
in the Company's Final Prospectus for its initial public offering filed with the
SEC on July 11, 1997, which may cause actual results to differ materially from
those discussed in such forward-looking statements. The forward-looking
statements within this Form 10-Q are identified by words such as "believes,"
"anticipates," "expects," "intends," "may" and other similar expressions.
However, these words are not the exclusive means of identifying such statements.
In addition, any statements which refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking
statements. The Company undertakes no obligation to publicly release the results
of any revisions to these forward-looking statements which may be made to
reflect events or circumstances occurring subsequent to the filing of this Form
10-Q with the Securities and Exchange Commission. Readers are urged to carefully
review and consider the various disclosures made by the Company in this report
and in the Company's other reports filed with the Securities and Exchange
Commission, including its Final Prospectus, that attempt to advise interested
parties of the risks and factors that may affect the Company's business.

GENERAL

The Company is a leading provider of Internet services to consumers and
businesses over the cable television infrastructure.   To overcome fundamental
architectural limitations of the Internet, the Company has been developing and
deploying the Company's network (the "@Network"), a scaleable, distributed
network that links its private high-speed nationwide backbone to hybrid fiber-
coaxial ("HFC") cable systems.

The Company's primary offering, the @Home service, allows residential
subscribers to connect their personal computers via cable modems to the
Company's new high-speed "parallel Internet." The Company has agreements with
eight leading North American cable companies for the distribution of the
Company's high-bandwidth residential consumer Internet services over their cable
systems.

The @Home service is currently offered by TCI, Comcast ,Cox InterMedia Partners
IV L.P. ("InterMedia") to consumers in 16 markets in the United States. As of
September 30, 1997, the Company had approximately 26,000 cable modem
subscribers, of which approximately 17,000 were in the United States. In
addition, the Company was in the process of converting approximately 9,000
subscribers currently receiving the Wave interactive service provided by Rogers
Cablesystems Limited ("Rogers") and Shaw Cablesystems Ltd. ("Shaw") in Canada.

Effective October 2, 1997, the Company entered into a Letter Agreement and Term
Sheet with Cablevision, CSC Parent, Comcast, Cox, Kleiner, Perkins, Caufield &
Byers and TCI. The Agreement provides that Cablevision will enter into a Master
Distribution Agreement for the distribution of the Company's @Home service on
substantially the same terms and conditions as TCI, Comcast and Cox. Although
Cablevision is subject to certain exclusivity obligations that prohibit it from
obtaining high-speed (greater than 128 kilobits per second ("Kbps")) residential
consumer Internet services from any source other than the Company, Cablevision
is under no obligation to upgrade its cable systems to two-way cable
infrastructure and is under no affirmative obligation to roll out, market,
promote or carry any of the Company's services. The exclusivity obligations in

                                       8
<PAGE>
 
favor of the Company expire on June 4, 2002, and may be terminated sooner under
certain circumstances.  These exclusivity obligations also are subject to
exceptions that would permit Cablevision to engage in certain activities which
could compete, directly or indirectly, with the activities of the Company.

The Agreement provides for the issuance to Cablevision and CSC Parent of a
warrant to purchase up to 7,875,784 shares of the Company's Series A Common
Stock at an exercise price of $.50 per share (the "Warrant").  The Warrant is
immediately exercisable, subject to the receipt of all necessary governmental
consents or approvals.  The Agreement provides for the issuance of an additional
warrant to Cablevision and CSC Parent to purchase up to 3,071,152 shares of the
Company's Series A Common Stock at an exercise price of $.50 per share under
certain conditions (the "Contingent Warrant").  The Contingent Warrant is not
immediately exercisable and will become exercisable as and to the extent certain
cable television systems are transferred from TCI and its controlled affiliates
to CSC, CSC Parent or their controlled affiliates.  Copies of the Agreement, the
related Warrant Purchase Agreement, the Warrant and the Contingent Warrant have
been included as attachments to the Form 8-K filed with the Securities and
Exchange Commission on October 22, 1997. The Company anticipates that it will
record a non-cash, non-recurring charge in the fourth quarter of 1997 based on
the fair value of the Warrant. The valuation of the Warrant has not been
completed, however the Company estimates the fair value to be approximately
$200 million. Additional charges to operations will be recorded if and when
the Contingent Warrant becomes exercisable.

For businesses, the Company's @Work services provide a platform for Internet,
intranet and extranet connectivity solutions and networked business applications
over both cable infrastructure and leased digital telecommunications lines.   In
order to accelerate deployment of @Work services into major metropolitan areas,
the Company has established a strategic relationship with Teleport
Communications Group ("TCG"), the country's largest competitive local exchange
carrier (CLEC),  to provide co-location facilities and local telephone circuits
for infrastructure and subscriber connectivity.  @Work Internet, a high-speed
Internet connectivity service for commercial enterprises provided over both HFC
cable and leased digital telecommunications lines, is currently available in 11
metropolitan markets including Chicago, Los Angeles, New York, Orange County,
San Diego, San Francisco, Seattle, Land Washington, DC. As of September 30,
1997, the Company was receiving revenues from nearly 200 business customers and
had agreements with more than 100 additional business customers to begin to
install service. Substantially all of these agreements are for services over
telecommunications lines.

The Company expects to generate substantially all of its revenues through 1998
from monthly fees from subscribers to the @Home service, the @Work Internet
service, the @Work Remote service (a telecommuting service provided over HFC
cable) and from customer services provided to the Company's cable affiliates.
The Company believes that a growing subscriber base will generate @Media
division advertising revenues, as well as revenues from premium services and
transaction processing.

The Company has incurred substantial net losses in each fiscal period since its
inception and, as of September 30, 1997, had an accumulated deficit of $66.7
million (including deferred compensation). The Company currently intends to
increase its capital expenditures as well as its sales and marketing
expenditures in order to expand its network to support additional expected
subscribers in existing and future markets and to provide the Company's services
to a growing number of potential subscribers. As a result, the Company expects
to incur additional substantial net losses for the foreseeable future.

                                       9
<PAGE>
 
RESULTS OF OPERATIONS

REVENUES (Amounts in thousands)

<TABLE>
<CAPTION>
                         Three    Three              Nine     Nine
                         months   months            Months   Months
                         Ended    Ended   Percent   Ended    Ended    Percent
                        9/30/97  9/30/96  Change   9/30/97  9/30/96   Change
<S>                     <C>      <C>      <C>      <C>      <C>       <C>
Total Revenues          $1,907    $141    1,252%   $3,737   $141      2,550%
</TABLE>

Revenues consist of monthly subscription fees for the @Home residential service,
installation and monthly access fees for @Work Internet services, and fees for
customer support activities for cable system operators, all of which are
recognized during the period in which services are provided.  In the United
States, the @Home service is sold for a flat monthly fee generally ranging from
$35-$55, which currently includes the cost of a cable modem.  Under the current
arrangements in the United States, the Company receives 35% of such monthly
fees.  In Canada, the Company receives a smaller percentage of the monthly
subscription fees billed by Rogers and Shaw because they bear the costs of
providing additional customer support, data transport, marketing and programming
for the Canadian market.  Total revenues were $1.9 million and $141,000 for the
three months ended September 30, 1997 and 1996, respectively.  Total revenues
were $3.7 million and $141,000 for the nine months ended September 30, 1997 and
1996, respectively. A significant amount of the revenues to date have been
derived from customer services provided to TCI and Comcast.  Revenues from these
related parties for the three and nine months ended September 30, 1997 were 39%
and 56%, as compared to 94% and 94% for the corresponding periods of 1996.  The
percentage of revenues received from related parties is anticipated to decrease
significantly in subsequent periods.  During the three months ended September
30, 1997, revenues from the @Work Internet service and revenues from the @Home
service in Canada began to contribute significantly to the Company's total
revenues.  The Company anticipates that revenues from @Work services will
continue to increase as a percentage of total revenue in subsequent quarters.

COSTS AND EXPENSES (Amounts in thousands)

<TABLE> 
<CAPTION>  
                         Three    Three              Nine     Nine
                         months   months            Months   Months
                         Ended    Ended   Percent   Ended    Ended    Percent
                        9/30/97  9/30/96  Change   9/30/97  9/30/96   Change
<S>                     <C>      <C>      <C>      <C>      <C>       <C>  
Operating Costs         $ 6,203   $1,968   215%    $15,368  $ 3,749   310%    
                                                                              
Product Dev.            $ 3,137   $1,918    64%    $ 8,411  $ 4,724    78%    
and Engineering                                                               
                                                                              
Sales and               $ 2,937   $1,855    58%    $ 8,815  $ 3,975   122%   
Marketing                                                            
                                                                     
General and             $ 2,861   $1,858    54%    $ 7,521  $ 3,593   109%
Administrative                                                       
                                                                     
Total Costs             $15,138   $7,599    99%    $40,115  $16,041   150%
and Expenses
</TABLE> 

                                       10
<PAGE>
 
Total costs and expenses were $15.1 million and $7.6 million for the three
months ended September 30, 1997 and 1996, respectively.  Total costs and
expenses for the nine months ended September 30, 1997 and 1996, were $40.1
million and $16.0 million, respectively.  These period-to-period increases were
primarily a result of additional activities related to the development, testing
and deployment of the @Network and to support the subscriber growth of the @Home
service and the deployment of the @Work Internet service.   The Company believes
continued expansion of operations as well as its network infrastructure is
critical to the achievement of its goals and anticipates that costs and expenses
will continue to increase in each quarter for the foreseeable future.

Operating Costs.   Operating costs are primarily related to providing services
to customers and maintaining the @Network infrastructure, which includes the
functional areas of customer and technical support, regional data centers,
content programming, and @Home and @Work telecommunications costs.  Included in
operating costs are salaries and related expenses for personnel,
telecommunication ("transport") costs and the depreciation, amortization and
maintenance of capital equipment.  Operating costs were $6.2 million and $2.0
million for the three months ended September 30, 1997 and 1996, respectively.
These increases were primarily a result of:  development of additional content
programming resources; additional transport costs to support the deployment of
the @Network to additional sites;, @Work operating costs; maintenance and
depreciation of capital equipment; and increased customer operations
expenditures to support a larger subscriber base.

Operating costs for the nine months ended September 30, 1997 and 1996, were
$15.4 million and $3.7 million, respectively. The increase in the nine months
ended September 30, 1997, compared to the corresponding period of 1996, was
principally attributable to activities associated with transport costs to
support the rollout of the @Network, the launch of the @Work Internet service,
maintenance and depreciation of capital equipment, customer service operations,
content programming expenditures and the increase in Regional Data Centers from
five as of December 31, 1996 to eighteen as of September 30, 1997.

Product Development and Engineering.   Product development and engineering
expenses consist primarily of salaries and related expenses for personnel, fees
to outside contractors and consultants, the allocated cost of facilities, and
the depreciation and amortization of capital equipment.  These expenses are
primarily incurred in three areas:  the design, testing and deployment of the
@Network; the development of software tools and enabling platforms for the
creation and distribution of enhanced content; and applications development
specifically designed to take advantage of the @Network and the development of
@Work Internet services.  Product development and engineering expenses were
$3.1 million and $1.9 million for the three months ended September 30, 1997 and
1996, respectively. Product development and engineering expenses for the nine
months ended September 30, 1997 and 1996, were $8.4 million and $4.7 million,
respectively. The increases in expenses for the three and nine month periods
ended September 30, 1997, as compared to the corresponding periods of 1996, were
principally attributable to increases in personnel and related expenses.
Product development and engineering costs have been expensed as incurred.

Sales and Marketing.  Sales and marketing expenses consist primarily of
salaries, commissions and promotional expenses. Sales and marketing expenses
were $2.9 million and $1.9 million for the three months ended September 30, 1997
and 1996, respectively.  Sales and marketing expenses for the nine months ended
September 30, 1997 and 1996, were $8.8 million and $4.0 million, respectively.
The increase in the three and nine month periods ended September 30, 1997, as
compared to the corresponding periods of 1996, were principally the result of:
continued increases in sales and marketing activities to support the expansion
of regional deployments of the @Home and @Work services; the expansion of the
Company's sales force and related travel and entertainment expenses;
expenditures for trade shows; and increased marketing activities, including
market development funds, to attract additional cable partners, subscribers and
corporate accounts.

                                       11
<PAGE>
 
General and Administrative.  General and administrative expenses consist
primarily of administrative and executive personnel costs, fees for professional
services and the costs of in-house systems and infrastructure to support the
operations of the Company.  General and administrative expenses were $2.9
million and $1.9 million for the three months ended September 30, 1997 and 1996,
respectively, and $7.5 million and $3.6 million for the nine months ended
September 30, 1997 and 1996, respectively. These increases were the result of
additions of personnel to support the operations of the Company and their
related costs, stock compensation charges resulting from stock options and
restricted stock purchase agreements, additional facilities expenditures and
additional expenses incurred as a result of being a public company.

INTEREST INCOME, NET

Interest income, net was $1.3 million and $212,000 for the three months ended
September 30, 1997 and 1996, respectively.  For the nine months ended September
30, 1997 and 1996, interest income, net was $1.7 million and $375,000,
respectively.  These increases were principally due to the increased balances
available to invest resulting from the Company's Series C Preferred Stock
financing in April 1997, and its initial public offering in July 1997.  Interest
income, net, represents interest earned by the Company on its cash and short-
term cash investments, less interest expense on capital lease obligations.

NET LOSS

The net loss was $11.9 million and $7.2 million for the three months ended
September 30, 1997 and 1996, respectively.  The net loss for the nine months
ended September 30, 1997 and 1996 was $34.7 million and $15.5 million,
respectively. The increased loss in both comparable periods was due primarily to
increases in expenses as a result of additional business activities, partially
offset by the additional revenues attributable to the launch of the Company's
@Home and @Work services.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its operations primarily through a
combination of private and public sales of equity securities and capital
equipment leases. At September 30, 1997, the principal source of liquidity for
the Company was $132.7 million of cash, cash equivalents and short-term cash
investments, as compared to $16.8 million at December 31, 1996. The Company
finances and expects to continue financing its substantial capital equipment
expenditures from a variety of sources, including direct vendor leasing
programs, third party commercial leasing arrangements and bank financing.

In September, 1997, the Company entered into a Term Loan Agreement ("Term Loan")
with Silicon Valley Bank (the "Bank"). The Term Loan provides for borrowings of
up to $8 million to finance the acquisition of property, equipment and
improvements, and to collateralize letters of credit. Borrowings under this Term
Loan facility bear interest at the Bank's prime rate. There were no borrowings
under this Term Loan as of September 30, 1997. Under the terms of the Term
Loan, the Company is required to meet certain financial covenants. The
Term Loan expires in September 2001.

Cash used in operating activities for the nine months ended September 30, 1997
and 1996, was $24.2 and $10.8 million, respectively, primarily as a result of
net losses.

For the nine months ended September 30, 1997, cash used in investing activities
was $74.3 million, primarily from purchases of short-term cash investments
($74.6 million) and cash purchases of property, equipment, and improvements
($7.7 million), slightly offset by sales and maturities of short-term cash
investments ($8.1 million). For the nine months ended September 30, 1996, cash
used in investing activities of $14.3 million was primarily the result of cash
purchases of property,

                                       12
<PAGE>
 
equipment and improvements ($7.3 million) as well as purchases of short-term
cash investments ($7.0 million). Gross capital expenditures for equipment,
software, furniture, leasehold improvements and fixtures for the nine months
ended September 30, 1997 and 1996, were $20.6 million and $10.9 million,
respectively, of which $12.9 million and $3.6 million, respectively, were
financed through capital leases. The Company expects to expend approximately
$12.0 million for property, equipment and improvements in the three months
ending December 31, 1997, much of which will be financed through capital leases.

Cash provided by financing activities for the nine months ended September 30,
1997 was $147.8 million, resulting primarily from net proceeds of $46.5
million from the sale of Preferred Stock in April 1997, and net proceeds from
the Company's initial public offering in July 1997 of $99.9 million.  For the
comparable nine month period of 1996, cash provided by financing activities was
$36.7 million, resulting primarily from net proceeds from the sale of Preferred
Stock.

The Company believes that it has the financial resources needed to meet its
presently anticipated business requirements, including capital expenditure and
strategic operating programs for at least the next twelve months.  Thereafter,
if cash generated by operations is insufficient to satisfy the Company's
liquidity requirements, the Company may need to sell additional equity or debt
securities or obtain additional credit facilities.  The sale of additional
equity or convertible debt securities may result in additional dilution to the
Company's stockholders. There can be no assurance that the Company will be able
to raise any such capital on terms acceptable to the Company or at all.

FACTORS THAT MAY AFFECT FUTURE RESULTS
 
UNPROVEN BUSINESS; NO ASSURANCE OF PROFITABILITY. The Company was incorporated
in March 1995, commenced operations in August 1995 and has incurred substantial
net losses in each fiscal period since its inception. As of September 30, 1997,
the Company had an accumulated deficit of $66.7 million (including deferred
compensation). In addition, the Company currently intends to increase its
capital expenditures and operating expenses in order to expand its network to
support additional expected subscribers in existing and future markets and to
market and provide the Company's services to a growing number of potential
subscribers. As a result, the Company expects to incur substantial operating and
net losses for the foreseeable future. The profit potential of the Company's
business is unproven. The Company's @Home service has only recently been
launched, and there can be no assurance that it will achieve broad consumer or
commercial acceptance. It is difficult to predict whether the Company's pricing
model will prove to be viable, whether demand for the Company's services will
materialize at the prices it expects the cable affiliates to charge or whether
current or future pricing levels will be sustainable. If such pricing levels are
not achieved or sustained or if the Company's services do not achieve or sustain
broad market acceptance, the Company's business, operating results and financial
condition will be materially adversely affected. There can be no assurance that
the Company will ever achieve favorable operating results or profitability.

SUBSCRIBER GROWTH RISKS. Currently, the Company has approximately 26,000 cable
modem subscribers. The Company's ability to increase the number of subscribers
to the @Home service to achieve its business plans and generate future revenues
will be dependent on a number of factors, many of which are beyond the Company's
control, including, among others, the rate at which the Company's current and
future cable affiliates upgrade their cable infrastructures, the ability of the
Company and its cable affiliates to coordinate timely and effective marketing
campaigns with the availability of such upgrades, the success of the cable
affiliates in marketing the @Home service to subscribers in their local cable
areas, the prices that the cable affiliates set for the @Home service and its
installation, and the rate at which the cable affiliates can complete the
installations required to initiate service for new subscribers. Because of the
foregoing factors, among others, the Company is able to forecast its revenues or
the rate at which it will add new subscribers with only a limited

                                       13
<PAGE>
 
degree of accuracy. There can be no assurance that the Company will be able to
increase its subscriber base in accordance with its internal forecasts or the
forecasts of industry analysts or to a level that meets the expectations of
investors. Although the Company and Intel Corporation have recently announced a
joint development effort for creating and marketing a "plug and play" standard
for high-speed cable modems, which could reduce the time and personnel required
to install the @Home service for new subscribers, there can be no assurance that
this effort will be successful. While approximately 9,000 customers in Canada
currently are being converted from the Wave service offered by Rogers and Shaw,
deployment in Canada has been slower than the Company anticipated. The rate at
which subscribers have increased during the first three quarters of 1997 should
not be taken as indicative of the rate at which subscribers may be expected to
increase in the future. In particular, while the Company has forecast that its
number of subscribers may grow by up to 100% in the fourth quarter of 1997 from
approximately 26,000 subscribers in the third quarter of 1997, there can be no
assurance that the Company will achieve this level of subscriber growth,
particularly given the risks set forth in this "Factors That May Affect Future
Results" section.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.  The Company's quarterly
operating results may fluctuate significantly in the future as a result of a
variety of factors, many of which are outside the Company's control.  Factors
that may affect the Company's quarterly operating results attributable to its
@Home service include the timing of the Company's cable affiliates' upgrades of
their cable infrastructures and rollouts of the @Home service, the rate at which
customers subscribe to the Company's Internet services and the prices
subscribers pay for such services, subscriber churn rates, changes in the
revenue splits between the Company and its cable affiliates, the demand for
Internet advertising, the effectiveness of the cable affiliates' marketing and
other operations, and potential competition with cable affiliates for
advertising revenue.  Quarterly operating results attributable to the Company's
@Work services are dependent on:  the demand for, and level of acceptance of,
the Company's corporate Internet, intranet and extranet connectivity and
telecommuting solutions; the introduction of, demand for, and level of
acceptance of, the Company's value-added business applications; and, in part, on
the timing of the cable affiliates' upgrades of their cable infrastructures.
The Company operates with very little backlog, and quarterly sales and operating
results are difficult to forecast even in the short term.  A significant portion
of the Company's expenses are fixed in advance based in large part on future
revenue forecasts.  If revenue is below expectations in any given quarter, the
adverse impact of the shortfall on the Company's operating results may be
magnified by the Company's inability to adjust spending to compensate for the
shortfall. Therefore, a shortfall in actual as compared to estimated revenue
would have an immediate adverse effect on the Company's business, financial
condition and operating results that could be material. 

DEPENDENCE ON CABLE AFFILIATES TO UPGRADE TO TWO-WAY CABLE INFRASTRUCTURE
NECESSARY TO SUPPORT THE @HOME SERVICE; UNCERTAIN AVAILABILITY AND TIMING OF
UPGRADES. Transmission of the @Home service over cable is dependent on the
availability of high-speed two-way HFC cable infrastructure. However, only a
small portion of existing cable plant in the United States has been upgraded to
HFC cable, and even less is capable of high-speed two-way transmission. The
Company's cable affiliates have announced and begun to implement major
infrastructure investments in order to deploy two-way HFC cable. However, cable
system operators have limited experience with these upgrades, and these
investments have placed a significant strain on the financial, managerial,
operating and other resources of the cable affiliates, most of which are already
highly leveraged, and thus have been, and the Company expects will continue to
be, subject to change, delay or cancellation. Although the Company's commercial
success depends on the successful and timely completion of these infrastructure
upgrades, the cable affiliates are under no obligation to the Company to upgrade
systems or to roll out, market or promote the Company's services. In addition,
the cable affiliates are not contractually required to achieve any specific
rollout schedule. Because of the very substantial capital cost of upgrading
cable systems for high-speed two-way data transmission, there has been
uncertainty in recent months as to the rate at which the cable affiliates
                                       14
<PAGE>
 
will upgrade their systems. The failure of the cable affiliates to complete
these upgrades in a timely and satisfactory manner, or at all, would prevent the
Company from delivering high-performance Internet access services and would have
a material adverse effect on the Company's business, operating results and
financial condition.

NO OBLIGATION OF CABLE AFFILIATES TO CARRY THE COMPANY'S SERVICES; LIMITATIONS
ON THEIR EXCLUSIVITY. Although the Company's cable affiliates are subject to
certain exclusivity obligations that prohibit them from obtaining high-speed
(greater than 128 kilobits per second ("Kbps")) residential consumer Internet
services from any source other than the Company, such cable affiliates are under
no affirmative obligation to carry any of the Company's services. Such
exclusivity obligations in favor of the Company expire on June 4, 2002, and may
be terminated sooner under certain circumstances. The exclusivity obligations
also are subject to exceptions that would permit the cable affiliates to engage
in certain activities which could compete, directly or indirectly, with the
activities of the Company.

CONTROL BY TCI. TCI controls approximately 72% of the voting power of the
Company.  Therefore, TCI has the ability to control most significant matters
requiring stockholder approval, including the election of a majority of the
Company's directors, subject to certain supermajority approval rights held by
Comcast and Cox.  In addition, the Company's Board of Directors, which is
controlled by TCI and certain of the Company's other cable affiliates, has the
power, subject to directors' fiduciary duties, to change the terms of
distribution for the Company's Internet services.

POTENTIAL DISPOSITION OF CABLE SYSTEMS BY CABLE AFFILIATES.  The Company's
agreements with its cable affiliates do not require these cable affiliates to
maintain a specified number of cable systems, subscribers or homes passed by
cable infrastructure in order to maintain their control over and equity
ownership of the Company. Therefore, these cable affiliates may dispose of a
significant amount of its cable systems without requiring that such cable
systems remain subject to any exclusivity provisions.  TCI has recently
announced the proposed sale or transfer of certain cable systems.  In addition,
TCI has announced that it is considering various plans and proposals that may
result in the disposition of other of its cable systems. To the extent that any
cable affiliate disposes of cable systems in the future without causing such
cable systems to remain subject to exclusivity provisions, the number of homes
passed that are exclusive to the Company will be decreased.  Such decreases in
the number of exclusive homes passed may have an adverse effect upon the
business, operating results and financial condition of the Company.

UNPROVEN NETWORK SCALABILITY, SPEED AND SECURITY.  Due to the limited deployment
of the Company's services, the ability of the @Network to connect and manage a
substantial number of online subscribers at high transmission speeds is as yet
unknown, and the Company faces risks related to the @Network's ability to be
scaled up to its expected subscriber levels while maintaining superior
performance. There can be no assurance that the @Network will be able to achieve
or maintain a high speed of data transmission, especially as the number of the
Company's subscribers grows, and the Company's failure to achieve or maintain
high-speed data transmission would significantly reduce consumer demand for its
services and have a material adverse effect on its business, operating results
and financial condition. In addition, the Company has recently discovered that
users may inadvertently configure their computer systems in a manner that
permits others to access a user's files without the user's knowledge.  While the
Company has addressed this configuration issue and taken steps to prevent users
from sharing files via the @Home service, there can be no assurance that public
concerns about security and privacy of the cable network will not inhibit the
acceptance of the Company's services.

MANAGEMENT OF EXPANDED OPERATIONS.  The Company may not be equipped to
successfully manage any future periods of rapid growth or expansion, which could
be expected to place a significant strain on the Company's managerial,
operating, financial and other resources.  For 

                                       15
<PAGE>
 
example, certain of the Company's cable affiliates have reported problems
with customer service, which the Company believes is related to the rapid
subscriber growth the Company has experienced. The failure of the Company or its
cable affiliates to provide adequate customer service as the Company's Internet
service offerings scale would have a material adverse affect on subscriber
retention and growth and would materially adversely affect the Company's
business, operating results and financial condition.

DEPENDENCE ON TWO-WAY CABLE MODEMS; NEW INDUSTRY STANDARD.  Each of the
Company's subscribers currently must obtain a cable modem from a cable affiliate
to access the @Home service. The North American cable industry has recently
adopted a set of interface specifications for hardware and software to support
the delivery of data services over the cable infrastructure.  The Company
believes that these specifications, together with its recently announced
development agreement with Intel Corporation relating to "plug and play" modems,
will facilitate the growth of the cable modem industry and the availability of
lower cost cable modems. However, to the extent that any of the Company's cable
affiliates choose to slow the deployment of the @Home service until the
commercial availability of cable modems that are compliant with these new
specifications, the Company's subscriber growth could be constrained and the
Company's business, operating results and financial condition will be materially
adversely affected during the period of such a delay.

COMPETITION.  The markets for consumer and business Internet services and online
content are extremely competitive, and the Company expects that competition will
intensify in the future.  The Company's most direct competitors in these markets
are Internet service providers, national long distance carriers and local
exchange carriers, wireless service providers, online service providers and
Internet content aggregators.  Many of these competitors are offering (or may
soon offer) technologies that will attempt to compete with some or all of the
Company's high-speed data service offerings. The Company also competes with
other cable-based data services that are seeking to contract with cable system
operators to bring their services into geographic areas that are not covered by
an exclusive relationship between the Company and its cable affiliates. Many of
the Company's competitors and potential competitors have substantially greater
financial, technical and marketing resources, larger subscriber bases, longer
operating histories, greater name recognition and more established relationships
with advertisers and content and application providers than 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 faced by the
Company will not materially adversely affect the Company's business, operating
results or financial condition.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS.  A key component of the
Company's strategy is expansion into international markets.  To date, the
Company has developed relationships only with United States and Canadian cable
system operators.  The Company has extremely limited experience in developing
localized versions of its products and services and in developing relationships
with international cable system operators.  There can be no assurance that the
Company will be successful in expanding its product and service offerings into
foreign markets.  Moreover, the Company expects the incremental time and
infrastructure costs related to converting international subscribers to
significantly exceed the time and costs the Company expends for capturing
domestic subscribers.

POSSIBLE VOLATILITY OF STOCK PRICE.  The stock market has from time to time
experienced significant price and volume fluctuations.  In addition, the market
price of the shares of the Company's Series A Common Stock, similar to the
market prices of other Internet companies, is likely to be highly volatile.
Factors such as fluctuations in the Company's operating results, announcements
of technological innovations or new products by the Company or its competitors,
regulatory actions, and general market conditions may have a significant effect
on the market price of the Company's Series A Common Stock.

                                       16
<PAGE>
 
DILUTION FROM CABLEVISION TRANSACTION.  As a result of a transaction effective
October 2, 1997, whereby Cablevision Systems Corporation ("Cablevision") agreed
to enter into an agreement to distribute the @Home service on substantially the
same terms and conditions as TCI, Comcast and Cox, Cablevision and its parent
corporation were granted warrants to purchase up to 10,946,936 shares of the
Company's Series A Common Stock at an exercise price of $.50 per share under
certain conditions.  To the extent that these warrants are exercised, the
Company's stockholders may experience substantial dilution. In addition, the
Company anticipates that it will record a non-cash, non-recurring charge in the
fourth quarter of 1997 based on the fair value of the Warrant. The valuation of
the Warrant has not been completed, however the Company estimates the fair value
to be approximately $200 million. Additional charges to operations will be
recorded if and when the Contingent Warrant becomes exercisable. 

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

                                       17
<PAGE>
 
PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

On July 8, 1997, PCTV, Inc. ("PCTV") filed a complaint against the Company in
the United States District Court for the District of New Hampshire asserting
rights in the @Home trademark.  In the complaint, PCTV alleges trademark
infringement and unfair competition based on the Company's use of the @Home mark
and requests damages and injunctive relief.  PCTV is a New Hampshire corporation
that produces computer-related television programs such as "Business Computing,"
"Computer Chronicles," and "@Home."  PCTV alleges that it first used the mark in
August of 1994.  The Company is currently in settlement discussions with PCTV
and is prepared to defend the suit vigorously if required.  The Company does not
expect the outcome of this matter to have a material adverse effect on the
Company's business, operating results or financial condition.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

(c)  Sales of Unregistered Securities. From July 1, 1997 to July 10, 1997,
following the exercise of options to purchase shares of Series A Common Stock
that had been granted under the Company's stock option plans by five employees,
the Company issued an aggregate of 21,500 shares of Series A Common Stock for an
aggregate purchase price of $5,375. All sales of Series A Common Stock made by
the Company pursuant to the exercise of stock options were made pursuant to the
exemption from the registration requirements of the Securities Act afforded by
Rule 701 promulgated under the Securities Act.

On July 16, 1997, the Company issued a warrant to purchase an aggregate of
100,000 shares of Series A Common Stock at an exercise price of $10.00 per share
to one public corporation in connection with a technology development agreement
entered into between the Company and this corporation.  On September 15, 1997,
the Company issued a warrant to purchase 100,000 shares of Series A Common Stock
at an exercise price of $21.00 per share to the same public corporation in
connection with a cooperation agreement entered into between the Company and
this corporation.  Each of these issuances was made in reliance on Section 4(2)
of the Securities Act and/or Regulation D promulgated under the Securities Act.
Each of these issuances was made without general solicitation or advertising.
The purchaser was a sophisticated investor with access to all relevant
information necessary to evaluate the investment who represented to the Company
that the warrants were being acquired for investment.

(d)  Use of Proceeds from Sales of Registered Securities. On July 16, 1997, the
Company completed an initial public offering of its Series A Common Stock, $0.01
par value (the "Offering"). The managing underwriters in the Offering were
Morgan Stanley Dean Witter, Merrill Lynch & Co., Alex. Brown & Sons Incorporated
and Hambrecht & Quist (the "Underwriters"). The shares of Series A Common Stock
sold in the Offering were registered under the Securities Act of 1933, as
amended, on a Registration Statement on Form S-1 (the "Registration Statement")
(Registration Number 333-27323). The Registration Statement was declared
effective by the Securities and Exchange Commission (the "SEC") on July 11,
1997.

On July 11, 1997, the Company commenced the Offering.  The Offering terminated
on July 16, 1997 after the Company had sold all of the 10,350,000 shares of
Series A Common Stock registered under the Registration Statement.  All of the
shares sold were sold by the Company (including 1,350,000 shares sold pursuant
to the exercise of the Underwriters' over-allotment option).  The assumed
offering price was $10.50 per share for an aggregate price of the offering
amount registered of $108,675,000, and the shares were sold at a price to the
public of $10.50 per share for an aggregate offering price of $108,675,000.

                                       18
<PAGE>
 
From the effective date of the Registration Statement to July 16, 1997, the
Company paid an aggregate of $7,607,250 in underwriting discounts and
commissions.  In addition, the following table sets forth an estimate of all
expenses incurred in connection with the Offering, other than underwriting
discounts and commissions.  All of the amounts shown are estimated except for
the registration fees of the SEC, the National Association of Securities
Dealers, Inc. (the "NASD") and the Nasdaq National Market.  None of the amounts
shown were paid directly or indirectly to any director, officer, general partner
of the Company or their associates, persons owning 10 percent or more of any
class of equity securities of the Company, or an affiliate of the Company.

<TABLE>
<S>                                               <C>
SEC registration fee                              $   23,176 
NASD filing fee                                   $    8,148 
Nasdaq National Market Application fee            $   50,000 
Printing                                          $  303,993 
Legal fees and expenses                           $  400,000 
Accounting fees and expenses                      $  249,946 
NASD and Blue sky fees and expenses               $   10,000 
Transfer agent and Registrar fees and expenses    $    2,500 
Miscellaneous                                     $  100,504 
Total                                             $1,148,267  
</TABLE>

After deducting the underwriting discounts and commissions and the Offering
expenses described above, net proceeds to the Company from the Offering were
approximately $99,919,483.  The entire amount has been allocated for general
corporate purposes, including working capital requirements of the Company
resulting from its growth.  None of the net proceeds of the Offering were paid
directly or indirectly to any director, officer, general partner of the Company
or their associates, persons owning 10 percent or more of any class of equity
securities of the Company, or an affiliate of the Company.

ITEM 5.   OTHER INFORMATION

On October 16, 1997, Brendan R. Clouston resigned as a Series B Common Stock
Director of the Company.  On the same date, as authorized by the Company's
Amended and Restated Certificate of Incorporation, the holders of the Company's
Series B Common Stock appointed Leo J. Hindery, Jr. to fill the vacancy created
by Mr. Clouston's resignation.  Mr. Hindery is President and Chief Operating
Officer of Tele-Communications, Inc.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits
          --------

          See attached exhibit index.
 
     (b)  Reports on Form 8-K
          -------------------

          No such reports were filed during the quarter ended September 30,
          1997.

                                       19
<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.

                              AT HOME CORPORATION
                                  (Registrant)

                             /s/ Kenneth A. Goldman

                          ___________________________
                           Senior Vice President and
                            Chief Financial Officer
                  (Principal Financial and Accounting Officer)
                           (Duly Authorized Officer)
                                November 14, 1997

                                       20
<PAGE>
 
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number                         Exhibit Title
--------------                         -------------
<S>              <C>  
10.21            Build To Suit Lease entered into by and between Martin/Campus                            
                 Associates, L.P. and At Home Corporation dated September 29,                             
                 1997 (450 Broadway, Redwood City, California).                                           
                                                                                                          
10.22            Build To Suit Lease entered into by and between Martin/Campus                            
                 Associates, L.P. and At Home Corporation dated September 29,                             
                 1997 (440 Broadway, Redwood City, California).                                      
                                                                                                          
10.23            Loan and Security Agreement entered into by and between Silicon                                         
                 Valley Bank and At Home Corporation dated September 30, 1997.                           

11.1             Computation of Pro Forma Net Loss Per Share        
                                                                    
27.1             Financial Data Schedule                             
</TABLE> 
                                                           

                                       21