SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                       ----------------------------------
                                    FORM 10-Q



                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                  for the quarterly period ended July 31, 1999

                         Commission File Number 0-19558



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


        Delaware                                             94-2418021
(State of incorporation)                                  (I.R.S. Employer
                                                          Identification Number)

                              91 East Tasman Drive
                           San Jose, California 95134
                    (Address of principal executive offices)


       Registrant's telephone number, including area code: (408) 944-0250





     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                        Yes  __X__   No  _____


     The number of  outstanding  shares (not including  treasury  shares) of the
Registrant's Common Stock as of August 27, 1999, was 5,992,000.




<PAGE>



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Centigram Communications Corporation
Condensed Consolidated Balance Sheets

(In thousands, except share and               July 31,     October 31,
    per share data)                             1999          1998
------------------------------------------  ------------  ------------
                                            (Unaudited)      (Note)
Assets
Current Assets:
    Cash and cash equivalents ............   $  8,458      $ 23,430
    Short-term investments ...............     34,501        33,760
    Trade receivables, net ...............     16,802        14,566
    Inventories ..........................      2,294         5,297
    Other current assets .................      1,649         1,745
                                             --------      --------
       Total current assets ..............     63,704        78,798
Property and equipment, net ..............      4,706         6,653
Intangible assets, net ...................      5,748         6,637
Deposits and other assets ................      3,507         3,889
                                             ========      ========
                                             $ 77,665      $ 95,977
                                             ========      ========
Liabilities and Stockholders' Equity
Current Liabilities:
    Accounts payable .....................   $  4,071      $  5,985
    Accrued compensation .................      3,827         4,034
    Patent settlement payable ............         --         9,200
    Deferred income ......................      3,526         4,394
    Accrued expenses and other
       liabilities .......................      5,694         5,179
    Warranty and retrofit reserves .......      2,038         1,977
                                             --------      --------
       Total current liabilities .........     19,156        30,769

Commitments and contingencies
Stockholders' equity
    Preferred stock, $.001 par value,
       1,000,000 authorized; none
       outstanding .......................         --            --
    Common stock, $.001 par value,
       25,000,000 authorized; 7,171,000
       outstanding and capital in excess
       of par value ......................     90,356        90,625
    Treasury stock, 1,106,000 and 597,000
       shares, at cost ...................    (12,048)       (6,867)
    Accumulated deficit ..................    (19,890)      (18,844)
    Accumulated other comprehensive income         91           294
                                             --------      --------
       Total stockholders' equity ........     58,509        65,208
                                             --------      --------
                                             $ 77,665      $ 95,977
                                             ========      ========

     Note:  The  balance  sheet at October 31,  1998 has been  derived  from the
audited  financial  statements  at that  date but does  not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. See accompanying notes.


<PAGE>



Centigram Communications Corporation
Condensed Consolidated Statements of Operations  (Unaudited)

                                   Quarter Ended         Nine Months Ended
                               ---------------------   ---------------------
(In thousands, except           July 31,   August 1,    July 31,   August 1,
    per share data)              1999         1998       1999        1998
----------------------------   ---------   ---------   ---------   ---------
Net revenue ................   $ 21,016    $ 18,143    $ 62,084    $ 57,503
Cost and expenses:
    Costs of goods sold ....      9,106       8,837      26,808      28,061
    Research and development      3,914       4,056      12,256      14,143
    Selling, general and
       administrative ......      8,646       9,826      25,596      31,648
    Non-recurring charges ..         --      10,600          --      10,600
                               --------    --------    --------    --------
    Total costs and expenses     21,666      33,319      64,660      84,452
                               --------    --------    --------    --------
Operating loss .............       (650)    (15,176)     (2,576)    (26,949)
Other income, net ..........        585      15,074       1,845      16,403
                               --------    --------    --------    --------
Loss before income taxes ...        (65)       (102)       (731)    (10,546)
Provision for income taxes .        110         164         315         304
                               --------    --------    --------    --------
Net loss ...................   $   (175)   $   (266)   $ (1,046)   $(10,850)
                               ========    ========    ========    ========

Basic and diluted earnings
   loss per share ..........   $  (0.03)   $  (0.04)   $  (0.17)   $  (1.56)
                               ========    ========    ========    ========

Shares used for basic and
   diluted loss per share ..      6,071       6,885       6,325       6,966
                               ========    ========    ========    ========

    See accompanying notes.




<PAGE>



Centigram Communications Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)

                                                            Nine Months Ended
                                                       -------------------------
                                                        July 31,       August 1,
(In thousands)                                            1999           1998
--------------------------------------------------     -----------    ----------
Cash and equivalents, beginning of period ........      $ 23,430       $ 19,791
                                                       -----------    ----------

Cash flows from operations:
    Net loss .....................................        (1,046)       (10,850)
    Write-off of purchased in-process
       technology ................................            --          5,000
    Gain on sale of CPE business unit ............            --        (14,302)
    Depreciation and amortization ................         4,316          5,591
    Trade receivables ............................        (2,236)         2,003
    Inventories ..................................         3,003            666
    Other assets .................................           478           (977)
    Accounts payable .............................        (1,914)        (2,135)
    Accrued expenses and other
       liabilities ...............................        (9,699)         5,306
                                                       -----------    ----------
                                                          (7,098)        (9,698)
                                                       -----------    ----------
Cash flows from investing:
    Purchase of short-term investments ...........       (55,922)       (35,088)
    Proceeds from sale and maturities
       of short-term investments .................        55,039         31,310
    Proceeds from the sale of CPE
       business unit .............................            --         26,849
    Purchase of property and equipment ...........        (1,541)        (1,817)
    Acquisition of TTC ...........................            --        (11,558)
                                                       -----------    ----------
                                                          (2,424)         9,696
                                                       -----------    ----------
Cash flows from financing:
    Proceeds from sale of common stock ...........           760          3,267
    Principal payments on capital leases .........            --            (78)
    Acquisition of treasury stock ................        (6,210)        (7,020)
                                                       -----------    ----------
                                                          (5,450)        (3,831)
                                                       -----------    ----------
Net change in cash and equivalents ...............       (14,972)        (3,833)
                                                       ===========    ==========
Cash and equivalents, end of period ..............      $  8,458       $ 15,958
                                                       ===========    ==========

See accompanying notes.





<PAGE>


Centigram Communications Corporation
Notes to Condensed Consolidated Financial Statements (Unaudited)


Basis of Presentation

     The  accompanying  condensed  consolidated  financial  statements have been
prepared by the Company without audit and reflect all adjustments (consisting of
normal recurring adjustments) which are, in the opinion of management, necessary
to reflect a fair statement of the results for the interim periods.  For further
information,   refer  to  the  audited  Consolidated  Financial  Statements  and
footnotes  included in the  Company's  Annual Report on Form 10-K for the fiscal
year ended October 31, 1998.  The results of  operations  for the three and nine
month  periods  ended July 31, 1999 may not  necessarily  be  indicative  of the
results for the fiscal year ending October 30, 1999 or any future period.

Inventories

     Inventories consisted of:
                                                     July 31,        October 31,
     (In thousands)                                    1999             1998
      ------------------------------------------    ----------        ----------
      Raw materials ............................     $  255             $1,198
      Work-in-process ..........................      1,352              1,793
      Finished goods ...........................        687              2,306
                                                    ==========        ==========
                                                     $2,294             $5,297
                                                    ==========        ==========

Loss Per Share

     Basic and diluted per share amounts are computed using the weighted average
number of common shares outstanding during the periods. In computing diluted per
share amounts in periods with income,  the dilutive effect of stock options were
also included in the per share  computations.  Options to purchase  common stock
were outstanding during the three and nine-month periods ended July 31, 1999 and
August 1, 1998,  but were excluded from the  computation of diluted net loss per
share because the effect in these periods would have been anti-dilutive.

     The details of these computations are as follows:


                                          Quarter Ended       Nine Months Ended
                                      --------------------  --------------------
(In thousands, except                  July 31,  August 1,   July 31,  August 1,
    per share data)                      1999      1998        1999      1998
-----------------------------------   --------   ---------  ---------  ---------
Net loss ..........................   $ (175)     $ (266)    $(1,046)  $(10,850)
                                      ========   =========  =========  =========

Weighted average shares
    outstanding ...................    6,071       6,885       6,325      6,966
Effect of dilutive securities:
    Shares issued upon exercise
    of dilutive outstanding
    options ...........                   --          --          --         --
                                     ========   =========   =========  =========
Adjusted weighted average shares ..    6,071       6,885       6,325      6,966
                                     ========   =========   =========  =========

Basic loss per share ..............   $ (0.03    $ (0.04)   $ (0.17)   $  (1.56)
                                     ========   =========   =========  =========
Diluted loss per share ............   $ (0.03)   $ (0.04)   $ (0.17)   $  (1.56)
                                     ========   =========   =========  =========



<PAGE>


Comprehensive Income (Loss)

     As of November 1, 1998,  the Company  adopted the  Statement  on  Financial
Accounting Standards No. 130 (SFAS 130), "Reporting  Comprehensive Income." SFAS
130 establishes new rules for the reporting and display of comprehensive  income
and its  components;  however  adoption of this  Statement  had no impact on the
Company's net income or shareholders' equity. SFAS 130 requires unrealized gains
or losses on the Company's  available-for-sale  securities and foreign  currency
translation  adjustments to be included in other comprehensive  income. Prior to
adoption,  unrealized  gains or losses related to foreign  currency  translation
adjustments were reported as a separate component of shareholders' equity.

     The following are the components of comprehensive income (loss):

                                    Quarter Ended         Nine Months Ended
                               ---------------------   ----------------------
                               July 31,    August 1,    July 31,   August 1,
(In thousands)                    1999       1998         1999       1998
----------------------------   ---------   ---------   ---------   ----------
Net loss ...................   $   (175)   $   (266)   $ (1,046)   $(10,850)
Unrealized gain (loss) on
     investments ...........        (49)        128        (142)        263
Foreign currency translation
     adjustment ............          5         (49)        (61)         25
                               ========    ========    =========    ==========
                               $   (219)   $   (187)   $ (1,249)   $(10,612)
                               ========    ========    =========    ==========

     The following are the components of accumulated other comprehensive income,
net of related tax:

                                             July 31,      October 31,
(In thousands)                                 1999           1998
---------------------------------------     ----------     ----------
Unrealized gain on investments ........       $ 200          $ 342
Foreign currency translation adjustment        (109)           (48)
                                            ==========     ==========
                                              $  91          $ 294
                                            ==========     ==========

Pro Forma Information

     In June 1998, the Company purchased  substantially all of the assets of The
Telephone  Connection,  Inc. ("TTC Acquisition") for approximately $11.6 million
in cash,  including  transaction costs of $0.4 million. The acquisition has been
accounted for using the purchase method of accounting.

     In May  1998,  the  Company  licensed  and sold  certain  Customer  Premise
Equipment  business unit assets to Mitel  Corporation ("the CPE Sale") for $26.8
million in cash, and Mitel assumed certain of the Company's liabilities.

     The  following  pro  forma  summary  represents  the  combined  results  of
operations of the Company,  plus the purchase of substantially all of the assets
of TTC as adjusted to reflect the amortization of tangible and intangible assets
acquired in the purchase,  less the CPE Sale,  as if each of these  transactions
had occurred at the  beginning of fiscal 1998.  This summary does not purport to
be indicative of what operating  results would have been had these  transactions
been made as of the beginning of fiscal 1998 nor are they necessarily indicative
of future operating results.

                                         Nine Months Ended
                                   ------------------------------
(In thousands, except              July 31, 1999   August 1, 1998
    per share data)                                 (Pro Forma)
--------------------------------    ------------   --------------
Net revenue ....................     $ 62,084        $ 46,606
Loss before income taxes .......     $   (731)       $(22,368)
Net loss .......................     $ (1,046)       $(22,672)
Basic and diluted loss per share     $  (0.17)       $  (3.25)

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

     The following  discussion  contains  forward-looking  statements  regarding
future  events or the future  financial  performance  of Centigram  that involve
risks  and  uncertainties.  These  statements  include  but are not  limited  to
statements  related to changes  in  Centigram's  research  and  development  and
selling,  general and administrative  expenses,  Centigram's effective tax rate,
Centigram's   expenditures  for  capital  equipment,   and  the  sufficiency  of
Centigram's  cash reserves.  Actual results could differ  materially  from those
anticipated in these forward-looking  statements as a result of certain factors,
including  those set  forth in this  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations  under  "Certain  Trends  and
Uncertainties," and elsewhere herein.

     Centigram   designs,   manufactures   and  markets  wireless  and  wireline
messaging,  enhanced services and communication systems that integrate voice and
facsimile  on the  Company's  communications  server and provide  access to this
multimedia information through a telephone or a PC. Centigram's applications all
operate on common  hardware and software  platforms  based on  industry-standard
hardware  and  software  which is the  Company's  implementation  of its Modular
Expandable System Architecture (MESA). Centigram's system architecture enables a
user generally to expand the capacity of a system in  cost-effective  increments
from the Company's smallest to its largest system configuration.

     Centigram's  systems can be integrated with wireline and wireless  switches
and paging terminal systems. Such systems are used for switching telephone calls
and integrating  voice and facsimile  messaging in a variety of service provider
environments.  In addition,  Centigram systems located at different sites can be
linked together in a digital network.


<PAGE>



Pro Forma Combined Condensed Statements of Operations

     In June 1998, the Company purchased  substantially all of the assets of The
Telephone  Connection,  Inc. ("TTC Acquisition") for approximately $11.6 million
in cash,  including  transaction costs of $0.4 million. The acquisition has been
accounted for using the purchase method of accounting.

     In May  1998,  the  Company  licensed  and sold  certain  Customer  Premise
Equipment  business unit assets to Mitel  Corporation (the "CPE Sale") for $26.8
million in cash, and Mitel assumed certain of the Company's liabilities.

     The following pro forma  statements and the discussion of pro forma results
herein  represent the combined  results of  operations of the Company,  plus the
purchase  of  substantially  all of the assets of TTC as adjusted to reflect the
amortization of tangible and intangible  assets  acquired in the purchase,  less
the CPE Sale, as if each of these  transactions had occurred at the beginning of
fiscal 1998.  This summary does not purport to be indicative  of what  operating
results would have been had these  transactions been made as of the beginning of
fiscal 1998 nor are they necessarily indicative of future operating results.

                                        Quarter Ended         Nine Months Ended
                                    ----------------------   -------------------
                                     July 31,   August 1,    July 31, August 1,
(In thousands, except per share        1999       1998        1999      1998
    data)                                      (Pro Forma)           (Pro Forma)
---------------------------------   ---------   ---------   --------- ----------
Net revenue .....................   $ 21,016    $ 18,266    $ 62,084   $ 46,606
Cost and expenses:
    Costs of goods sold .........      9,106       9,024      26,808     23,520
    Research and development ....      3,914       4,371      12,256     13,676
    Selling, general and
       administrative ...........      8,646      10,024      25,596     28,313
    Non-recurring charges .......         --       5,600          --      5,600
                                    ---------   ---------   --------- ----------
       Total costs and expenses .     21,666      29,019      64,660     71,109
                                    ---------   ---------   --------- ----------
Operating loss ..................       (650)    (10,753)     (2,576)   (24,503)
Other income, net ...............        585         779       1,845      2,135
                                    ---------   ---------   --------- ----------
Loss before income taxes ........        (65)     (9,974)       (731)   (22,368)
Provision for income taxes ......        110         164         315        304
                                    ---------   ---------   --------- ----------
Net loss ........................   $   (175)   $(10,138)   $ (1,046)  $(22,672)
                                    =========   =========   ========= ==========

Basic and diluted loss per
     share ......................   $  (0.03)   $  (1.47)   $  (0.17)  $  (3.25)
                                    =========   =========   ========= ==========

Shares used for basic and diluted
    loss per share ..............      6,071       6,885       6,325      6,966
                                    =========   =========   ========= ==========




<PAGE>



Results of Operations

     Net revenue was $21.0  million and $62.1  million for the third quarter and
nine  months  of fiscal  1999,  and was 16% and 8%  higher  than the  comparable
periods in fiscal 1998.  The  increase in net revenue for the third  quarter and
nine months of 1999 as compared to the similar  periods in 1998 reflects  higher
sales  of large  system  expansion  products  offset  in part by lower  sales of
smaller system  products.  The decrease in sales of smaller system products from
the  prior  year was  primarily  due to the CPE  Sale.  Sales  to  international
customers  were 38% and 40% of revenues for the third quarter and nine months of
1999 as compared to 46% and 47% in the similar  periods of 1998.  This year over
year decrease in the percentage of  international  sales to total sales resulted
from flat year over year international  revenue and increased growth in domestic
revenues.

     On a pro forma basis,  net revenue was $21.0  million and $62.1 million for
the third  quarter  and nine  months of 1999 and was 15% and 33% higher than the
comparable  periods  in fiscal  1998.  This  increase  in pro forma net  revenue
reflects higher sales of large system expansion products to domestic customers.

     Gross margin was 56.7% and 51.3% of net revenue for the third  quarters and
56.8% and 51.2% for the nine  months of 1999 and 1998,  respectively.  This year
over year  increase of 5.4% and 5.6% for the third quarter and nine months ended
July 31, 1999, respectively,  reflects a favorable mix of increased sales of the
Company's  large system  expansion  products  which  typically have higher gross
margins  as  compared  to  smaller  system  products.  See  "Certain  Trends and
Uncertainties."

     On a pro  forma  basis,  gross  margin  was  56.7%  and 50.6% for the third
quarter and 56.8% and 49.5% for the nine months of 1999 and 1998,  respectively.
These  increases in year over year pro forma gross margins  reflect  essentially
the same factors as noted above.

     Research  and  development  ("R&D")  expenses  were $3.9  million and $12.3
million for the third  quarter and nine  months of 1999,  decreasing  4% and 13%
from the  corresponding  periods of 1998.  R&D expenses as a  percentage  of net
revenue  were  19% and 22% for the  third  quarter  and 20% and 25% for the nine
months of 1999 and 1998, respectively.  These reductions in R&D expenses reflect
lower R&D staffing levels and related costs and outside  services due to the CPE
Sale  offset,  in  part,  by the  increased  R&D  expenses  related  to the  TTC
Acquisition.  The Company believes that ongoing  development of new products and
features  is required to maintain  and  enhance  its  competitive  position  and
accordingly, the Company expects to continue to invest in R&D.

     On a pro forma basis,  R&D expenses  decreased 10% in the third quarter and
nine  months of 1999 as  compared  to 1998.  These  reductions  in pro forma R&D
spending reflect lower R&D staffing levels and related costs.

     Selling, general and administrative ("SG&A") expenses were $8.6 million and
$25.6 million for the third quarter and nine months of 1999,  decreasing 12% and
19% from the  corresponding  periods of 1998. These decreases  reflect primarily
reduced sales,  marketing and customer support expenses,  including decreases in
salary  expenses and related  costs due to the CPE Sale and other  reductions in
average headcount offset, in part, by the increased SG&A expenses related to the
TTC  Acquisition.  SG&A expenses as a percentage of net revenue were 41% and 54%
for the  third  quarter  and 41% and 55% for the nine  months  of 1999 and 1998,
respectively.

     On a pro forma  basis,  SG&A  expenses  decreased  14% and 10% in the third
quarter and nine months of 1999 as compared  to 1998.  These  decreases  reflect
reduced sales and support expenses due to reduced headcount and related costs.

     Non-recurring  charges  were zero and $10.6  million for the three and nine
month  periods  of 1999 and 1998,  respectively.  For 1998  these  non-recurring
charges  consisted  of $5.0 million for the  write-off  of purchased  in-process
technology  from  the  TTC  Acquisition  as  this  technology  had  not  reached
technological feasibility and had no alternative use and $5.6 million associated
with the Company's patent dispute with Lucent Technologies.

     Other income,  net was $0.6 million and $15.1 million for the third quarter
and $1.8  million  and  $16.4  million  for the nine  months  of 1999 and  1998,
respectively.  Excluding  the $14.3  million gain on the sale of the CPE Sale in
the third  quarter  and nine months of 1998,  other  income net  decreased  $0.2
million  and $0.3  million  in the  third  quarter  and nine  months  of 1999 as
compared to 1998.  This decrease in other income,  net reflects  lower  interest
income due to lower average invested balances in 1999 versus 1998.

     The Company recorded a provision for income taxes for the third quarter and
nine  months  of  fiscal  1999 and  1998  for  anticipated  foreign  income  tax
liabilities.  No income tax benefits  were  recorded for the losses  incurred in
fiscal years 1999 and 1998 because realization of the deferred tax asset arising
as a result of the losses sustained is dependent upon future taxable income, the
amount and timing of which are uncertain. Accordingly, a valuation allowance has
been  established  to fully  offset the deferred tax asset other than that which
represents potentially refundable taxes.

Liquidity and Capital Resources

     Cash and cash equivalents and short-term  investments at July 31, 1999 were
$43.0  million,  decreasing  $14.2  million  from the year end  balance of $57.2
million.  In October  1998 the  Company  settled a patent  dispute  with  Lucent
Technologies  Inc.  ("Lucent")  with an  intellectual  property  cross-licensing
agreement and in November 1998 paid Lucent $9.2 million.

     For the  first  nine  months  ended  July 31,  1999  the net cash  used for
operating activities was $7.1 million.  Trade receivables increased $2.2 million
from the year-end balance and days sales  outstanding  (computed using quarterly
revenues) were 72 days in the third quarter as compared to 65 days at the end of
fiscal  1998.  This  increase in trade  receivables  and days sales  outstanding
resulted primarily from a larger percentage of quarterly  shipments occurring in
the last month of the third  quarter as  compared to the last month in the prior
year and  delayed  payments  from  certain  international  customers.  Inventory
balances at July 31, 1999 were $3.0 million  lower than year-end due to improved
management of the  Company's  inventory  stocking  levels.  The Company  expects
investments  in  receivables  and  inventories  will  continue  to  represent  a
significant portion of working capital.

     During the nine  months  ended July 31,  1999,  the  Company  made  capital
expenditures  of  approximately  $1.5  million.   These  expenditures  consisted
primarily of purchases of computer  equipment,  software,  and  engineering  lab
equipment. The Company currently expects to spend approximately $2.0 million for
capital  equipment during fiscal 1999,  although actual  expenditures may differ
from this forecast. In addition, the Company's Board of Directors has authorized
a stock repurchase  program whereby up to 2.5 million shares of its Common Stock
may be repurchased  in the open market from time to time.  During the first nine
months of fiscal 1999 the Company  purchased  approximately  600,000 shares at a
total  cost  of  $6.2  million.  The  Company  has  purchased  an  aggregate  of
approximately  1.5  million  shares  under  this  program  at a  total  cost  of
approximately  $17.0  million.  The  Company  may, at its  discretion,  purchase
additional shares under this program during the next twelve months.  The Company
presently believes,  notwithstanding its accumulated deficit,  that its existing
cash and  short-term  investments  will be  sufficient  to support the Company's
working capital,  capital equipment purchase requirements,  and stock repurchase
program for the next twelve months.

     The Company's  principal sources of liquidity as of July 31, 1999 consisted
of $43.0 million of cash and cash  equivalents and short-term  investments.  The
Company elected not to renew its $15.0 million bank line of credit which expired
in May 1999.

Certain Trends and Uncertainties

     The  Company  has in the past  experienced  and will  likely in the  future
experience substantial  fluctuations in quarterly operating results. The Company
generally  has  no  long-term  order  commitments  from  its  customers,  and  a
significant  portion of bookings and shipments in any quarter have  historically
occurred near the end of the quarter.  Accordingly, the Company has historically
operated  with very  little  backlog,  and net  revenue  has been  difficult  to
predict.  In  addition,  the portion of backlog  shippable  in the next  quarter
varies over time. As a result, revenue in future quarters will depend largely on
the level of orders received during such quarters.

     If new  order  bookings  do not meet  expected  levels,  or if the  Company
experiences delays in shipments at the end of a quarter,  operating results will
be adversely  affected,  and these  developments  may not become apparent to the
Company until near or at the end of a quarter.  Net revenue can also be affected
by product sales mix,  distribution  mix, the size and timing of customer orders
and shipments,  customer  returns and reserves  provided  therefor,  competitive
pricing pressures, the effectiveness of key distributors and the Company's sales
force in  selling  the  Company's  products,  changes in  distributor  inventory
levels,  the ability of the Company's joint marketing  partners to ship products
during the quarter,  the timing of new product  introductions by the Company and
its competitors,  regulatory  approvals,  and the availability of components for
the Company's products,  each of which is difficult to predict accurately.  Each
of such factors has in the past affected the Company's revenue.  The Company has
in the past  experienced  higher than usual headcount  turnover which has had an
adverse effect on the Company's  booking levels.  There can be no assurance that
such turnover will not continue in future periods. Any failure by the Company to
attract,  retain and train  additional  sales and other  personnel  could have a
material adverse effect on the Company's business and results of operations.

     A significant  portion of the Company's  net revenue is  attributable  to a
limited number of customers.  The Company's top five  customers,  representing a
combination  of  major  distributors  and  service   providers,   accounted  for
approximately  45% and 31% of the  Company's net revenue in the first nine month
periods of fiscal  1999 and 1998,  respectively,  although  the  Company's  five
largest  customers  were not the same in the two  periods.  The  Company  has no
long-term order commitments from any of its customers. Any material reduction in
orders from one or more of such customers or the cancellation or deferral of any
significant  portion of backlog could have an adverse  effect on net revenue and
operating   results.   Such  concentration  of  sales  typically  results  in  a
corresponding  concentration  of accounts  receivable.  Although the Company has
established  reserves for  uncollectible  accounts,  the  inability of any large
customer  to pay the  Company on a timely  basis  could have a material  adverse
impact on the  Company's  financial  position,  results of  operations  and cash
flows.

     Approximately  38% and 40% of the Company's  sales in the third quarter and
nine months ended July 31, 1999 consisted of sales outside of the United States.
The Company's  international  sales are subject to a number of additional  risks
generally  associated with international  sales,  including the effect on demand
for the  Company's  products  in  international  markets  as the  results of any
strengthening  or  weakening  of  the  U.S.  dollar,   the  effect  of  currency
fluctuations  on consolidated  multinational  financial  results,  state imposed
restrictions  on the  repatriation  of  funds,  import  and  export  duties  and
restrictions,  the need to modify  products for local  markets,  and the logical
difficulties of managing multinational operations. In particular,  the Company's
sales in Asia and Latin American have been adversely affected in recent quarters
by financial  difficulties in these regions and may be so adversely  affected in
the future.

     The  Company's  gross  margin  can be  affected  by a  number  of  factors,
including  changes in product  configuration and mix including the volume of OEM
products,  distribution channel and customer mix, cost and availability of parts
and  components,   royalty   obligations  to  suppliers  of  licensed  software,
provisions for warranty,  retrofits, and excess and obsolete inventory, customer
returns,  and  competitive  pressures  on pricing.  The Company has  experienced
increasing  competitive pricing pressure in its markets and expects this pricing
pressure to continue. Further,  distributors purchase products at discounts, and
the Company's  margins can therefore  vary depending upon the mix of distributor
and direct end user sales in any  particular  fiscal  period.  While the Company
anticipates that its sales mix will continue to fluctuate in future periods, the
Company  anticipates  selling an increasing  percentage of sales through  direct
sales rather than through distribution.

     The  Company's  future  success will depend in part upon the ability of the
Company to continue to introduce  new  features  and  products as the  Company's
markets  evolve,  new  technologies  become  available,   and  customers  demand
additional   functionality.   The   Company's   competitors   continue   to  add
functionality to their products,  and any failure by the Company to introduce in
a timely manner new products and features that meet customer  requirements would
adversely affect the Company's  operating  results and cash flows. The Company's
ability to develop such new features  and products  depends in large  measure on
its  ability  to  hire  and  retain  qualified   technical  talent  and  outside
contractors in highly  competitive  markets for such  services.  There can be no
assurance that the Company's product development efforts will be successful,  or
that it will be able to introduce new products in a timely manner.  Any material
additional  delays in the  introduction  and market  acceptance of such products
would be adverse to the Company's business. Moreover, customers' expectations of
the introduction of new products by the Company or its competitors can adversely
affect sales of current  products.  In addition,  upon the  introduction  of new
products,  the Company could be subject to higher customer  returns with respect
to prior  generations of products,  which could  adversely  affect the Company's
financial position, operating results and cash flows.

     The Company  presently uses third parties to perform  printed circuit board
and subsystem  assembly.  In addition,  although the Company has not experienced
significant problems with third-party manufacturers in the past, there can be no
assurance  that such  problems  will not  develop in the  future.  Although  the
Company  generally uses standard parts and components for its products,  certain
microprocessors,  line cards,  application cards and other semiconductor devices
and  other  components  are  available  from  sole  sources.  Other  components,
including power supplies,  disk drives,  certain other semiconductor devices and
subcontracted line card assemblies,  are presently  available or acquired from a
single  source  or from  limited  sources.  The  Company  has been  notified  by
suppliers that certain  components will no longer be manufactured.  To date, the
Company  has been able to obtain  adequate  supplies  of these  components  in a
timely manner from existing sources or, when necessary, from alternative sources
of supply  although such  alternatives  have resulted in increased  costs to the
Company.  However,  the inability to develop such alternative  sources if and as
required in the future,  to obtain  sufficient sole or limited source components
as  required,  or to locate  alternatives  to  discontinued  parts  would have a
material  adverse affect on the Company's  operating  results and cash flows. In
addition,  the Company's  products are  dependent on the QNX software  operating
system,    a    multitasking,    real-time    operating    system    for   Intel
microprocessor-based  computers.  In future periods,  the Company's products may
become  increasingly  dependent on software licensed from third party suppliers.
There can be no assurance  such  licenses  will  continue to be available to the
Company as needed or at commercially reasonable prices.

     In addition,  a number of other  companies,  including  competitors  of the
Company,  hold patents in the same general  area as the  technology  used by the
Company.  The  Company  from time to time has  received,  and may receive in the
future,  letters  alleging  infringement  of  patent  rights  by  the  Company's
products. For example, in December 1997,  representatives of Lucent informed the
Company that they believed that the Company's products may infringe upon certain
patents issued to Lucent, and that Lucent was seeking  compensation for any past
infringement by the Company. The Company evaluated the assertions of Lucent, and
in  October  1998  settled  with  Lucent by  signing  an  intellectual  property
cross-licensing  agreement and in November 1998 paid Lucent $9.2 million.  Third
party companies alleging  infringement could seek an injunction  prohibiting the
Company from selling some or all of its products, which would have an immediate,
adverse  impact in the Company's  business,  financial  condition and results of
operations.  There can be no  assurance  that the Company  would  prevail in any
litigation  to enjoin the Company from selling its products on the basis of such
alleged infringement, or that the Company would be able to license any valid and
infringed patents on reasonable terms, or at all.

     Like many other  companies,  the year 2000 computer issue creates risks for
Centigram.  If internal  systems do not  correctly  recognize  and process  date
information  beyond  the year  1999,  there  could be an  adverse  impact on the
Company's operations. To address the year 2000 issues with its internal systems,
the Company has initiated a comprehensive program which is designed to deal with
the most critical  systems first.  Assessment and  remediation are proceeding in
tandem and changes to critical  systems have been  completed  and tested.  These
activities  are intended to encompass all major  categories of systems in use by
the Company,  including  manufacturing,  sales,  customer  service,  finance and
administration.  The Company is also actively working with critical suppliers of
products  and  services to  determine  that the  suppliers'  operations  and the
products  and services  they  provide are year 2000 capable or to monitor  their
progress toward year 2000 capability. In addition, the Company is completing its
draft contingency plan which should be completed in the Company's fourth quarter
to address  potential problem areas with internal systems and with suppliers and
other third parties.

     In the event the  Company  fails to  anticipate  the degree of  disruptions
caused by Year 2000 problems in its  contingency  plans,  the Company's  systems
could be affected in some or all of the following  respects:  disruptions  of an
extended period (i.e., in excess of one week) in the economic  infrastructure of
the regions in which the Company does business,  including power,  communication
and  transportation  system  disruptions,  could materially affect the Company's
ability to deliver  systems as scheduled or to provide in a timely  manner spare
parts or  warranty  support for such  systems;  and  disruptions  of an extended
period  (i.e.,  generally  in excess of 30 days)  could  materially  affect  the
Company's  inventory supply of parts for system  manufacture and delay scheduled
systems to our customers.  The Company's  contingency  plans, when completed and
implemented by the Company, are intended to ensure that temporary disruptions to
its  infrastructure  systems  will  have no  materially  adverse  effect  on the
Company's operations and financial performance. However, extended disruptions in
these  systems  beyond the  Company's  control  or  ability  to remedy,  such as
described  above,  could impact the  Company's  ability to deliver  products and
services to customers on schedule and to maintain Company operations and provide
appropriate  employee  support  (including  payroll  and  benefits)  and  would,
thereby,   potentially  have  a  materially  adverse  effect  on  the  Company's
operations and financial performance.

     The Company also has a program to assess the  capability of its products to
handle the year 2000.  The  Company  believes  that its  products  are Year 2000
Capable,  although  there can be no assurance of this.  The Company is incurring
various costs to provide  customer  support and customer  satisfaction  services
regarding year 2000 issues,  and it is anticipated that these  expenditures will
continue through 1999 and thereafter. As used by Centigram,  "Year 2000 Capable"
means that when used  properly and in  conformity  with the product  information
provided by Centigram,  the Centigram  product will accurately  store,  display,
process,  provide, and/or receive data from, into, and between the twentieth and
twenty-first  centuries,  including  leap year  calculations,  provided that all
other  technology  used in  combination  with  the  Centigram  product  properly
exchanges date data with the Centigram product.

     The costs  incurred to date  related to these  programs  are  approximately
$500,000 and include both  incremental  spending and redeployed  resources.  The
total costs of these programs should not exceed $600,000,  although there can be
no assurance of this. The total cost estimate does not include  potential  costs
related to any  customer or other  claims or the cost of internal  software  and
hardware  replaced in the normal  course of  business.  In some  instances,  the
installation  schedule of new  software  and  hardware  in the normal  course of
business is being  accelerated to also afford a solution to year 2000 capability
issues.  The total  cost  estimate  is based on the  current  assessment  of the
projects and is subject to change as the projects progress.

     Based on currently available information,  management does not believe that
the year 2000 matters  discussed  above related to internal  systems or products
sold to customers will have a material adverse impact on the Company's financial
condition or overall trends in results of operations;  however,  it is uncertain
to what extent the Company may be affected by such matters.  In addition,  there
can be no  assurance  that the  failure  to  ensure  year 2000  capability  by a
supplier or another third party would not have a material  adverse effect on the
Company.

     In April 1998 the Company  entered into an Agreement  for Purchase and Sale
of Assets  with  Mitel,  Inc.  and  Mitel  Corporation  (collectively,  "Mitel")
providing for the purchase by Mitel of the Company's customer premises equipment
("CPE") business.  Pursuant to this agreement, the Company has agreed, until May
of 2001, not to compete with Mitel in the CPE business. As a result, the Company
is unable to sell its  equipment  or services to certain  customers  which could
adversely  affect the  company's  business,  financial  condition and results of
operations.

     The Company sells its  MobileManager  product which adds call management to
the  message  and  information  management  services  provided  on the  Series 6
platform under a 1995 joint marketing  arrangement with Priority Call Management
("PCM"). In May 1999 this agreement was terminated. The Company has negotiated a
follow on agreement  with PCM which,  under  certain  circumstances,  allows the
Company to sell PCM products and services  through November 1999. As a result of
these developments,  the Company's business, financial condition, and results of
operations  may be adversely  affected in the fourth  quarter of fiscal 1999 and
thereafter.  MobileManager  revenues  were  approximately  $4.0 million and $5.8
million for the first nine months of fiscal 1999 and fiscal 1998, respectively.

     In recent years,  stock markets have  experienced  extreme price and volume
trading  volatility.  This volatility has had a substantial effect on the market
prices of securities of many high  technology  companies for reasons  frequently
unrelated to the operating  performance of the specific  companies.  These broad
markets  fluctuations  may  adversely  affect the market price of the  Company's
common stock. In addition, the trading price of the Company's common stock could
be subject to wide fluctuations in response to quarter-to-quarter  variations in
operating results, announcements of new products or technological innovations by
the Company or its  competitors,  and general  conditions  in the  computer  and
communications industries.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     Quantitative and qualitative information about market risk was addressed in
Item 7A of the  Company's  Form 10-K for the fiscal year ended October 31, 1998.
There has been no material change to that  information  required to be disclosed
in this Form 10-Q filing.


PART II - OTHER INFORMATION
Item 6.    Exhibits and Reports on Form 8-K

           (a)    Exhibits.
                  27.1 Financial Data Schedule.



<PAGE>



                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                          CENTIGRAM COMMUNICATIONS CORPORATION
                                                     (Registrant)




Date: September 2, 1999                By:  /s/ Robert L. Puette
                                           -------------------------------------
                                           Robert L. Puette
                                           President and Chief Executive Officer


Date: September 2, 1999                By: /s/ Thomas E. Brunton
                                           -------------------------------------
                                           Thomas E. Brunton
                                           Sr. Vice President and
                                             Chief Financial Officer