<PAGE>   1
                    U.S. 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 September 30, 1999

      [ ]           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 0-25215


                              WEBTRENDS CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
            OREGON                                      93-1123283
<S>                                          <C>
   (State or other jurisdiction of           (IRS Employer Identification No.)
   incorporation or organization)
</TABLE>

                         851 SW SIXTH AVENUE, SUITE 1200
                             PORTLAND, OREGON 97204
                    (Address of principal executive offices)

                                 (503) 294-7025
                         (Registrant's telephone number)

     Check whether the registrant (1) 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 common stock, no par value, outstanding on
September 30, 1999 was 12,747,310.

<PAGE>   2

                              WEBTRENDS CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
PART I.   FINANCIAL INFORMATION                                               PAGE NO.
--------------------------------------------------------------------------------------
<S>       <C>                                                                 <C>
Item 1.   Condensed Financial Statements

          Balance Sheets at September 30, 1999 and December 31, 1998...........  3

          Statements of Operations for the three and nine months
               ended September 30, 1999 and 1998...............................  4

          Statements of Cash Flows for the nine months
               ended September 30, 1999 and 1998...............................  5

          Notes to condensed financial statements..............................  6

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations..................................  7

PART II.  OTHER INFORMATION
----------------------------------------------------------------------------------
Item 1.   Legal Proceedings.................................................... 12

Item 2.   Changes in Securities and Use of Proceeds............................ 12

Item 6.   Exhibits and Reports on Form 8-K..................................... 12

Signatures..................................................................... 13
</TABLE>

<PAGE>   3

                         PART I -- FINANCIAL INFORMATION
                     ITEM 1. CONDENSED FINANCIAL STATEMENTS



                                       2
<PAGE>   4

                              WEBTRENDS CORPORATION
                                 BALANCE SHEETS
                    SEPTEMBER 30, 1999 AND DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                                             SEPTEMBER 30, 1999    DECEMBER 31, 1998
                                                                             -------------------   -----------------
                                                                                    (UNAUDITED)        (AUDITED)
<S>                                                                          <C>                   <C>
ASSETS
     CURRENT ASSETS:
     Cash and cash equivalents                                                      $ 32,065,062         $ 1,098,847
     Short-term investments                                                           45,429,784                  --
     Accounts receivable, net                                                          3,303,564             977,577
     Inventories                                                                          64,642              62,115
     Prepaid expenses                                                                  1,132,431             190,530
     Deferred offering costs                                                                  --             255,394
     Deferred taxes                                                                      157,500             157,500
                                                                                    ------------         -----------
        TOTAL CURRENT ASSETS                                                          82,152,983           2,741,963

     Property and equipment, net                                                       1,721,584             598,407
     Other assets                                                                         17,535              22,016
                                                                                    ------------         -----------
        TOTAL ASSETS                                                                $ 83,892,102         $ 3,362,386
                                                                                    ============          ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

     CURRENT LIABILITIES:
     Accounts payable                                                               $    387,375         $   383,187
     Accrued liabilities                                                                 986,557             385,233
     Accrued compensation and employment taxes                                         1,623,490             508,422
     Accrued sales tax                                                                   252,866             268,533
     Accrued income taxes                                                                876,280                  --
     Deferred revenues                                                                 2,859,978             824,013
     Notes and interest payable to shareholders                                               --             151,103
                                                                                    ------------         -----------
        TOTAL CURRENT LIABILITIES                                                      6,986,546           2,520,491
                                                                                    ------------         -----------

COMMITMENTS AND CONTINGENCIES                                                                 --                  --

STOCKHOLDERS' EQUITY

     Preferred stock, no par value. Authorized, 15,000,000 shares;
        no shares outstanding                                                                 --                  --
     Common stock, Class A Voting, no par value. Authorized
        60,000,000 shares at September 30, 1999 and 30,000,000
       at December 31, 1998; issued and outstanding, 12,747,310
       shares at September 30, 1999 and 8,210,527
       at December 31, 1998                                                           75,222,082             260,000
     Common stock, Class B Non-Voting,  no par value. Authorized -0- shares
       at September 30, 1999 and 30,000,000 at December 31, 1998; issued and
       outstanding -0- shares at
       September 30, 1999 and 8,437 at December 31, 1998                                      --             589,694
     Deferred compensation                                                              (441,926)           (551,534)
     Retained earnings                                                                 2,125,400             543,735
                                                                                    ------------         -----------
        TOTAL STOCKHOLDERS' EQUITY                                                    76,905,556             841,895
                                                                                    ------------         -----------
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $ 83,892,102         $ 3,362,386
                                                                                    ============         ===========
</TABLE>

            See accompanying notes to condensed financial statements.

                                       3
<PAGE>   5

                              WEBTRENDS CORPORATION
                            STATEMENTS OF OPERATIONS
             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
                                          THREE MONTHS ENDED SEPTEMBER 30,     NINE MONTHS ENDED SEPTEMBER 30,
                                          -------------------------------      ------------------------------
                                              1999               1998              1999               1998
                                          ------------        -----------      ------------        ----------
                                                    (UNAUDITED)                          (UNAUDITED)
<S>                                       <C>                 <C>              <C>                 <C>
Revenue:
      Software                             $ 4,401,974        $1,867,754        $10,370,935        $5,025,208
      Support and services                     906,460           220,842          1,950,406           513,637
                                           -----------        ----------        -----------        ----------
         Total revenue                       5,308,434         2,088,596         12,321,341         5,538,845

Cost of revenue                                406,843           167,117          1,040,293           445,236
                                           -----------        ----------        -----------        ----------

Gross margin                                 4,901,591         1,921,479         11,281,048         5,093,609

      Research and development               1,137,288           638,553          2,640,643         1,606,776
      Sales and marketing                    2,549,518           877,324          6,107,360         2,396,506
      General and administrative               828,368           355,642          1,845,508           977,023
                                           -----------        ----------        -----------        ----------

         Total operating expenses            4,515,174         1,871,519         10,593,511         4,980,305
                                           -----------        ----------        -----------        ----------

Income from operations                         386,417            49,960            687,537           113,304

Other income and expense, net                1,018,254             8,873          1,843,415            21,457
                                           -----------        ----------        -----------        ----------

         Income before income taxes          1,404,671            58,833          2,530,952           134,761

Income tax provision                           526,659             7,065            949,287            16,175
                                           -----------        ----------        -----------        ----------

Net income                                 $   878,012        $   51,768        $ 1,581,665        $  118,586
                                           ===========        ==========        ===========        ==========

Basic net income per share                 $      0.07        $     0.01        $      0.14        $     0.01
                                           ===========        ==========        ===========        ==========

Diluted net income per share               $      0.06        $     0.01        $      0.13        $     0.01
                                           ===========        ==========        ===========        ==========

Shares used in basic net income
  per share calculation                     12,704,935         8,210,527         11,479,547         8,210,527
                                           ===========        ==========        ===========        ==========

Shares used in diluted net income
  per share calculation                     13,803,768         8,459,286         12,603,738         8,334,906
                                           ===========        ==========        ===========        ==========
</TABLE>

            See accompanying notes to condensed financial statements.

                                       4
<PAGE>   6

                              WEBTRENDS CORPORATION
                            STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                NINE MONTHS ENDED SEPTEMBER 30,
                                                               ---------------------------------
                                                                   1999                1998
                                                               ------------         -----------
                                                                          (UNAUDITED)
<S>                                                            <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                               $  1,581,665         $   118,586
      Adjustment to reconcile net income to net cash
        provided by operating activities:
          Depreciation and amortization                             142,126             137,324
          Provision for doubtful accounts                           110,000              17,000
          Amortization of deferred stock compensation               109,608              12,110
          Disposal of asset                                          30,738                  --
          Loss on marketable securities                                  --                 (63)
          Changes in assets and liabilities:
              Accounts receivable                                (2,431,528)           (262,119)
              Inventories                                            (2,528)             37,167
              Prepaid expenses                                     (690,966)           (154,839)
              Other assets                                            4,481                  --
              Accounts payable                                        4,187             172,149
              Accrued liabilities                                   601,327             283,218
              Accrued compensation and employment taxes           1,115,067             329,834
              Accrued sales tax                                     (15,667)                 --
              Accrued income taxes                                  876,280             (24,548)
              Accrued interest                                       (1,103)             (8,641)
              Deferred revenues                                   2,035,965             210,678
                                                               ------------         -----------
          Net cash provided by operating activities               3,469,652             867,856
                                                               ------------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of equipment                                     (1,296,041)           (401,207)
      Purchase of short term investments                        (45,429,784)                 --
                                                               ------------         -----------
                  Net cash used by investing activities         (46,725,825)           (401,207)
                                                               ------------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Sale of common stock                                       74,135,623                  --
      Exercise of stock options                                     236,765                  --
      Principal payments to shareholders                           (150,000)            (50,000)
                                                               ------------         -----------
          Net cash provided by financing activities              74,222,388             (50,000)
                                                               ------------         -----------
INCREASE IN CASH AND CASH EQUIVALENTS                            30,966,215             416,649

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                    1,098,847             806,916
                                                               ------------         -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                       $ 32,065,062         $ 1,223,565
                                                               ============         ===========
SUPPLEMENTAL  DISCLOSURE OF CASH FLOW  INFORMATION:
      Cash paid during the period for:
          Interest                                             $     25,310         $    18,478
          Income taxes                                         $     73,200         $   147,000
</TABLE>

            See accompanying notes to condensed financial statements.

                                       5
<PAGE>   7

                              WEBTRENDS CORPORATION
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Basis of Presentation

     The accompanying financial statements have been prepared in conformity with
     generally accepted accounting principles. However, certain information or
     footnote disclosures normally included in financial statements prepared in
     accordance with generally accepted accounting principles have been
     condensed, or omitted, pursuant to the rules and regulations of the
     Securities and Exchange Commission. In the opinion of management, the
     statements include all adjustments necessary (which are of a normal and
     recurring nature) for the fair presentation of the results of the interim
     periods presented. These financial statements should be read in conjunction
     with the audited financial statements for the year ended December 31, 1998.

2.   Stockholders' Equity

     On February 19, 1999, WebTrends completed an initial public offering of
     3,500,000 shares including 3,000,000 newly issued shares sold by WebTrends
     and 500,000 outstanding shares sold by existing shareholders. Subsequently,
     the selling shareholders sold an additional 525,000 shares pursuant to the
     underwriters' exercise of their overallotment option. WebTrends did not
     receive any of the proceeds from the sale of stock by the selling
     shareholders. The offered shares generated net proceeds to WebTrends of
     approximately $35.2 million. On May 13, 1999, WebTrends completed a
     follow-on offering of 2,500,000 shares, including 1,250,000 shares sold by
     WebTrends, and 1,250,000 shares sold by existing shareholders. WebTrends
     did not receive any of the proceeds from the sale of stock by the selling
     shareholders. The follow-on offering generated net proceeds to WebTrends of
     approximately $38.4 million after expenses.

3.   Net Income Per Common and Common Equivalent Share

     Basic and diluted net income per share were computed using the weighted
     average number of common shares outstanding during the period, with diluted
     net income per share including the effect of potentially dilutive common
     stock equivalents. Dilutive common equivalent shares consist of stock
     options. Basic and diluted net income per share have been calculated using
     the treasury stock method in accordance with SEC Staff Accounting Bulletin
     No. 98.

4.   Research and Development Costs

     Software development costs have been accounted for in accordance with
     Statement of Financial Accounting Standards No. 86, Accounting for the
     Costs of Computer Software to be Sold, Leased or Otherwise Marketed. Under
     the standard, capitalization of software development costs begins upon the
     establishment of technological feasibility, subject to net realizable value
     considerations. To date, the period between achieving technological
     feasibility and the general availability of such software has been short;
     therefore, software development costs qualifying for capitalization have
     been immaterial. Accordingly, WebTrends has not capitalized any software
     development costs and has charged all such costs to research and
     development expense as incurred.

                                       6
<PAGE>   8

5.   Cash, Cash Equivalents, and Short-Term Investments

     The Company classifies highly liquid investments purchased with an original
     maturity of three months or less as cash equivalents. Short-term
     investments consist of certificates of deposit, commercial paper and other
     highly liquid investments with original maturities in excess of three
     months, and primarily less than one year. Short-term investments are
     classified as available for sale and are recorded at amortized cost, which
     approximates market value.

                                       7
<PAGE>   9

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

FORWARD-LOOKING INFORMATION

     Certain statements in this Form 10-Q contain "forward-looking" information
     (as defined in Section 27A of the Securities Act of 1933, as amended) that
     involve risks and uncertainties which may cause actual results to differ
     materially from those predicted in the forward-looking statements. In
     particular, there are forward-looking statements concerning the Company's
     expectations for expense levels in both absolute and relative dollars
     during future periods. Forward-looking statements can be identified by
     their use of such verbs as expects, anticipates, believes or similar verbs
     or conjugations of such verbs. If any of the Company's assumptions on which
     the statements are based prove incorrect or should unanticipated
     circumstances arise, the Company's actual results could materially differ
     from those anticipated by such forward-looking statements. The differences
     could be caused by a number of factors or combination of factors including
     but not limited to, the risks detailed in the Company's Securities and
     Exchange Commission filings, including the Company's Form S-1 filed April
     27, 1999.


OVERVIEW

WebTrends Corporation provides comprehensive, integrated, scaleable, modular,
and easy-to-use solutions that enable organizations to cost-effectively manage
and report on their Internet and intranet systems. The Company was incorporated
on August 31, 1993 and reorganized effective January 1, 1997. Prior to 1997,
WebTrends was not taxable as an entity because the shareholders had elected to
be taxed individually based on their percentage ownership of the outstanding
common stock.

Since the year ended December 31, 1996, WebTrends has generated most of its
revenue from licensing its eBusiness products: eBusiness Intelligence Solutions,
products which help management understand and analyze the activity on their
Internet and intranet systems thus maximizing the effectiveness of their
eBusiness systems; eBusiness System Management Solutions, products which help
internet professionals ensure the integrity, quality and around the clock
availability of their eBusiness systems; and eBusiness Security Solutions,
products which help companies stay current on a rapidly changing set of security
issues with an open architecture and automatic updates via WebTrends
SecureTrends web site, and related support and services. Prior to 1996,
substantially all of WebTrends' revenue was generated from the license of its
AuditTrack product and related products developed as solutions for managing
Novell networks.

Software license revenue consists of fees for licenses of WebTrends' software
products. Revenue allocated to software licenses is recognized upon delivery of
software, assuming no significant obligations or customer acceptance rights
exist. WebTrends generally provides a thirty-day right of return for each
product sold. Estimated sales returns and allowances are recorded upon shipment
of the product.

WebTrends sells a portion of its products domestically and internationally
through resellers. Sales to domestic resellers are managed directly by
WebTrends, and revenue is recognized primarily at the time of shipment, net of
estimated returns and allowances. WebTrends also has entered into agreements
with a limited number of large domestic distributors. These agreements offer
expanded rights of return and price protection beyond the Company's normal
reseller agreements. For these distributors, WebTrends is recognizing revenue
upon sale from the distributor to a third party or end user until a returns
history can be established. Sales to international resellers are managed by a
third-party export management company and revenue is recognized upon sale from
the reseller to a third party or end user.

                                       8
<PAGE>   10

Support and services revenue consists of annual subscriptions for upgrades,
post-sale customer support services, and professional services. Revenue
allocated to subscriptions, which give the subscriber the right to obtain
upgrades, when and if available, is paid in advance and is recognized ratably
over the term of the subscription. Revenue from professional services is
recognized as the services are performed.


RESULTS OF OPERATIONS

REVENUE

Total revenue increased 152.4% to $5.3 million for the third quarter of 1999
from $2.1 million for the third quarter of 1998, and 123.6% to $12.3 million for
the nine months ended September 30, 1999 from $5.5 million for the nine months
ended September 30, 1998. Primary contributing factors for these changes are
discussed below.

Software Licenses

<TABLE>
<CAPTION>
                                 Three Months Ended September               Nine Months Ended
                                        September 30,                         September 30,
                                -----------------------------        ------------------------------
                                 1999      Change      1998            1999      Change      1998
                                -------    ------     -------        --------    ------     -------
<S>                             <C>        <C>        <C>            <C>         <C>        <C>
      Software Licenses         $ 4,402    135.7%     $ 1,868        $ 10,371    106.4%     $ 5,025
      Percent of Revenues          82.9%                 89.4%           84.2%                 90.7%

                                                    Dollar amounts in thousands
</TABLE>


The increase in software license revenue resulted from continued strong growth
across each of the eBusiness Intelligence Solutions, eBusiness System Management
Solutions product lines, and the eBusiness Security Solutions product line
introduced in the second quarter of 1998. The January 1999 introduction of
Enterprise Reporting Server products for multiple operating systems contributed
significantly to the growth of the eBusiness Intelligence Solutions line of
products. The Enterprise Server Cluster product, introduced in the fourth
quarter of 1998 to the eBusiness System Management Solutions product line
contributed significantly to the line's growth.

Support & Services

<TABLE>
<CAPTION>
                                 Three Months Ended September               Nine Months Ended
                                        September 30,                         September 30,
                                -----------------------------        ------------------------------
                                 1999      Change      1998            1999      Change      1998
                                -------    ------     -------        --------    ------     -------
<S>                             <C>        <C>        <C>            <C>         <C>        <C>
     Support Services           $ 906      310.0%      $ 221         $ 1,950    279.4%     $ 514
     Percent of Revenues         17.1%                  10.6%           15.8%                9.3%

                                                    Dollar amounts in thousands
</TABLE>


The increase in support services revenue resulted primarily from increased
subscription revenue derived from continued growth in the installed base of
customers, and the sale of consulting, training and support services, programs
initiated during the second half of 1998.

                                       9
<PAGE>   11

Cost of Revenue

<TABLE>
<CAPTION>
                                 Three Months Ended September               Nine Months Ended
                                        September 30,                         September 30,
                                -----------------------------        ------------------------------
                                 1999      Change      1998            1999      Change      1998
                                -------    ------     -------        --------    ------     -------
<S>                             <C>        <C>        <C>            <C>         <C>        <C>
     Cost of Revenue            $ 407      143.7%      $ 167         $ 1,040     133.7%     $  445
     Percent of Revenues          7.7%                   8.0%            8.4%                  8.0%

                                                    Dollar amounts in thousands
</TABLE>


Cost of revenue includes product packaging, software documentation, duplication,
labor, and other costs associated with product fulfillment, royalties associated
with the sale of WebTrends' products, and costs associated with providing
technical support and consulting services to customers. The increase in cost of
revenue resulted primarily from hiring customer support and professional
services personnel to meet demand from a larger customer base and manage and
perform consulting and training services.


OPERATING EXPENSES

Research & Development

<TABLE>
<CAPTION>
                                 Three Months Ended September               Nine Months Ended
                                        September 30,                         September 30,
                                -----------------------------        ------------------------------
                                 1999      Change      1998            1999      Change      1998
                                -------    ------     -------        --------    ------     -------
<S>                             <C>        <C>        <C>            <C>         <C>        <C>
     Research & Development     $ 1,137     77.9%      $ 639         $ 2,641      64.3%     $ 1,607
     Percent of Revenues           21.4%                30.6%           21.4%                  29.0%

                                                    Dollar amounts in thousands
</TABLE>


Research and development expenses consist primarily of salaries and related
costs associated with developing new products, enhancing existing products, and
performing quality assurance and documentation activities. The increase in
research and development expenses in absolute dollars is primarily attributable
to increasing the number of research and development employees over the periods
presented. Research and development expenses decreased as a percentage of total
revenue primarily due to the rapid growth in total revenue. WebTrends continues
to believe that significant investment in research and development is required
to remain competitive in its markets, and anticipates that research and
development expenses will increase in absolute dollars in future periods, but
may vary as a percent of total revenue.


Sales & Marketing

<TABLE>
<CAPTION>
                                 Three Months Ended September               Nine Months Ended
                                        September 30,                         September 30,
                                -----------------------------        ------------------------------
                                 1999      Change      1998            1999      Change      1998
                                -------    ------     -------        --------    ------     -------
<S>                             <C>        <C>        <C>            <C>         <C>        <C>
     Sales & Marketing          $ 2,550    190.8%      $ 877         $ 6,107     154.8%     $ 2,397
     Percent of Revenues           48.0%                42.0%           49.6%                  43.3%

                                                     Dollar amounts in thousands
</TABLE>


The increase in sales and marketing expense is primarily attributable to the
cost of hiring and maintaining additional sales and marketing personnel,
including employees to expand the direct sales force and to support indirect
distribution channels. Additionally, advertising dollars spent during the three
and nine months ended September 30, 1999 increased significantly over the same
periods in 1998. WebTrends expects that sales and marketing expenses

                                       10
<PAGE>   12

will continue to increase in absolute dollars as it continues to expand its
marketing programs and sales force to increase brand awareness, but they may
vary as a percent of total revenue.

General & Administrative

<TABLE>
<CAPTION>
                                 Three Months Ended September               Nine Months Ended
                                        September 30,                         September 30,
                                -----------------------------        ------------------------------
                                 1999      Change      1998            1999      Change      1998
                                -------    ------     -------        --------    ------     -------
<S>                             <C>        <C>        <C>            <C>         <C>        <C>
     General & Administrative    $ 828     132.6%      $ 356         $ 1,846      88.9%      $ 977
     Percent of Revenues          15.6%                17.04%           15.0%                 17.6%

                                                    Dollar amounts in thousands
</TABLE>


General and administrative expenses consist primarily of salaries and other
employee-related costs for executive, financial, human resources, and
infrastructure personnel. Legal and accounting services, and insurance and
general facility costs are also included within general and administrative
expenses. The increase in absolute dollars is primarily attributable to hiring
additional accounting, infrastructure and administration personnel, and public
company related costs during the nine months ended September 30, 1999. WebTrends
expects general and administrative expenses will continue to increase in
absolute dollars to support the anticipated expansion of sales and operations,
but they may vary as a percent of total revenue.

INCOME TAXES

The income tax provision increased by $520,000 for the three months ended
September 30, 1999 over the three months ended September 30, 1998, and increased
by $933,000 for the nine months ended September 30, 1999 over the nine months
ended September 30, 1998. Income taxes for the three and nine months ended
September 30, 1999, and for the three and nine months ended September 30, 1998,
reflect estimated effective tax rates of 37.5% and 12.0%, respectively. The
increase is primarily due to increased income from operations resulting from
WebTrends' rapid revenue growth and interest income generated from the
investment of funds raised from the initial and follow-on stock offerings,
partially offset by the utilization of research and development tax credits
associated with its investment in developing new products.

YEAR 2000 ISSUES

All new products introduced by WebTrends are anticipated to be year 2000
compliant. The Company has tested our existing products for use in the year 2000
and beyond. The results suggest that the following versions of our products, and
later versions of such products, are year 2000 compliant: AuditTrack v 3.2 -
SmartPass v1.09 - WebTrends Log Analyzer v 4.0a - WebTrends Professional Suite
v3.0a - WebTrends Enterprise Suite v3.0a - WebTrends Suite for Lotus Domino
v2.0a - WebTrends for Firewalls and VPNs v1.0 - WebTrends Security Analyzer
v.2.0 - WebTrends Enterprise Reporting Server for Solaris v1.0 - WebTrends
Enterprise Reporting Server for Linux v1.0. However, our testing does not cover
every possible computing environment. Accordingly, some customers may have year
2000 problems with products that WebTrends believes are year 2000 compliant.

WebTrends' customers may be using older versions of the above products. Problems
encountered by such customers could be quickly remedied because of the
availability of year 2000 upgrades and updates for such products. In addition,
WebTrends has not tested discontinued products that it no longer markets for
year 2000 compliance, some of which might still be in use. These discontinued
products are not widely deployed. WebTrends expects that any customers that
materially rely on such discontinued products will test them for year 2000
compliance and notify WebTrends if there are problems. WebTrends' experience in
developing year 2000 compliant versions of its existing products suggests that
if it is required to correct year 2000 problems in such discontinued products,
it could do so without incurring material expenses.

                                       11
<PAGE>   13

WebTrends may be affected by year 2000 issues related to non-compliant internal
systems developed by WebTrends or by third-party vendors. The Company has
received assurances from third-party vendors for all mission-critical systems in
use that such systems are year 2000 compliant and WebTrends is not currently
aware of any year 2000 problem relating to any of its internal, mission-critical
systems. The Company expects that it will continue to address Year 2000
readiness issues up to and including the Year 2000, and will react as
appropriate to newly-identified issues.

WebTrends' internal operations and business are also dependent upon the
computer-controlled systems of third parties such as suppliers, customers, and
service providers. The Company believes that absent a systemic failure outside
the control of WebTrends, such as a prolonged loss of electrical or telephone
service, year 2000 problems at such third parties will not have a material
impact on WebTrends. WebTrends' contingency plan in the event of a third party
system failure is to establish relationships with alternative suppliers or
vendors to replace failed suppliers or vendors.

WebTrends does not separately track expenditures relating to year 2000
compliance. Such expenditures are primarily absorbed within the Company's
development organization. Based on the overall development expenditures and the
amount of time people in the organization are spending on year 2000 compliance,
WebTrends believes that its spending on compliance to date has not been
material. Furthermore, based on its experiences to date, and its assessment that
all mission-critical internal systems and all currently marketed products are
year 2000 compliant, WebTrends does not anticipate that costs associated with
remediating WebTrends' non-compliant products or internal systems would be
material.

Any failure of WebTrends to make its products year 2000 compliant could result
in a decrease in sales of the Company's products, an increase in allocation of
resources to address year 2000 problems of its customers without additional
revenue commensurate with such dedication of resources, or an increase in
litigation costs relating to losses suffered by WebTrends' customers due to such
year 2000 problems. Failures of the internal systems of WebTrends could
temporarily prevent us from processing orders, issuing invoices, and developing
products, and could require the Company to devote significant resources to
correcting such problems. Due to the general uncertainty inherent in the year
2000 computer problem, resulting from the uncertainty of the year 2000 readiness
of third-party suppliers and vendors, WebTrends is unable to determine at this
time whether the consequences of year 2000 failures will have a material impact
on its business, results of operations, and financial condition.


LIQUIDITY AND CAPITAL RESOURCES

WebTrends had cash and cash equivalents and short-term investments of $77.5
million at September 30, 1999, which represents the Company's primary source of
liquidity, and working capital of approximately $75.2 million.

The Company's primary market risk exposure is the impact of interest rate
fluctuations on interest income earned on its investment portfolio. The risks
associated with market, liquidity and principal are mitigated by investing in
high-credit quality securities and limiting concentrations of issuers and
maturity dates. Derivative financial instruments are not part of the Company's
investment portfolio. The Company has no debt instruments nor credit facilities
as the line of credit expired in April 1999 and has not been renewed.

Cash and cash equivalents and short-term investments increased by $76.4 million
during the nine months ended September 30, 1999, primarily as a result of cash
generated by financing and operating activities. The Company received
approximately $74.4 million from the completion of its initial and follow-on
public offerings in February and May of 1999 and the exercise of stock options.
Net cash provided by operating activities was approximately $3.5 million for the
nine months ended September 30, 1999, and resulted primarily from profitable
operations and increased deferred revenues and accrued liabilities, partially
offset by increased accounts receivable for the periods indicated. Cash used by
investing activities, net of the purchase of short-term investments, was
approximately $1.3 million for the nine months ended September 30, 1999,
consisting primarily of purchased computer equipment and furniture and fixtures
related to increased personnel.

                                       12
<PAGE>   14

While increasing in absolute dollars, for the three and nine month periods ended
September 30,1999, operating expenses decreased as a percentage of revenue to
85.1 % and 86.0 %, respectively, from 89.6% and 89.9% for the same periods in
1998. Since inception, the Company has continued to increase its operating
expenses in terms of absolute dollars. WebTrends anticipates that the Company
will continue to reinvest revenues in operating expenses for the foreseeable
future, and that these expenses plus capital expenditures will constitute a
material use of cash resources. Additionally, WebTrends may utilize cash
resources to fund acquisitions or investments in businesses, technologies, or
product lines that are complementary to its business. WebTrends believes that
its current cash and cash equivalents, short-term investments, and funds
expected to be generated from operations will satisfy its anticipated working
capital and other cash requirements for at least the next 12 months.

                                       13
<PAGE>   15

                          PART II -- OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     WebTrends was not involved in any material legal proceedings during the
     three and nine months ended September 30, 1999.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

(d)  USE OF PROCEEDS

     On February 18, 1999, WebTrends' registration statement on form S-1, file
     number 333-69171, became effective. Proceeds to WebTrends were $35,156,421.
     The proceeds are being applied in part to working capital with the
     remainder in temporary investments consisting of money market accounts
     available on a daily basis and short-term commercial paper.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

     See Exhibit Index.

(b)  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the quarter covered by this Form
     10-Q.

                                       14
<PAGE>   16

                                   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.

                                        WEBTRENDS CORPORATION
                                            (Registrant)

Date: November 15, 1999                 By /s/ JAMES T. RICHARDSON
                                          --------------------------------------
                                        James T. Richardson
                                        Senior Vice President, Chief Financial
                                        Officer, and Secretary
                                        (principal financial and chief
                                        accounting officer)

                                       15
<PAGE>   17

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.        DESCRIPTION
-----------        -----------
<S>                <C>
     27.1          Financial Data Schedule
</TABLE>