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

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                                   FORM 10-Q

              X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             ---    OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the Quarterly Period Ended June 30, 1997

                  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             ---    OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the Transition Period From ____ to ____

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

                       Commission File Number 000-22649

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

          WASHINGTON                                      91-1497147
  (State or other jurisdiction                         (I.R.S. Employer 
of incorporation or organization)                    Identification Number)

      FORT DENT ONE, SUITE 250
         6720 FORT DENT WAY
   SEATTLE, WASHINGTON 98188-2555                       (206) 433-2081
(Address of principal executive office)        (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 for such reports),
and

         (2) Has been subject to such filing requirements for the past 90 days.

             Yes    No X
                ---   ---  

         The number of shares outstanding of the registrant's common stock as of
June 30, 1997 was 9,735,166.
<PAGE>
 
                               ARIS CORPORATION
                                   FORM 10-Q


INDEX                                                                       PAGE

PART I.   FINANCIAL INFORMATION

Item 1          Financial Statements
                a)  Condensed Consolidated Balance Sheets as of                3
                    June 30, 1997 and December 31, 1996
                b)  Condensed Consolidated Statements of Income                4
                    for the Quarters and Six Months Ended June 30,
                    1997 and 1996.
                c)  Condensed Consolidated Statements of Cash                  5
                    Flows for the Six Months Ended June 30, 1997
                    and 1996
                d)  Condensed Consolidated Statement of Changes                6
                    in Shareholders' Equity as of June 30, 1997
                e)  Notes to Condensed Consolidated Financial                  7
                    Statements
Item 2              Management's Discussion and Analysis of Financial       8-14
                    Condition and Results of Operations

PART II.  OTHER INFORMATION

Item 1              Legal Proceedings                                         15
Item 2              Changes in Securities                                     15
Item 3              Defaults Upon Senior Securities                           15
Item 4              Submission of Matters to a Vote of Security               15
                    Holders
Item 5              Other Information                                         16
Item 6              Exhibits and Reports on Form 8-K                          16


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

                                     Page 2
<PAGE>
 
                                    PART I
                             FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

ARIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
--------------------------------------------------------------------------------

                                           JUNE 30,        DECEMBER 31,
                                             1997              1996
                                       -----------------  ----------------

Assets
Current assets:
     Cash and cash equivalents.....       $  28,276          $     177
     Investments in marketable
     securities....................                              1,396
     Accounts receivable, net of
     allowance for doubtful accounts
     of $479 and $300..............           9,298              5,169
     Other current assets..........           1,657              1,052
                                       -----------------  ----------------
         Total current assets......          39,231              7,794
Property and equipment, net                   4,327              2,517
Intangible and other assets, net              3,527              2,645
                                       -----------------  ----------------
         Total assets..............       $  47,085          $  12,956
                                       =================  ================

Liabilities and Shareholders' Equity
Current liabilities:
     Accounts payable..............       $   3,253          $     787
     Accrued liabilities...........           2,232              1,196
     Notes payable.................                              1,500
     Other current liabilities.....           1,877                550
                                       -----------------  ----------------
         Total current liabilities.           7,362              4,033
                                       -----------------  ----------------

Deferred income taxes..............             611                713
                                       -----------------  ----------------


Shareholders' equity:
     Preferred stock, 5,000,000
     shares authorized.............               -                  -
     Common stock, no par value;
     100,000,000 shares authorized;
     7,555,900 and 9,735,166 shares
     outstanding...................          34,626              1,943
     Retained earnings.............           4,483              6,042
     Net unrealized holding gain on
     investments...................                                225
     Cumulative foreign currency
     translation adjustment........               3
                                       -----------------  ----------------
         Total shareholders' equity          39,112              8,210
                                       =================  ================
Total liabilities and shareholders'
equity.............................       $  47,085          $  12,956
                                       =================  ================


                            See accompanying notes
--------------------------------------------------------------------------------

                                     Page 3
<PAGE>
 
ARIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share data)
--------------------------------------------------------------------------------
<TABLE> 
<CAPTION> 
                                             FOR THE QUARTER ENDED               FOR THE SIX MONTHS ENDED
                                       -----------------------------------  -----------------------------------
                                        JUNE 30, 1997      JUNE 30, 1996     JUNE 30, 1997     JUNE 30, 1996
                                       -----------------  ----------------  ----------------  -----------------
<S>                                    <C>                <C>                <C>              <C>   
Revenue, net:
     Consulting....................       $    7,357         $   3,497         $  13,990         $   6,040
     Training......................            5,372             2,601             8,615             4,379
     Software......................              778               176             1,311               282
                                       -----------------  ----------------  ----------------  -----------------
         Total revenue.............           13,507             6,274            23,916            10,701
Cost of sales                                  6,260             3,014            11,209             5,195
                                       -----------------  ----------------  ----------------  -----------------
     Gross profit..................            7,247             3,260            12,707             5,506
Selling, general and administrative 
expense............................            5,353             2,064             9,104             3,509
                                       -----------------  ----------------  ----------------  -----------------
     Income from operations........            1,894             1,196             3,603             1,997
Other income (expense), net........              226                44               184                46
                                       -----------------  ----------------  ----------------  -----------------
Income before income tax...........            2,120             1,240             3,787             2,043
Income tax expense.................              817               451             1,440               748
                                       -----------------  ----------------  ----------------  -----------------
Net income.........................       $    1,303         $     789         $   2,347         $   1,295
                                       =================  ================  ================  =================
Net income per share...............       $     0.16         $    0.09         $    0.28         $    0.15
                                       =================  ================  ================  =================
Weighted average number of  common
and common equivalent shares
outstanding........................        8,382,000         8,621,000         8,457,000         8,620,000
                                       =================  ================  ================  =================
</TABLE> 

                            See accompanying notes
--------------------------------------------------------------------------------

                                     Page 4
<PAGE>
 
ARIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
--------------------------------------------------------------------------------

                                             FOR THE SIX MONTHS ENDED
                                       -----------------------------------

                                       JUNE 30, 1997     JUNE 30, 1996
                                       -------------     -------------

Net cash provided by operating
activities.........................       $   2,137         $   1,382
                                       ----------------  -----------------

Cash flows from investing activities:
Purchases of investments in
marketable securities..............            (166)             (271)
Sales of investments in marketable
securities.........................           1,337              
Acquisition of businesses, net of
cash acquired......................             (93)
Purchase of property and equipment.            (995)             (540)
                                       ----------------  -----------------
Net cash provided by (used in)
 investing activities..............              83              (811)
                                       ----------------  -----------------

Cash flows from financing activities:
Proceeds from initial public
offering, net of offering costs....          31,391
Repurchase of common stock.........          (4,027)             (100)
Payments on notes payable..........         (10,075)
Proceeds from long-term debt.......           8,575                41
Other, net.........................              12                10
                                       ----------------  -----------------
Net cash provided by (used in)
financing activities...............          25,876               (49)
                                       ----------------  -----------------

Net increase in cash and cash
equivalents........................          28,096               522
Effect of exchange rate changes on
cash and cash equivalents..........               3
Cash and cash equivalents at
beginning of period................             177             1,241
                                       ----------------  -----------------
Cash and cash equivalents at end of
period.............................       $  28,276         $   1,763
                                       ================  =================


                            See accompanying notes
--------------------------------------------------------------------------------

                                     Page 5
<PAGE>
 
ARIS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands, except for share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                       NET       CUMULATIVE
                                                COMMON STOCK                         UNREALIZED    FOREIGN
                                          --------------------------                  HOLDING      CURRENCY        TOTAL
                                             SHARES                    RETAINED       GAIN ON     TRANSLATION    SHAREHOLDERS'
                                             ISSUED       AMOUNT       EARNINGS     INVESTMENTS   ADJUSTMENT      EQUITY

                                          ------------- ------------  ------------  ------------  ------------  ------------
<S>                                        <C>           <C>          <C>           <C>           <C>           <C>
Balance at December 31, 1996..........    7,555,900       $ 1,943       $ 6,042       $   225                     $ 8,210
Shares issued in initial public          
offering, net of offering costs.......    2,300,000        31,391                                                  31,391
Shares issued in acquisitions.........      280,000         1,400                                                   1,400
Stock redemption......................     (415,000)         (121)       (3,906)                                   (4,027)
Stock options exercised...............       14,266            13                                                      13
Unrealized holding loss on            
investments...........................                                                    (16)                        (16)
Realization of holding gain upon
sale of  investments..................                                                   (209)                       (209)
Foreign currency translation
adjustment............................                                                              $     3             3
Net income............................                                    2,347                                     2,347
                                          ------------- ------------  ------------  ------------  ------------  ------------
Balance at June 30, 1997..............    9,735,166       $34,626       $ 4,483       $     -       $     3       $39,112
                                          ============= ============  ============  ============  ============  ============
</TABLE>

                                     Page 6
<PAGE>
 
ARIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------------------------------

     1.  The unaudited financial information furnished herein, in the opinion 
         of management, reflects all adjustments consisting only of normal,
         recurring adjustments which are necessary to state fairly the condensed
         consolidated balance sheets, and condensed consolidated statements of
         income, statements of cash flows and statement of changes in
         shareholders' equity of ARIS Corporation ("ARIS" or the "Company") as
         of and for the periods indicated. ARIS presumes that users of the
         interim financial information herein have read or have access to the
         Company's audited consolidated financial statements and Management's
         Discussion and Analysis of Financial Condition and Results of
         Operations for the preceding fiscal year included in the Company's Form
         S-1 Registration Statement and that the adequacy of additional
         disclosure needed for a fair presentation, except in regard to material
         contingencies or recent significant events, may be determined in that
         context. Accordingly, footnote and other disclosures which would
         substantially duplicate the disclosures contained in the Company's Form
         S-1 Registration Statement ("Registration Statement") filed on May 29,
         1997, as amended, have been omitted.

     2.  The Registration Statement contained the final prospectus with respect
         to 2,320,080 shares of the Company's common stock offered therein. The
         initial public offering price was $15.00 per share. Of the total shares
         sold, 20,800 shares were sold by selling shareholders. The net proceeds
         received by the Company were $31,391,000 after the deduction of
         underwriting discounts and commissions and other offering expenses.
         From such net proceeds the Company repaid a revolving bank loan in
         accordance with repayment terms of the lending agreement in the amount
         of $4 million plus accrued interest. The remainder of the net proceeds
         (approximately $27,391,000) will be used for general corporate
         purposes, acquisitions of businesses and capital expenditures
         associated with the expansion of the Company's operations. Prior to the
         offering made pursuant to the Registration Statement, there had been no
         public market for the Company's common stock.

     3.  In February 1997, the Company repurchased 415,000 shares of its common
         stock at $8.50 and $9.75 per share from certain shareholders of the
         Company. The stock repurchase was financed by the Company's revolving
         line of credit.

     4.  In February 1997,  the Company acquired the stock of Oxford Computer
         Group Limited ("Oxford"), a company that provides information
         technology consulting and training services with offices in Oxford,
         London and Birmingham, England. The shareholders of Oxford exchanged
         all of their issued and outstanding shares of Oxford for 280,000 shares
         of the Company's common stock. The acquisition has been accounted for
         using the purchase method. Accordingly, the results of operations of
         Oxford are included with the results of operations for the Company for
         periods subsequent to the date of acquisition. Subsequent to the
         acquisition of Oxford, 207,891 stock options were granted to employees
         of Oxford. Terms of the option agreements include an exercise price of
         $9.40 and vesting over four years. Oxford had revenues of approximately
         $7,384,000 and net income of approximately $170,000 for the year ended
         December 31, 1996.

         The unaudited pro forma combined results of operations of the Company
         and Oxford are as follows:
                                                  For the Six Months Ended
                                               ------------------------------ 
                                               June 30, 1997    June 30, 1996
                                               -------------    -------------
           Total Revenue                        $ 25,502,000     $ 14,074,000
           Net Income                           $  2,419,000     $  1,374,000
           Net income per share                 $        .29     $        .16

                                     Page 7
<PAGE>
 
      5. In February 1997, Statement of Financial Accounting Standards No. 128,
         Earnings per Share (SFAS 128), was issued. This pronouncement modifies
         the calculation and disclosure of earnings per share (EPS) and will be
         adopted by the Company in its financial statements for the year ended
         December 31, 1997. Although early adoption is not permitted, proforma
         disclosure is permitted (see Exhibit 11). After the adoption date, EPS
         data for all periods presented, including quarterly financial data, are
         required to be restated to conform with the provisions of SFAS 128.

                                     Page 8
<PAGE>
 
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
           RESULTS OF OPERATIONS

OVERVIEW

         ARIS provides an integrated information technology ("IT") solution
consisting of consulting and training services primarily focused on Oracle
Corporation ("Oracle") and Microsoft Corporation ("Microsoft") technologies.
ARIS currently focuses on three core consulting competencies: packaged
application implementation, custom application development and systems
architecture planning and deployment. The Company offers instructor-led training
for IT professionals conducted at ARIS' training centers and at client
facilities. The Company also develops, markets and supports proprietary software
products that enhance Oracle database management and Oracle packaged
applications. The Company believes that its ability to provide clients with an
integrated IT solution, coupled with its focus on leading-edge technologies,
provide it with a unique competitive advantage.

         This commentary should be read in conjunction with the sections of the
following documents for a full understanding of the Company's financial
condition and results of operations: from the Company's Registration Statement
filed May 29, 1997, as amended and its Prospectus dated June 18, 1997, the Risk
Factors, pages 3 to 10, Management's Discussion and Analysis of Financial
Condition and Results of Operations, pages 15 to 25, and the Consolidated
Financial Statements and Notes to Consolidated Financial Statements on pages F-1
to F-31; and from the Company's Quarterly Report on Form 10-Q for the period
ending June 30, 1997, of which this commentary is a part, the Consolidated
Financial Statements and Notes to Consolidated Financial Statements, pages 3
through 7.

         All statements, trend analysis and other information contained herein
relative to markets for the Company's services and products and trends in
revenue, gross margin and anticipated expense levels, as well as other
statements including words such as "seek," "anticipate," "believe," "plan,"
"estimate," "expect," "intend," and other similar expressions, constitute
forward-looking statements. These forward-looking statements are subject to
business and economic risks, and the Company's actual results of operations may
differ materially from those contained in the forward-looking statements.

         SECOND QUARTER 1997 COMPARED TO SECOND QUARTER 1996

         TOTAL REVENUE

         Total revenues increased $7,233,000 to $13,507,000 for the quarter
ended June 30, 1997 from $6,274,000 for the quarter ended June 30, 1996,
representing a 115% increase. On a pro forma basis (assuming all companies
acquired by ARIS subsequent to April 1, 1996 had been owned throughout the
comparison periods), total revenues increased approximately 53%. As discussed
below, increases in revenues were reflected in all three lines of business.

                                     Page 9
<PAGE>
 
         CONSULTING REVENUE

         Consulting revenue increased as a result of an overall increase in the
level of consulting activity. The Company employed or contracted for the
services of 177 full-time consultants and project managers at June 30, 1997
compared to 83 at June 30, 1996. Consulting revenues increased $3,860,000 to
$7,357,000 for the quarter ended June 30, 1997 from $3,497,000 for the quarter
ended June 30, 1996 representing a 110% increase. Consulting operations were
conducted from seven consulting offices in the United States and United Kingdom
including four offices which were either newly opened or which initiated
consulting revenue producing activities after June 30, 1996.

         TRAINING REVENUE

         Training revenue increased $2,771,000 to $5,372,000 for the quarter
ended June 30, 1997 from $2,601,000 for the quarter ended June 30, 1996,
representing a 107% increase. A significant portion of the increase in training
revenues for the second quarter of 1997 is attributable to business units
acquired subsequent to May 1, 1996. ARIS acquired SQL Soft Inc. in May 1996,
SofTeach Corporation in October 1996, and Oxford in February 1997. On a pro
forma basis (assuming the companies acquired by ARIS subsequent to April 1, 1996
had been owned throughout the comparison periods), total revenues increased
approximately 20%. In addition, revenues increased in the comparison period as a
result of a significant increase in the number of classes and class training
days offered. The Company offered 995 classes and 2,548 training days in the
quarter ended June 30, 1997 as compared to 289 classes and 1,105 training days
in the quarter ended June 30, 1996.

         SOFTWARE REVENUE

         Software revenue increased $602,000 to $778,000 for the quarter ended
June 30, 1997 from $176,000 in the quarter ended June 30, 1996, representing an
increase of 342%. The increase in revenue is primarily attributable to sales of
the NoetixViews suite of products developed by Noetix Corporation ("Noetix").
ARIS acquired Noetix in a transaction accounted for as a purchase on October 1,
1996.

         COST OF SALES

         Cost of sales consists primarily of salaries and employee benefits for
consultants, project managers and instructors; subcontractor fees; and
non-reimbursable travel expenses related to consulting and training activities
as well as cost of production of software modules and amortization of
capitalized software costs. Cost of sales increased $3,246,000 to $6,260,000 in
the quarter ended June 30, 1997 from $3,014,000 in the quarter ended June 30,
1996. The increase in cost of sales is primarily a reflection of the increase in
sales. Cost of sales as a percentage of sales decreased from 48% for the quarter
ended June 30, 1996 to 46% for the quarter ended June 30, 1997. The reduction in
percentage of sales is a result of the relative increase in proportion of
training and software revenues to total revenue. Training and software
operations typically have lower cost of sales and higher selling, general and
administrative ("SG&A") expenses when compared to consulting operations.
Training operations utilize a lower proportion of professional labor and
benefits, which are included in cost of sales, and

                                    Page 10
<PAGE>
 
higher proportions of marketing, facilities and general office administration
costs which are included in SG&A. The percentage reduction in cost of sales is
also attributable to inclusion in the quarter ended June 30, 1997 of Oxford
which derives its principal revenues from training operations and therefore
contributes a lower proportion of cost of sales and higher SG&A expenses.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

         SG&A expense consists of salaries and employee benefits for executive,
managerial, administrative and sales personnel; facility leases; amortization of
capitalized computer hardware and equipment costs; software license fees and
travel and business development costs. SG&A expense increased $3,289,000 to
$5,353,000 for the quarter ended June 30, 1997 from $2,064,000 for the quarter
ended June 30, 1996, representing an increase of 159%. This increase is
attributable primarily to growth in the number of management, sales and
administrative staff from 76 at June 30, 1996 to 176 at June 30, 1997. SG&A
expense as a percentage of total revenue increased from 33% for the quarter
ended June 30, 1996 to 40% for the quarter ended June 30, 1997. The increase is
primarily attributable to the addition of Oxford, which has higher SG&A expenses
as a percentage of revenues than do similar operations in the United States.
Professional information technology wages in the United Kingdom which are
included in cost of sales are relatively lower than in the United States while
the cost of facilities and the company's administration costs are generally
higher than comparable operations in the Company's United States operations.
SG&A expenses, as a percentage of revenues, also increased because the Company's
revenues from training and software as a percentage of all revenues increased.
These business lines typically have higher SG&A costs and lower cost of sales
relative to sales when compared to consulting operations.

         OTHER INCOME (EXPENSE), NET

         Other income (expense), net, consists primarily of interest associated
with short term borrowings; interest income on cash and cash equivalents; and
gain on sale of equity investments. Other income (expense), net, increased
$182,000 from $44,000 for the quarter ended June 30, 1996 to $226,000 for the
quarter ended June 30, 1997 primarily as a result of a $282,000 gain realized on
the sale of $1,337,000 of equity securities prior to the Company's initial
public offering.

         INCOME TAX EXPENSE

         Income tax expense increased $366,000 to $817,000 in the quarter ended
June 30, 1997 from $451,000 for the quarter ended June 30, 1996 as a result of
increased revenues and net income before tax. As a percentage of revenues,
income tax expense decreased from 7.2% to 6.1% and the effective tax rate
increased from 36.3% to 38.5%. The effective tax rate is influenced by the mix
of United Kingdom and United States tax rates as well as the tax rates of the
various states in which the Company conducts its operations. The increase in the
effective tax rate is principally the result of the Company conducting
operations in an increasing number of states with income taxes. Since July,
1996, the Company has opened offices or acquired

                                    Page 11
<PAGE>
 
operating companies in Oregon, Florida, Colorado and Texas; each of which has
caused the Company to pay incremental taxes based on revenues in those
locations.

         NET INCOME

         Net income increased $514,000 to $1,303,000 for the quarter ended June
30, 1997 from $789,000 for the quarter ended June 30, 1996. Net income as a
percentage of sales decreased from 12.6% to 9.6% primarily as a result of higher
SG&A expenses as a percentage of sales and lower net income of United Kingdom
operations compared to net income of United States operations.

       SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

         TOTAL REVENUE

         Total revenues increased $13,215,000 to $23,916,000 for the six months
ended June 30, 1997 from $10,701,000 for the six months ended June 30, 1996,
representing a 123% increase. On a pro forma basis (assuming all companies
acquired by ARIS subsequent to January 1, 1996 had been owned throughout the
comparison periods), total revenues increased approximately 52%. As discussed
below, increases in revenues were reflected in all three lines of business.

         CONSULTING REVENUE

         Consulting revenue increased as a result of an overall increase in the
level of consulting activity. The Company employed or contracted for the
services of 177 full-time consultants and project managers at June 30, 1997
compared to 83 at June 30, 1996. Consulting revenues increased $7,950,000 to
$13,990,000 for the six months ended June 30, 1997 from $6,040,000 for the six
months ended June 30, 1996 representing a 132% increase. Consulting operations
were conducted from seven consulting offices in the United States and United
Kingdom including four offices which were either newly opened or which initiated
consulting revenue producing activities after June 30, 1996.

         TRAINING REVENUE

         Training revenue increased $4,236,000 to $8,615,000 for the six months
ended June 30, 1997 from $4,379,000 for the six months ended June 30, 1996,
representing a 97% increase. A significant portion of the increase in training
revenues for the six months ended June 30, 1997 is attributable to business
units acquired subsequent to May 1, 1996. ARIS acquired SQL Soft Inc. in May
1996, SofTeach Corporation in October 1996, and Oxford in February 1997. On a
pro forma basis (assuming the companies acquired by ARIS subsequent to January
1, 1996 had been owned throughout the comparison periods), total revenues
increased approximately 8%. In addition, revenues increased in the comparison
period as a result of a significant increase in the number of classes and class
training days offered. The Company offered 1,470 classes and 3,986 training days
in the six months ended June 30, 1997 as compared to 477 classes and 1,822
training days in the six months ended June 30, 1996.

                                    Page 12
<PAGE>
 
         SOFTWARE REVENUE

         Software revenue increased $1,029,000 to $1,311,000 for the six months
ended June 30, 1997 from $282,000 for the six months ended June 30, 1996,
representing an increase of 365%. The increase in revenue is primarily
attributable to sales of the NoetixViews suite of products developed by Noetix
Corporation ("Noetix"). ARIS acquired Noetix in a transaction accounted for as a
purchase transaction on October 1, 1996.

         COST OF SALES

         Cost of sales increased $6,014,000 to $11,209,000 in the six months
ended June 30, 1997 from $5,195,000 in the six months ended June 30, 1996. The
increase in cost of sales is primarily a reflection of the increase in sales.
Cost of sales as a percentage of sales decreased from 48.5% for the six months
ended June 30, 1996 to 47% for the six months ended June 30, 1997. The reduction
in cost of sales as a percentage of sales is a result of the relative increase
in proportion of training and software revenues to total revenue. The percentage
reduction in cost of sales is also attributable to inclusion in the six months
ended June 30, 1997 of Oxford.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

         SG&A expense increased $5,595,000 to $9,104,000 for the six months
ended June 30, 1997 from $3,509,000 for the six months ended June 30, 1996,
representing an increase of 159%. This increase is attributable primarily to
growth in the number of management, sales and administrative staff from 76 at
June 30, 1996 to 176 at June 30, 1997. SG&A expense as a percentage of total
revenue increased from 33% for the six months ended June 30, 1996 to 38% for the
quarter ended June 30, 1997. The increase is primarily attributable to the
addition of Oxford, which has higher SG&A expenses as a percentage of revenues
than do similar operations in the United States.

         OTHER INCOME (EXPENSE), NET

         Other income (expense), net, increased $138,000 from $46,000 for the
six months ended June 30, 1996 to $184,000 for the six months ended June 30,
1997 primarily as a result of a $282,000 gain realized on the sale of $1,337,000
of equity securities prior to the Company's initial public offering.

         INCOME TAX EXPENSE

         Income tax expense increased $692,000 to $1,440,000 in the six months
ended June 30, 1997 from $748,000 for the six months ended June 30, 1996 as a
result of increased revenues and net income before tax. As a percentage of
revenues, income tax expense decreased from 7% to 6% and the effective tax rate
increased from 36.6% to 38%. The effective tax rate is influenced by the mix of
United Kingdom and United States tax rates as well as the tax rates of the
various states in which the Company conducts its operations. The higher
effective tax rate is principally the result of the Company conducting
operations in an increasing number of states with income taxes.

                                    Page 13
<PAGE>
 

         NET INCOME

         Net income increased $1,052,000 to $2,347,000 for the six months ended
June 30, 1997 from $1,295,000 for the six months ended June 30, 1996. Net income
as a percentage of sales decreased from 12.1% to 9.8% primarily as a result of
higher selling, general and administrative costs as a percentage of sales and
lower net income of United Kingdom operations compared to net income of United
States operations.

LIQUIDITY AND CAPITAL RESOURCES

         As of June 30, 1997 the Company had working capital of $ 31,869,000
including cash or cash equivalents of $28,276,000. The Company intends to
finance its working capital needs, as well as purchases of additional property
and equipment for its operations, from cash generated by operations and
available cash.

         Net cash provided by operating activities was $2,137,000 for the six
months ended June 30, 1997. Cash was also provided by the sale of marketable
equity securities in the net amount of $1,337,000 while cash was utilized for
the purchase of property and equipment in the amount of $995,000 and the
acquisition of a business in the amount of $93,000. The Company's primary
financing activity in the six months ended June 30, 1997 was the completion of
its initial public offering which provided $31,391,000 of cash proceeds net of
costs of the offering. The Company utilized $4,027,000 to repurchase 415,000
shares of its common stock. Additionally, $10,075,000 was utilized to repay debt
of which $8,575,000 had been initially borrowed in the same period. As a result,
cash increased $28,096,000 in the six months ended June 30, 1997.

         The Company has financed its acquisitions of businesses through cash
generated by operating activities, offering debt instruments to sellers and by
exchange of its common stock. The Company believes that it will be able to
continue to fund all capital required to acquire new businesses with cash
generated from operations, cash currently on hand and a bank borrowing facility
in the amount of $8,000,000. To continue its growth strategy, however, the
Company may need to issue additional debt or equity securities.

                                    Page 14
<PAGE>
 
                                    PART II
                               OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS

         The Company is involved from time to time in routine legal proceedings
incidental to its business. As of June 30, 1997, the Company was not involved in
any material legal proceedings.


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

         The Company held its annual meeting (the "Annual Meeting") of
shareholders on April 25, 1997. Shareholders holding an aggregate of 7,166,360
shares of the Company's common stock were represented in person or by proxy,
representing 96.53% of all of the Company's shares issued and outstanding as of
the record date established for the Annual Meeting. All of the Company's
directors were re-elected at, and their respective terms of office continued
after, the Annual Meeting. The directors include Paul Y. Song, Kendall W. Kunz,
Bruce R. Kennedy and Kenneth A. Williams.

         In addition to the election of directors, shareholders voted, in person
or by proxy on the following items: (i) Adoption of Amended and Restated
Articles of Incorporation; (ii) Ratification of Name Change from "Applied
Relational Information Systems, Inc." to "ARIS Corporation"; (iii) Adoption of
Amended and Restated Bylaws; (iv) Adoption of 1997 Stock Option Plan and (v)
Ratification of Acts of Officers and Directors. All of the foregoing matters
were approved by a unanimous vote of the 7,166,360 shares represented at the
meeting with no abstentions or broker no-votes.

         Each of the directors were elected as follows:
<TABLE> 
<CAPTION> 

NAME                               FOR                  AGAINST              ABSTAIN             BROKER NO-VOTES
<S>                                <C>                  <C>                  <C>                 <C>         
Paul Y. Song                       7,166,360            0                    0                   0
Kendall W. Kunz                    7,166,360            0                    0                   0
Bruce R. Kennedy                   7,166,360            0                    0                   0
Kenneth A. Williams                7,166,360            0                    0                   0

</TABLE> 

                                    Page 15
<PAGE>
 
ITEM 5.    OTHER INFORMATION

         Not applicable.


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

         (A)      EXHIBITS

                  See Exhibit Table on page 18.

         (B)      REPORTS ON FORM 8-K

                  No reports on Form 8-K were filed by the Company during the
quarter ended June 30, 1997.

                                    Page 16
<PAGE>
 
                                   SIGNATURE


         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.

           Dated this ____ of August 1997.            ARIS Corporation



                                              By:
                                                 _____________________________
                                                 Thomas W. Averill
                                                 Vice President, Finance;
                                                 Chief Financial Officer
                                                 (Principal Financial and
                                                 Accounting Officer and Duly
                                                 Authorized Officer)

                                    Page 17
<PAGE>
 
                                   EXHIBITS


      PAGE             EXHIBIT NUMBER      EXHIBIT NAME
      ---              --------------      ------------               
       19                   11.1           Computation of Earnings Per Share
       20                   27.1           Financial Data Schedule

                                    Page 18