UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q
[Mark One]

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

                  For the quarterly period ended March 31, 1998

                                       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 0-20329

                             EIS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                             No. 06-1017599
                (State or other jurisdiction         (I.R.S. Employer
                of incorporation)                    Identification Number)

                               555 Herndon Parkway
                                Herndon, VA 20170

                                 (703) 478-9808
              (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: Common Stock, par value $.01 per share,
         outstanding as of April 17, 1998: 11,656,677 shares.


                                      -1-

<PAGE>



                    EIS INTERNATIONAL, INC. and SUBSIDIARIES

     INDEX to Financial Statements Filed with Quarterly Report of Registrant
               on Form 10-Q for the Quarter Ended March 31, 1998
                                   (Unaudited)

<TABLE>
<CAPTION>

         PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements:                                                       Page
                                                                                              ----
        <S>                                                                                     <C>
         Unaudited Consolidated Balance Sheets as of December 31, 1997
         and March 31, 1998                                                                       3

         Unaudited Consolidated Statements of Operations
         for the three months ended March 31, 1997 and 1998                                       4

         Unaudited Consolidated Statements of Cash Flows
         for the three months ended March 31, 1997 and 1998                                       5

         Notes to Consolidated Financial Statements
         (unaudited)                                                                            6-8

         Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                                   9-13

         PART II. OTHER INFORMATION

         Item 1.  Legal Proceedings                                                              14

         Item 2.  Changes in Securities                                              Not Applicable

         Item 3.  Defaults Upon Senior Securities                                    Not Applicable

         Item 4.  Submission of Matters to a Vote of Security Holders                            15

         Item 5.  Other Information Not Applicable

         Item 6.  Exhibits and Reports on Form 8-K                                               15

         Signatures                                                                              16

</TABLE>



                                      -2-

<PAGE>


                    EIS INTERNATIONAL, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                 (Dollars in thousands, except per share amount)


<TABLE>
<CAPTION>
                                                                             December 31,   March 31,
                                                                                1997           1998
                                                                             ------------  -------------
Assets                                                                                     (Unaudited)
<S>                                                                             <C>            <C>
Current assets:
     Cash and cash equivalents                                                  $ 22,525       $ 22,315
     Short-term investments                                                        2,332             --
     Accounts receivable, trade, less allowances for doubtful accounts
       and sales returns of $4,546 in 1997 and $3,621 in 1998                     13,979         17,257
     Current portion of installment and lease receivables                          1,674          2,439
     Inventories                                                                   5,160          4,996
     Current deferred income taxes                                                 3,448          2,892
     Refundable income taxes                                                         611            601
     Prepaids and other current assets                                               857          1,037
                                                                             ------------  -------------
        Total current assets                                                      50,586         51,537

Capitalized software development costs, net                                        4,372          4,493
Property and equipment, net                                                        7,842          7,685
Installment and lease receivables, less current portion                            1,254            849
Deferred income taxes                                                              2,206          2,206
Other assets                                                                       1,532          1,318
                                                                             ------------  -------------
        Total assets                                                            $ 67,792       $ 68,088
                                                                             ============  =============

Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable and accrued liabilities                                   $ 15,508       $ 12,944
     Deferred revenue                                                              2,983          4,613
     Net liability of discontinued operations                                        598            737
                                                                             ------------  -------------
        Total current liabilities                                                 19,089         18,294

Other liabilities                                                                    253            193
                                                                             ------------  -------------
        Total liabilities                                                         19,342         18,487

Commitments and Contingencies
Stockholders' equity
     Common Stock, $.01 par value, 15,000,000
         shares authorized, issued 11,641,393 shares
         in 1997 and 11,656,677 shares in 1998                                       116            117
     Additional paid-in capital                                                   60,357         60,364
     Accumulated translation adjustments                                            (326)          (202)
     Retained deficit                                                            (10,792)        (9,773)
     Treasury stock, at cost -- 101,225 shares in 1997 and 1998                     (905)          (905)
                                                                             ------------  -------------
        Total stockholders' equity                                                48,450         49,601
                                                                             ------------  -------------
        Total liabilities and stockholders' equity                              $ 67,792       $ 68,088
                                                                             ============  =============

</TABLE>





     See accompanying notes to unaudited consolidated financial statements.





                                      -3-

<PAGE>


                    EIS INTERNATIONAL, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                    (In thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                         Three Months
                                                                        Ended March 31,
                                                                    -------------------------
                                                                       1997         1998
                                                                    -----------  ------------
<S>                                                                   <C>           <C>
Net revenues:
  Product and software                                                $ 13,913      $ 11,607
  Service and other                                                      6,309         6,495
                                                                    -----------  ------------
                                                                        20,222        18,102
                                                                    -----------  ------------
Cost of revenues:
  Cost of product and software sold                                      5,607         4,550
  Recovery of provision for contract losses                                ---          (886)
  Cost of service and other                                              4,185         3,390
                                                                    -----------  ------------
                                                                         9,792         7,054
                                                                    -----------  ------------
      Gross margin                                                      10,430        11,048
                                                                    -----------  ------------

Operating cost and expense:
  Research and development                                               3,246         2,553
  Sales, general and adminstrative                                      10,200         7,147
  Restructuring                                                          2,877           ---
                                                                    -----------  ------------
                                                                        16,323         9,700
                                                                    -----------  ------------
Operating income (loss)                                                 (5,893)        1,348
  Other income, net                                                        208           331
                                                                    -----------  ------------
Income (loss) before income tax benefit (expense)                       (5,685)        1,679
  Income tax benefit (expense)                                           2,163          (660)
                                                                    -----------  ------------
Net income (loss)                                                     $ (3,522)     $  1,019
                                                                    ===========  ============

Basic income (loss) per share:                                        $  (0.32)     $   0.09
Diluted income (loss) per share:                                         (0.32)         0.09

Weighted average common and common equivalent shares:
  Basic                                                                 11,143        11,546
  Diluted                                                               11,143        11,809



</TABLE>



     See accompanying notes to unaudited consolidated financial statements.


                                      -4-


<PAGE>


                    EIS INTERNATIONAL, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                 Three Months
                                                                                 Ended March 31,
                                                                             -----------------------
                                                                               1997         1998
                                                                             ----------  -----------
<S>                                                                           <C>           <C>
Cash flows from operating activities:
    Net income (loss) from continuing operations                              $ (3,522)     $ 1,019
    Adjustments to reconcile net income (loss) from continuing operations
    to net cash from operating activities:
        Provision for doubtful accounts and sales returns                          676          359
        Recovery of provision for contract losses                                  ---         (886)
        Depreciation and amortization                                            1,795        1,732
        Deferred income taxes                                                   (2,252)         556
Change in assets and liabilities:
        Accounts receivable, trade                                                (166)      (4,303)
        Installment and lease receivables                                          353          306
        Inventories                                                             (1,052)         164
        Refundable income taxes                                                    ---           10
        Accounts payable and accrued liabilities                                  (938)      (1,678)
        Deferred revenue                                                         2,753        1,630
        Other                                                                     (280)         (93)
                                                                             ----------  -----------
  Net cash provided by continuing operations                                    (2,633)      (1,184)
  Cash provided by (used in) discontinued operations                              (970)         139
                                                                             ----------  -----------
Net cash provided by (used in) operating activities                             (3,603)      (1,045)
                                                                             ----------  -----------
Cash flows from investing activities:
        Additions to property and equipment                                     (1,151)      (1,038)
        Sale of short-term investments                                           1,038        2,332
        Purchase of short-term investments                                      (1,004)         ---
        Increase in capitalized software costs                                    (365)        (467)
                                                                             ----------  -----------
Net cash provided by (used in) investing activities                             (1,482)         827
                                                                             ----------  -----------
Cash flows from financing activities:
        Proceeds from exercise of stock options and warrants                       383            8
                                                                             ----------  -----------
Net cash provided by financing activities                                          383            8
                                                                             ----------  -----------
Net decrease in cash and cash equivalents                                       (4,702)        (210)
Cash and cash equivalents at beginning of period                                11,099       22,525
                                                                             ----------  -----------
Cash and cash equivalents at end of period                                     $ 6,397     $ 22,315
                                                                             ==========  ===========

Supplemental disclosure of cash flow information: 
    Cash paid during the period  for:
        Interest                                                               $    15     $     48
        Income taxes                                                               ---          200
</TABLE>



     See accompanying notes to unaudited consolidated financial statements.



                                      -5-


<PAGE>


EIS International, Inc. and Subsidiaries
----------------------------------------

Notes to Consolidated Financial Statements

(1)    Basis of Presentation

The unaudited consolidated financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the information and note disclosures necessary to conform with annual
reporting requirements. The statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997. In
the opinion of management, the accompanying consolidated financial statements
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the Company's financial position and
results of operations. The results of operations for the three month period
ended March 31, 1998 may not be indicative of the results for the full year.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

(2)    Basis of Consolidation

The consolidated financial statements include the accounts of EIS International,
Inc. and its wholly-owned subsidiaries ("EIS" or the "Company"). All significant
intercompany balances and transactions have been eliminated in consolidation.

(3)    New Accounting Pronouncements

In February 1997, FASB issued SFAS No. 129, "Disclosure of Information about
Capital Structure" which is effective for the year ending December 31, 1998.
SFAS No. 129 continues the previous requirements to disclose certain information
about an entity's capital structure found in Accounting Principles Board ("APB")
Opinions No. 10, "Omnibus Opinion-1966," and No. 15, "Earnings per Share," and
FASB SFAS No. 47, "Disclosure of Long-Term Obligations." EIS has been subject to
the requirements of those standards and, as a result, the adoption of SFAS No.
129 effective January 1, 1998 did not have a material impact on the Company's
financial statements.

In June 1997, FASB issued SFAS No. 130, "Reporting Comprehensive Income" which
is effective for the year ending December 31, 1998. SFAS No. 130 establishes
standards for the reporting and display of comprehensive income and its
components in the financial statements. EIS adopted SFAS No. 130 effective
January 1, 1998.

The schedule below reflects consolidated comprehensive income (loss) for the
periods ended March 31, 1997 and 1998:


<TABLE>
<CAPTION>
                                                                   Three Months
                                                                  Ended March 31,
                                                            ----------------------------
                                                                1997           1998
                                                            -------------  -------------
<S>                                                             <C>           <C>    
Net income (loss)                                               $ (3,522)     $ 1,019
Other comprehensive income:
     Foreign currency translation adjustment                         141          124
                                                            -------------  -------------
Comprehensive income (loss)                                     $ (3,381)     $ 1,143
                                                            -------------  -------------
</TABLE>



In June 1997, FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information," which is effective for the year ending
December 31, 1998. SFAS No. 131 requires companies to present certain
information about operating segments and related information, including
geographic and major customer data, in its annual financial statements and in
condensed financial statements for interim periods. EIS does not believe that
the adoption of SFAS No. 131 will have a material impact on its financial
statements.

In October 1997, the AICPA Accounting Standards Executive Committee issued
Statement of Position 97-2, "Software Revenue Recognition" ("SOP 97-2"), which
supercedes Statement of Position 91-1 "Software Revenue Recognition". SOP 97-2
focuses on when and in what amounts revenue should be recognized for licensing,
selling, leasing, or otherwise marketing computer software, and is effective for
transactions entered into in fiscal years beginning after December 15, 1997.



                                      -6-

<PAGE>


EIS International, Inc. and Subsidiaries
----------------------------------------

As a result of the adoption of SOP 97-2 on January 1, 1998, product and software
revenue and gross margin were lower by $458,000 and $344,000, respectively, for
the quarterly period ended March 31, 1998.

(4)  Earnings (Loss) Per Share

Earnings (loss) per share is determined by dividing earnings (loss) by the
weighted average number of shares of common stock outstanding during the period.
For the three months ended March 31, 1998, the computation of diluted earnings
per share include the assumed exercise of dilutive stock options and warrants.
For the three months ended March 31, 1997, the assumed exercise of stock options
and warrants has not been included in the calculation as they would be
anti-dilutive.

(5)  Year 2000 Issues

Background. Many existing computer programs use only two digits to identify a
year in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
Year 2000. The Year 2000 issue affects nearly all companies and organizations.

Impact on EIS. All EIS products will be affected in some manner by Year 2000
issues, except for EMPSx and WMW, which are already Year 2000 compliant. EIS has
developed and is in the initial phases of the implementation of a plan ("the
Year 2000 Product Plan") that makes necessary modifications to its products. The
current estimated cost to update those products is approximately $2.0 million.
EIS expects to continue to supplement its internal resources with subcontract
labor to complete the Year 2000 Product Plan. EIS will seek to manage its
research and develop costs and Year 2000 Product Plan costs, so that EIS' total
research and development costs are not materially different from the range of
research and development costs incurred during 1996 and 1997, but there can be
no assurance it will be able to do so. In addition to incurring research and
development costs, EIS may incur additional costs in other areas of its
operation, including program management and installation services. EIS is
planning to provide updated software to customers under EIS maintenance
contracts, and to charge fees for on-site visits, when necessary, and for
certain other services to upgrade customer software. EIS products affected by
the Year 2000 issue will not be saleable during or after Year 2000, unless the
Year 2000 Product Plan is completed before that date. Failure to successfully
implement the Year 2000 Product Plan could have a material adverse impact on
EIS' operations and financial condition. EIS expects to be successful in
completing the Year 2000 Product Plan changes to all of its products; however,
upgrading all customers products that require such upgrades prior to Year 2000
cannot be assured since a substantial part of the upgrade process will be
dependent on the customer. Additionally, the estimated research and development
costs discussed above could change materially as development of the Year 2000
Product Plan proceeds. During the quarterly period ended March 31, 1998, EIS
incurred $124,000 of costs associated with its Year 2000 Product Plan. These
costs are included in research and development in the accompanying consolidated
statements of operations.

EIS is in the process of estimating the cost of updating its internal software
and hardware systems to be Year 2000 compliant. Although that process may
involve additional costs, EIS believes that those costs will not have a material
adverse affect on its operations and financial condition. If that update is not
completed in a timely manner, or if EIS' costs exceed the current estimates, the
cost of Year 2000 compliance for EIS' internal computer software and hardware
systems could have at material adverse impact on its operations and financial
condition. EIS also intends to determine the extent of any adverse impact
resulting from failures by its major vendors and distributors to be Year 2000
compliant; however, it is currently unable to estimate any such potential
adverse impact, and such adverse impact could be material. No material costs
have been incurred to date with respect to updating EIS' internal software and
hardware systems for Year 2000 compliance.





                                      -7-

<PAGE>


EIS International, Inc. and Subsidiaries
----------------------------------------

(6)   Restructuring

On March 3, 1997, EIS announced a restructuring and reorganization program (the
"Restructuring"), the purpose of which was to refocus the Company's efforts on
its core systems business and to reduce costs. In connection with the
Restructuring, EIS downsized the operations of Cybernetics Systems International
Corp. ("Cybernetics"), a wholly-owned EIS subsidiary, closed and sublet its Fort
Lauderdale, Florida facility, focusing Cybernetics' development and marketing
efforts primarily on its Workforce Manager product. In addition, EIS terminated
the separate operations of Pulse Technologies, Inc. ("Pulse"), its Chantilly,
Virginia based integration services business, by integrating the business of
Pulse into the operations of the Company's core business. Furthermore, EIS
closed its corporate headquarters in Pittsburgh, Pennsylvania and relocated the
corporate headquarters to its facility in Herndon. A total of approximately 110
employees were terminated as a result of the Restructuring. During the first
quarter of 1997, in connection with the Restructuring, EIS recorded charges of
$2.9 million, including $1.1 million of severance costs, $1.3 million of
facilities leases and fixed asset disposal costs, and $0.5 million of other
costs.






                                      -8-

<PAGE>


EIS International, Inc. and Subsidiaries
----------------------------------------

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

Cautionary Statement
--------------------

In addition to historical information contained herein, this document contains
certain "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, and are subject to the safe harbors created thereby.
All statements included in this document regarding the Company's financial
position, business strategy and plans, objectives for future operations,
technical developments, Year 2000 compliance, industry conditions -- other than
statements of historical facts -- are forward-looking statements. While these
statements reflect the Company's reasonable assumptions, based upon management's
beliefs and information currently available to it, EIS can give no assurance
that such expectations will prove to be correct.

These forward-looking statements are subject to certain risks, uncertainties,
and assumptions related to certain factors including, without limitations,
competitive factors, general economic conditions, customer relations,
technological change, product development, product introductions and acceptance,
distribution networks, changes in industry practices, one-time events and other
factors described herein and under the heading "Factors Affecting Future
Results" in the Company's Annual Report on Form 10-K for the year ending
December 31, 1997. Based upon changing conditions, should any one or more of
these risks or uncertainties materialize, or should any underlying assumptions
prove incorrect, EIS may experience material fluctuations in its future
quarterly and annual operating results that may vary materially from those
described herein and that could materially and adversely affect its business,
financial condition, operating results and stock price. EIS does not intend to
update these forward-looking statements.

Results of Operations

The following table sets forth, for the periods indicated, certain financial
data as reflected in the Consolidated Statements of Operations included herein.
The percentages shown are calculated based upon of net revenues, except that
cost of product and software sold and cost of services and other are presented
as a percentage of product and software sales and service and other revenues,
respectively.


<TABLE>
<CAPTION>

                                                               Three Months Ended March 31,
                                                       ------------------------------------------
                                                                1997                 1998
                                                       ---------------------  --------------------
                                                            $           %         $          %
                                                       ----------   --------  ---------- ---------
<S>                                                       <C>           <C>     <C>           <C> 
Product and software sales                                13,913        68.8    11,607        64.1
Service and other                                          6,309        31.2     6,495        35.9
                                                       ----------   --------  ---------- ---------
  Net revenues                                            20,222       100.0    18,102       100.0
                                                       ----------   --------  ---------- ---------
Cost of product and software sold                          5,607        40.3     4,550        39.2
Recovery of provision for contract losses                    ---         ---      (886)        ---
Cost of service and other                                  4,185        66.3     3,390        52.2
                                                       ----------   --------  ---------- ---------
  Gross margin                                            10,430        51.6    11,048        61.0
                                                       ----------   --------  ---------- ---------
Research and development cost                              3,246        16.1     2,553        14.1
Sales, general and administrative                         10,200        50.4     7,147        39.5
Restructuring costs                                        2,877        14.2       ---         ---
                                                       ----------   --------  ---------- ---------
  Operating income (loss)                                 (5,893)      (29.1)    1,348         7.4
Other income, net                                            208         1.0       331         1.8
                                                       ----------   --------  ---------- ---------
  Income (loss) before income tax benefit (expense)       (5,685)      (28.1)    1,679         9.3
Income tax benefit (expense)                               2,163        10.7      (660)       (3.6)
                                                       ----------   --------  ---------- ---------
Net income (loss)                                         (3,522)      (17.4)    1,019         5.6
                                                       ==========   ========  ========== =========

</TABLE>



                                      -9-


<PAGE>



EIS International, Inc. and Subsidiaries
----------------------------------------

Net Revenues

Net revenues of $18.1 million in the first quarter ended March 31, 1998
decreased $2.1 million (10%) from $20.2 million of such revenue in the first
quarter ended March 31, 1997. Product and software sales revenue of $11.6
million in the first quarter ended March 31, 1998 decreased $2.3 million (17%)
from $13.9 million of such revenue in the same 1997 period. The decrease in
product and software sales revenue is primarily a result of two items. First,
EIS experienced a decrease in sales to certain of its major telemarketing
service bureau customers which were not offset by sales to new and other
existing customers. Second, as discussed in note 3 to the accompanying financial
statements, in October 1997, the AICPA Accounting Standards Executive Committee
issued Statement of Position 97-2, "Software Revenue Recognition" ("SOP 97-2").
As a result of the adoption of SOP 97-2, on January 1, 1998, product and
software revenue was lower by $458,000 for the quarter ended March 31, 1998.

Towards the end of 1997 and continuing into 1998, EIS has taken and is
continuing to take actions with respect to its domestic and international sales
personnel, marketing activities, and its strategic alliance relationships, to
address the decline in product and software revenue. However, no assurance can
be given that these actions will result in the stabilization or increase of
product revenue.

Service and other revenue of $6.5 million in the first quarter ended March 31,
1998 increased $186,000 (3%) from $6.3 million of such revenues in the same
period in 1997. The increase in service and other revenues in the first quarter
of 1998 as compared to the first quarter of 1997, was primarily due to expansion
of the Company's customer base covered by service contracts, offset by a decline
in its professional services business.

Cost of Revenues and Gross Margins

Total gross margin was $11.0 million (61.0%) in the first quarter of 1998,
compared to $10.4 million (51.6%) in the first quarter of 1997. The primary
reason for the improvement in gross margin as a percentage of revenue was the
result of the recovery of provision for contract losses of $886,000 recorded in
the first quarter of 1998. This recovery represents an excess amount remaining
from a $5.0 million provision, recorded in the fourth quarter of 1996. This
provision was recorded by Cybernetics for costs associated with the completion
and installation of products and resolution of certain Cybernetics contractual
obligations. During the first quarter of 1998, Cybernetics completed work on
certain contracts and made significant progress towards the resolution of
certain other obligations which resulted in the recovery of the provision for
contract losses recorded in the first quarter of 1998.

Gross margin on product and software sales was $7.1 million (60.8%) in the first
quarter of 1998, compared to $8.3 million (59.7%) in the first quarter of 1997.
The decline in product and software gross margin dollars was directly
attributable to the decline in product and software sales, although the product
and software gross margin percentage did not materially change. As a result of
the adoption of SOP 97-2 as discussed above, the gross margin on product and
software revenue was lower by $344,000 for the quarterly period ended March 31,
1998.

Gross margin on service and other revenue was $3.1 million (47.8%) in the first
quarter of 1998, compared to $2.1 million (33.7%) in the first quarter of 1997.
The improvement in gross margin on service and other revenue was primarily due
to expense control measures implemented during the latter part of the first
quarter of 1997 as a result of the Restructuring discussed below. In addition,
the cost of supplying parts under EIS customer maintenance agreements decreased
as a result of management's efforts to improve this operation.

EIS' gross margin can be affected by a number of factors, including changes in
sales volume, product mix, hardware requirements of each sale, costs of product
support, and competitive pressures on pricing. Consequently, there can be no
assurance that EIS will continue to sustain gross margins at previous levels.

Research and Development Costs

Research and development costs as a percentage of total revenues were 14.1% in
the first quarter of 1998 as compared to 16.1% of total revenues in the first
quarter of 1997. Research and development costs decreased $693,000 to $2.6
million in the first quarter of 1998 from $3.2 million of such costs in the same
period in 1997. This decrease was primarily due to a decline of approximately
$376,000 in salaries and subcontract labor costs (see "Year 2000 Issues" for
additional information regarding the use of subcontract resources), an increase




                                      -10-

<PAGE>



EIS International, Inc. and Subsidiaries
----------------------------------------


of $102,000 in capitalized software development costs, as well as reduced
research and development costs incurred by Cybernetics. The decrease in salaries
and subcontract labor, as well as the increase in capitalized software
development costs, was attributable to a decline in resources required for
updates to generally available software and increased focus on software under
development for release later this year and in early 1999.

EIS capitalizes certain software development costs relating to the enhancement
of existing products and to the development of new products in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86 "Accounting for the
Costs of Computer Software to be Sold, Leased, or Otherwise Marketed."
Approximately $467,000 and $365,000 were capitalized in the first quarters of
1998 and 1997, respectively. Amortization of capitalized software development
costs of $346,000 is included in cost of products sold in the first quarters of
1998 and 1997.

EIS is committed to technological innovation. It believes that additional
research and development costs will be required to maintain its market position
and that these costs may increase in absolute amounts during the remainder of
1998 and thereafter.

Sales, General and Administrative Expense

Sales, general and administrative expense decreased $3.1 million to $7.1 million
in the first quarter of 1998 from $10.2 million of such expenses in the same
1997 period. This decrease was primarily due to decreases in Cybernetics sales
expenses and EIS administrative expenses as a result of the Restructuring
discussed below.

Restructuring Costs

On March 3, 1997, EIS announced a restructuring and reorganization program (the
"Restructuring"), the purpose of which was to refocus the Company's efforts on
its core systems business and to reduce costs. In connection with the
Restructuring, EIS downsized the operations of Cybernetics, closed and sublet
its Fort Lauderdale, Florida facility, focusing Cybernetics' development and
marketing efforts primarily on its Workforce Manager product. In addition, EIS
terminated the separate operations of Pulse, its Chantilly, Virginia based
integration services business, by integrating the business of Pulse into the
operations of the Company's core business. Furthermore, EIS closed its corporate
headquarters in Pittsburgh, Pennsylvania and relocated the corporate
headquarters to its facility in Herndon. A total of approximately 110 employees
were terminated as a result of the Restructuring. During the first quarter of
1997, in connection with the Restructuring, EIS recorded charges of $2.9
million, including $1.1 million of severance costs, $1.3 million of facilities
leases and fixed asset disposal costs, and $0.5 million of other costs.

Other Income, Net

Other income, net is comprised primarily of interest income resulting from the
investment of excess cash and cash equivalents, along with interest generated
from EIS' portfolio of leases. Other income, net was $331,000 in the first
quarter of 1998, compared to $208,000 of such other income in the same 1997
period. This increase was attributable to an increase in interest income
resulting from higher cash and cash equivalent balances in the first quarter of
1998.

Income Taxes

The Company's effective income tax expense (benefit) rate was 39.3% in the first
quarter of 1998 compared to 38% in the same 1997 period. The increase in the
effective tax rate from 1997 to 1998 is attributable to several items which
impact the overall effective tax rate, including levels of income and loss and
the related statutory tax rates domestically and internationally, in addition to
the extent of permanent differences, such as a 50% disallowance of certain meals
and entertainment expenses.






                                      -11-
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EIS International, Inc. and Subsidiaries
----------------------------------------

Year 2000 Issues

Background. Many existing computer programs use only two digits to identify a
year in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
Year 2000. The Year 2000 issue affects nearly all companies and organizations.

Impact on EIS. All EIS products will be affected in some manner by Year 2000
issues, except for EMPSx and WMW, which are already Year 2000 compliant. EIS has
developed and is in the initial phases of the implementation of a plan ("the
Year 2000 Product Plan") that makes necessary modifications to its products. The
current estimated cost to update those products is approximately $2.0 million.
EIS expects to continue to supplement its internal resources with subcontract
labor to complete the Year 2000 Product Plan. EIS will seek to manage its
research and develop costs and Year 2000 Product Plan costs, so that EIS' total
research and development costs are not materially different from the range of
research and development costs incurred during 1996 and 1997, but there can be
no assurance it will be able to do so. In addition to incurring research and
development costs, EIS may incur additional costs in other areas of its
operation, including program management and installation services. EIS is
planning to provide updated software to customers under EIS maintenance
contracts, and to charge fees for on-site visits, when necessary, and for
certain other services to upgrade customer software. EIS products affected by
the Year 2000 issue will not be saleable during or after Year 2000, unless the
Year 2000 Product Plan is completed before that date. Failure to successfully
implement the Year 2000 Product Plan could have a material adverse impact on
EIS' operations and financial condition. EIS expects to be successful in
completing the Year 2000 Product Plan changes to all of its products; however,
upgrading all customers products that require such upgrades prior to Year 2000
cannot be assured since a substantial part of the upgrade process will be
dependent on the customer. Additionally, the estimated research and development
costs discussed above could change materially as development of the Year 2000
Product Plan proceeds. During the quarterly period ended March 31, 1998, EIS
incurred $124,000 of costs associated with its Year 2000 Product Plan. These
costs are included in research and development in the accompanying consolidated
statements of operations.

EIS is in the process of estimating the cost of updating its internal software
and hardware systems to be Year 2000 compliant. Although that process may
involve additional costs, EIS believes that those costs will not have a material
adverse affect on its operations and financial condition. If that update is not
completed in a timely manner, or if EIS' costs exceed the current estimates, the
cost of Year 2000 compliance for EIS' internal computer software and hardware
systems could have at material adverse impact on its operations and financial
condition. EIS also intends to determine the extent of any adverse impact
resulting from failures by its major vendors and distributors to be Year 2000
compliant; however, it is currently unable to estimate any such potential
adverse impact, and such adverse impact could be material. No material costs
have been incurred to date with respect to updating EIS' internal software and
hardware systems for Year 2000 compliance.

Liquidity and Capital Resources

EIS' working capital increased to $33.2 million at March 31, 1998 from $31.5
million at December 31, 1997. Cash, cash equivalents, and short-term investment
balances decreased $2.5 million to $22.3 million at March 31, 1998 from $24.9
million at December 31, 1997. The decrease in cash, cash equivalents, and
short-term investments primarily resulted from the $4.3 million increase in
accounts receivable as reflected in the accompanying consolidated statements of
cash flows. The increase in accounts receivable was primarily attributable to
billings for annual maintenance contracts during the first quarter of 1998 which
tend to have a longer collection cycle, in addition to the timing of payments by
certain other customers. Net cash of $827,000 provided by investing activities
in 1998 was primarily the result of sales of short-term investments of $2.3
million offset by additions to property and equipment of $1.0 million, primarily
relating to the upgrade of EIS' customer support operations software and other
purchases of computer hardware and software for internal use.

On September 3, 1997, EIS entered into a Loan Document Modification Agreement
(the "Modified Loan Agreement") which amended the terms and conditions under the
previous line of credit. Under the Modified Loan Agreement, EIS may borrow up to
$7 million, subject to certain borrowing base limitations, and amounts
outstanding accrue interest at the bank's prime rate plus .75%. The Modified
Loan Agreement is secured by substantially all assets of EIS and expires on
September 2, 1998. There were no amounts outstanding under the Modified Loan
Agreement as of March 31, 1998. Prior to the Modified Loan Agreement, EIS had an
unsecured line of credit of $12.5 million with the same commercial bank under a
commitment that expired in January 1997.



                                      -12-

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EIS International, Inc. and Subsidiaries
----------------------------------------

EIS expects that its current cash balances and short-term investments, together
with cash anticipated to be provided by operating activities, and amounts
available under the Modified Loan Agreement, will be sufficient to fund its
working capital requirements (including research and development and Year 2000
compliance costs) for the foreseeable future. However, EIS' ability to achieve
that result will be affected by the amount of cash generated from operations and
the pace that its available resources are utilized. Accordingly, EIS may in the
future be required to seek additional sources of financing, including borrowing
and/or the sale of equity. If additional funds are raised by issuing equity,
further dilution to shareholders may result. No assurance can be given that any
such additional sources of financing will be available on acceptable terms, or
at all.

EIS is party to various legal actions and claims arising in the ordinary course
of its business. At this time, in the opinion of management, there are no
pending claims, the outcome of which are expected to result in a material
adverse effect on the consolidated financial position or results of operations
of EIS, except for the shareholder lawsuit discussed below under Part II Item 1
- "Legal Proceedings". EIS is currently not able to estimate the costs or a
range of costs which may arise out of such shareholder lawsuit.







                                      -13-

<PAGE>


EIS International, Inc. and Subsidiaries
----------------------------------------


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

The Company and certain individuals indicated below were named as defendants in
the following lawsuits, each of which were filed on the date indicated in the
United States District Court for the District of Connecticut, allegedly on
behalf of certain of the Company's shareholders. Each of these claims allege
securities fraud based upon certain alleged misleading representations regarding
the Company's acquisition of Surefind and Cybernetics and their operations, each
of which seek damages in an unspecified amount.

1.   Warburgh v. EIS International, Inc., Joseph J. Porfeli, 
     Edward J. Sarkisian and Kent M. Klineman,  filed April 25, 1997.

2.   Wallace v. EIS International, Inc., Joseph J. Porfeli, Edward J. Sarkisian,
     Harry Peisach, and Kent M. Klineman, filed May 21, 1997.

3.   Augenbaum v. EIS International, Inc., Joseph Porfeli, Edward J. Sarkisian,
     Kent M. Klineman, Robert Jesurum and Herbert Balzuweit, filed May 23, 1997.

4.   Romano, et. Al, v. EIS International, Inc., Joseph J. Porfeli, Edward J.
     Sarkisian, and Kent M. Klineman, filed June 4, 1997.

5.   Dechter v. EIS International, Inc., Joseph J. Porfeli, Edward J. Sarkisian,
     Kent M. Klineman and Harry Peisach, filed June 4, 1997.

These lawsuits have been consolidated into a single case and a consolidated and
amended complaint was filed on April 29, 1998. The Company and various other
defendants have retained counsel, the claims are being reviewed, and the lawsuit
will be vigorously defended. The Company is currently not able to estimate the
costs or a range of costs which may arise out of this case.

EIS is also party to various other legal actions and claims arising in the
ordinary course of its business. The Company believes it has adequate legal
defenses for each of the actions and claims and believes that their ultimate
disposition will not have a material adverse effect on the Company's
consolidated financial position or results of operations.

Item 2.  Changes in Securities.

         None.

Item 3.  Defaults Upon Senior Securities.

         None.





                                      -14-
<PAGE>



EIS International, Inc. and Subsidiaries
----------------------------------------


Item 4.   Submission of Matters to a Vote of Security Holders.

The Company's Annual Meeting of Stockholders was held on April 28, 1998. The
results of voting at this meeting are provided below:

<TABLE>
<CAPTION>
                                                                                                         Broker
Election of Directors                                              For               Withheld           Non-Votes
--------------------------------------------------            ----------------   ----------------      --------------
<S>                                                              <C>                  <C>                     <C>
Robert J. Cresci                                                 7,479,967            145,207                 ---

Item                                                               For               Against              Abstain         Non-Votes
--------------------------------------------------            ----------------    ----------------     --------------    -----------
Approval of EIS 1998 Stock Incentive Plan                        7,158,848            459,146              7,180                ---
Approval of Amendments to the EIS 1993 Stock
    Option Plan for Non-Employee Directors                       7,254,943            364,789              5,442                ---
Ratification of Independent Accountants                          7,564,742             55,458              4,974                ---
</TABLE>


The following  directors continue to serve their respective terms:
Robert M. Jesurum, Charles W. McCall, Kent M. Klineman, and James E. McGowan.

Item 5.      Other Information.

             None.

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

       (a)   Exhibits

             Exhibit 11 - Statement Re Computation of Earnings Per Share

             Exhibit 27 - Financial Data Schedule

       (b)   Reports on Form 8-K

             None.







                                      -15-


<PAGE>



EIS International, Inc. and Subsidiaries
----------------------------------------


                                   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.

                                            EIS INTERNATIONAL, INC.





Date: May 11, 1998                       By:  /s/ James E. McGowan
      ----------------------                  --------------------------------
                                         James E. McGowan
                                         President and Chief Executive Officer


Date: May 11, 1998                       By:  /s/ Frederick C. Foley
      ----------------------                  --------------------------------
                                         Frederick C. Foley
                                         Senior Vice President, Finance,
                                         Chief  Financial Officer and Treasurer





                                      -16-