<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


(Mark One)

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

         For the quarterly period ended JUNE 30, 2000

                                       OR

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

         For the transition period from          to         .
                                       ----------  ---------


                        Commission File Number: 000-24193


                          ATLANTIC DATA SERVICES, INC.
             (Exact Name of Registrant as Specified in its Charter)


                   MASSACHUSETTS                               04-2696393
          (State or Other Jurisdiction of                   (I.R.S. Employer
          Incorporation or Organization)                 Identification Number)


                              ONE BATTERYMARCH PARK
                           QUINCY, MASSACHUSETTS 02169
               (Address of Principal Executive Offices) (Zip Code)

                                (617) 770 - 3333
              (Registrant's Telephone Number, Including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]   No [ ]
                                       ---      ---

As of July 28, 2000, there were 12,986,599 shares of the Registrant's Common
Stock, $.01 par value per share, outstanding.


<PAGE>   2
                          ATLANTIC DATA SERVICES, INC.

                                TABLE OF CONTENTS


                                                                            Page

PART I - FINANCIAL INFORMATION

ITEM 1:    Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2000 (Unaudited)
  and March 31, 2000                                                          3

Condensed Consolidated Statement of Operations for the Three Months
  Ended June 30, 2000 and 1999 (Unaudited)                                    4

Condensed Consolidated Statement of Cash Flows for the Three Months
 Ended June 30, 2000 and 1999 (Unaudited)                                     5

Notes to Condensed Consolidated Financial Statements                          6

ITEM 2:    Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                              8

ITEM 3:    Quantitative and Qualitative Disclosures about Market Risk        12


PART II - OTHER INFORMATION

ITEM 2:    Changes in Securities and Use of Proceeds                         13

ITEM 6:    Exhibits and Reports on Form 8-K                                  14

SIGNATURES                                                                   15

EXHIBIT INDEX                                                                16



                                       2
<PAGE>   3


                                     PART I

ITEM 1:  FINANCIAL INFORMATION


                          ATLANTIC DATA SERVICES, INC.
                      Condensed Consolidated Balance Sheets
                      (in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                        JUNE 30,    MARCH 31,
                                                                          2000        2000
                                                                      -----------   ---------
                                                                      (Unaudited)
<S>                                                                     <C>         <C>
ASSETS
Current assets:
     Cash and cash equivalents                                          $ 36,572    $ 38,347
     Accounts receivable, net of allowances for doubtful accounts of
      $620 at June 30, 2000 and $650 at March 31, 2000                     6,322       5,514
     Prepaid expenses                                                        212         103
     Deferred taxes                                                          732         845
                                                                        --------    --------
         Total current assets                                             43,838      44,809
     Property and equipment, net                                             846         919
     Other assets                                                            357         387
                                                                        --------    --------
TOTAL ASSETS                                                            $ 45,041    $ 46,115
                                                                        ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                   $    751    $    757
     Accrued expenses and other liabilities                                2,625       3,997
     Billings in excess of costs and estimated earnings                       --          42
     Income taxes payable                                                    348         343
                                                                        --------    --------
         Total current liabilities                                         3,724       5,139
                                                                        --------    --------

Commitments

Stockholders' equity:
     Preferred stock, $.01 par value, 1,000,000 authorized, no shares
       issued or outstanding                                                  --          --
     Common stock, $.01 par value, 60,000,000 shares authorized,
       13,097,599 shares issued and 12,985,599 outstanding at
       June 30, 2000 and 13,087,599 shares issued and
       12,975,599 outstanding at March 31, 2000                              131         131
     Additional paid-in capital                                           26,788      26,737
     Retained earnings                                                    14,423      14,133
     Treasury stock (112,000 shares carried at cost)                         (25)        (25)
                                                                        --------    --------
         Total stockholders' equity                                       41,317      40,976
                                                                        --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $ 45,041    $ 46,115
                                                                        ========    ========
</TABLE>


See accompanying Notes to Condensed Consolidated Financial Statements.



                                       3
<PAGE>   4

                          ATLANTIC DATA SERVICES, INC.

                 Condensed Consolidated Statement of Operations
                      (in thousands, except per share data)
                                   (Unaudited)


                                                         THREE MONTHS ENDED
                                                              JUNE 30,
                                                         ------------------
                                                           2000       1999
                                                         -------    -------

Revenues                                                 $ 9,527    $10,251
Cost of revenues                                           6,692      7,580
                                                         -------    -------
Gross profit                                               2,835      2,671
                                                         -------    -------
Operating expenses:
     Sales and marketing                                   1,005        679
     General and administrative                            1,826      2,038
                                                         -------    -------
         Total operating expenses                          2,831      2,717
                                                         -------    -------
Income (loss) from operations                                  4        (46)
Interest income, net                                         536        406
                                                         -------    -------
Income before provision for income taxes                     540        360
Provision for income taxes                                   250        156
                                                         -------    -------
         Net income                                      $   290    $   204
                                                         =======    =======

Basic earnings per share                                 $  0.02    $  0.02
                                                         =======    =======

Diluted earnings per share                               $  0.02    $  0.02
                                                         =======    =======

Shares used in computing earnings per share (basic)       12,985     12,906
                                                         =======    =======

Shares used in computing earnings per share (diluted)     13,234     13,096
                                                         =======    =======


See accompanying Notes to Condensed Consolidated Financial Statements.



                                       4
<PAGE>   5

                          ATLANTIC DATA SERVICES, INC.

                 Condensed Consolidated Statement of Cash Flows
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                                          JUNE 30,
                                                                    --------------------
                                                                      2000        1999
                                                                    -------      -------
<S>                                                                 <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                          $   290      $   204
Adjustments to reconcile net income to net cash provided by
  operating activities:
     Depreciation and amortization                                      129          161
     Deferred taxes                                                     113           --
     Change in assets and liabilities:
         Accounts receivable                                           (808)         891
         Prepaid expenses and other assets                              (79)        (288)
         Accounts payable                                                (6)        (184)
         Accrued expenses and other liabilities                      (1,372)      (1,321)
         Billings in excess of costs and estimated earnings on
          contracts                                                     (42)          --
         Federal and state income taxes                                   5         (417)
                                                                    -------      -------
Net cash provided by operating activities                            (1,770)        (954)
                                                                    -------      -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                      (56)         (95)
                                                                    -------      -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under capital lease obligation                        --           (5)
Proceeds from exercise of stock options under stock option plans         51           --
                                                                    -------      -------
Net cash provided by (used in) financing activities                      51           (5)
                                                                    -------      -------

Net increase (decrease) in cash and cash equivalents                 (1,775)      (1,054)

Cash and cash equivalents, beginning of period                       38,347       37,326
                                                                    -------      -------

Cash and cash equivalents, end of period                            $36,572      $36,272
                                                                    =======      =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
     Taxes                                                          $   277      $   771
                                                                    =======      =======

</TABLE>


See accompanying Notes to Condensed Consolidated Financial Statements.



                                       5
<PAGE>   6

                          ATLANTIC DATA SERVICES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                  June 30, 2000

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared by Atlantic Data Services, Inc. (the "Company") in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting solely of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended June 30, 2000 are
not necessarily indicative of the results that may be expected for future
periods of the full fiscal year. These Condensed Consolidated Financial
Statements should be read in conjunction with the Consolidated Financial
Statements and related notes included in the Company's Annual Report on Form
10-K for the year ended March 31, 2000.

The balance sheet at March 31, 2000 has been derived from the audited financial
statements at that date, but does not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company primarily derives its revenue from consulting services under time
and material billing arrangements. Under these arrangements, revenue is
recognized as the services are provided. Deferred revenue pertains to time and
material billing arrangements and represents cash collected in advance of the
performance of services.

Revenue on fixed price contracts is recognized using the percentage of
completion method of accounting and is adjusted monthly for the cumulative
impact of any revision in estimates. The Company determines the percentage of
its contracts by comparing costs incurred to date to total estimated costs.
Contract costs include all direct labor and expenses related to the contract
performance. An asset, "Costs and estimated earnings in excess of billings on
contracts," would represent revenues recognized in excess of amounts billed. The
liability, "Billings in excess of costs and estimated earnings on contracts,"
represents billings in excess of revenues recognized.

Included in revenues are reimbursable contract-related travel and entertainment
expenses, which are separately billed to clients.

Earnings Per Share

The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("FAS 128"). FAS 128 requires the presentation of two
amounts, basic earnings per share and diluted earnings per share.




                                       6
<PAGE>   7

3. EARNINGS PER SHARE

The following table sets forth the computation of basic earnings per share and
diluted earnings per share for the three months ended June 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       JUNE 30,
                                                                  ------------------
                                                                    2000       1999
                                                                  -------    -------
                                                                 (in thousands, except
                                                                     per share data)
<S>                                                               <C>        <C>
Numerator:
Net income (numerator for basic earnings per share and
  diluted earnings per share)                                     $   290    $   204
                                                                  -------    -------

Denominator:
Denominator for basic earnings per share - weighted average
  shares                                                           12,985     12,906
Effect of dilutive securities:
     Employee stock options                                           249        190
                                                                  -------    -------
         Denominator for diluted earnings per share - adjusted
           weighted average and assumed conversions                13,234     13,096
                                                                  -------    -------

Basic earnings per share                                          $  0.02    $  0.02
                                                                  =======    =======

Diluted earnings per share                                        $  0.02    $  0.02
                                                                  =======    =======
</TABLE>

In addition, as of June 30, 2000, there were options outstanding to purchase
1,637,375 shares that are potentially dilutive.

4. MAJOR CUSTOMERS

The nature of the Company's services results in the Company deriving significant
amounts of revenue from certain customers in a particular period. For the
quarter ended June 30, 2000, two customers accounted for 25.1% and 17.1% of the
Company's revenues. For the quarter ended June 30, 1999, two customers accounted
for 26.3% and 16.7% of the Company's revenues.



                                       7
<PAGE>   8

                          ATLANTIC DATA SERVICES, INC.


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

OVERVIEW

Atlantic Data Services, Inc. ("We" or "ADS") provides information technology
("IT") strategy consulting and systems integration services to customers
exclusively in the financial services industry, primarily banks. We offer IT
solutions to the business challenges faced by financial services companies
through our in-depth financial services experience, technological expertise and
project management skills. Our service offerings are organized around four
practice areas: e-Business, Customer Relationship Management ("CRM"), IT
Strategy and Consulting, and Conversions and Consolidations.

The business challenges created by deregulation and consolidation, coupled with
the need to maintain existing systems and incorporate new technologies, have
forced banks to turn to third party IT providers for assistance in developing IT
solutions to meet their changing needs. Because of the critical importance of
their IT systems, banks seek to engage IT service providers who have in-depth
knowledge of their systems and business processes and who can assume
responsibility for project management and delivery. IT service providers working
with banks must possess extensive experience in the financial services industry
and be fluent in both traditional legacy systems and newer technologies.
However, there is a shortage of professionals who have this combination of
skills. While many banks are concluding that using outside specialists enables
them to develop better IT solutions in less time and to reduce implementation
risks, most IT consulting firms do not have the specialized knowledge of the
financial services industry necessary to assist banks in rapidly and
cost-effectively meeting their business challenges.

We enable our customers to leverage their existing IT systems and personnel to
compete more effectively, to rapidly assimilate changing technologies and to
meet their evolving business needs in a timely and cost-effective manner. We
work closely with our customers' management and IT personnel from the diagnostic
and strategic planning stages through project completion. Our IT professionals
have extensive experience in the diverse technical environments, legacy hardware
platforms, programming languages, and software used by banks, as well as newer
technologies, including client/server applications and the Internet. In
addition, we have developed proprietary tools and methodologies designed to
reduce the risks inherent in complex systems implementations. We work closely
with our customers to determine the appropriate resources and staffing to assign
to their projects and deploy our staff from throughout the United States to meet
a customer's needs.

We have recently launched a new branding and image campaign and are now
promoting ADS as A D S Financial Services Solutions. Our official corporate name
will remain Atlantic Data Services, Inc., and our Nasdaq ticker symbol will
remain ADSC. We believe this new identification, coupled with the new tagline,
"Potential REALIZED," will more accurately convey the availability of our
expanded service offerings in e-Business and CRM, while expressing our
commitment to focus exclusively on the financial services sector. Our goal is to
identify ADS as the leader in providing IT solutions to the financial services
industry, making Financial Services Solutions synonymous with ADS.

Our revenues are derived primarily from professional fees billed to customers on
a time and materials basis, or, in certain instances, on a fixed price basis.
Included in revenues are reimbursable contract-related travel and entertainment
expenses, which are separately billed to customers. Substantially all of our
contracts, other than fixed price contracts, are terminable by the customer
following limited notice



                                       8
<PAGE>   9

and without significant penalty to the customer. Revenues from fixed price
contracts represented approximately 4.0% and 0% of our revenues for the quarters
ended June 30, 2000 and 1999, respectively.

We have derived, and expect to continue to derive, a significant portion of our
revenues from a relatively limited number of customers. Revenues from our five
largest customers for the quarters ended June 30, 2000 and 1999 were 67.2% and
65.4%, respectively, as a percentage of revenues. For the quarter ended June 30,
2000, FleetBoston Financial Corporation, Citizens Banking Corporation, Brokat
Financial, Hudson United Bank Corporation and Corillian Corp. accounted for
approximately 25.1%, 17.1%, 8.9%, 8.2% and 7.8%, respectively, of revenues. For
the quarter ended June 30, 1999, First Security Information Technology, Inc.,
FleetBoston Financial Corporation, SunTrust Service Corporation, Associated
Banc-Corp. and UST Data Services, Inc. accounted for approximately 26.3%, 16.7%,
8.4%, 7.4% and 6.7%, respectively, of revenues.

Cost of revenues consists primarily of salaries and employee benefits for
personnel dedicated to customer assignments, fees paid to subcontractors for
work performed in connection with customer assignments, and reimbursable
contract-related travel and entertainment expenses incurred by us in connection
with the delivery of our services.

Sales and marketing expenses consist primarily of salaries, employee benefits,
travel expenses and promotional costs. General and administrative expenses
consist primarily of expenses associated with our management, finance and
administrative groups, including recruiting, training, depreciation and
amortization and occupancy costs.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

This Report on Form 10-Q includes forward-looking statements. You can identify
these forward-looking statements when you see us using words such as "expect,"
"anticipate," "believe," "intend," "may," "predict," and other similar
expressions. These forward-looking statements cover, among other items: events,
conditions and financial trends that may effect the Company's future plans of
operation, business strategy, growth of operations and financial position,
including statements relating to capital expenditures, levels of professional
staff and sufficiency of cash and cash equivalent balances and the Year 2000
issue. Forward-looking statements are not guarantees of future performance and
are necessarily subject to a number of risks and uncertainties, some of which
are beyond our control. Actual results could differ materially from those
anticipated as a result of any of the following factors:

-    variations in our revenues and operating results which could cause our
     results of operations to be below the expectations of public market
     analysts and investors;

-    our dependence on the financial services industry;

-    the concentration of our revenues from a relatively limited number of
     customers;

-    our dependence on key personnel;

-    the availability of professional staff as our business involves the
     delivery of professional services which is labor-intensive;

-    competition from other companies in the information technology and systems
     integration market;

-    rapid technological change and our ability to develop information
     technology solutions that keep pace with such changes;

-    our potential for contract liability;

-    the risks associated with fixed price contracts;

-    equity control by management;

-    the risks associated with potential acquisitions; and

-    the volatility of our stock price.



                                       9
<PAGE>   10

Because of these risks and uncertainties, the forward-looking events discussed
in this Report might not transpire.

VARIABILITY OF QUARTERLY OPERATING RESULTS

Variations in our revenues and operating results have occurred from quarter to
quarter and may continue to occur as a result of a number of factors. Quarterly
revenues and operating results can depend on:

-    the number, size and scope of customer projects commenced and completed
     during a quarter;

-    changes in employee utilization rates;

-    changes in average billing rates;

-    the number of working days in a quarter;

-    the timing of introduction of new service offerings, both by us and our
     competitors;

-    changes in pricing, both by us and our competitors;

-    loss of a significant customer;

-    loss of key personnel;

-    other factors that adversely impact the financial services industry; and

-    general economic conditions.

The timing of revenues is difficult to forecast because our sales cycle is
relatively long, ranging from one to six months for new projects with existing
customers and three to six months for new customers, and may depend on factors
such as the size and scope of projects or other factors that adversely impact
the financial services industry and general economic conditions. In addition,
the relatively long length of our sales cycle may negatively impact the
operating results for any particular quarter as a result of increased sales and
marketing expenses without associated increases in revenues in the particular
quarter. Furthermore, many of our projects are, and may be in the future,
terminable without customer penalty. An unanticipated termination of a major
project or loss of a major customer could require us to maintain or terminate
underutilized employees, resulting in a higher than expected number of
unassigned persons or higher than expected severance expenses.

QUARTER ENDED JUNE 30, 2000 COMPARED TO QUARTER ENDED JUNE 30, 1999

REVENUES

Revenues decreased 7.1% for the quarter ended June 30, 2000 over the quarter
ended June 30, 1999, from $10.3 million to $9.5 million. This decrease was
predominantly due to a decrease in volume of services delivered to customers,
primarily because our customers have completed their use of external resources
for their Year 2000 projects.

COST OF REVENUES

Cost of revenues decreased 11.7% to $6.7 million from $7.6 million for the
quarter ended June 30, 2000 compared to the quarter ended June 30, 1999,
representing 70.2% and 73.9%, respectively, of revenues in each quarter. The
dollar decrease in cost of revenues was primarily due to a decrease in billable
personnel from 196 at June 30, 1999 to 160 at June 30, 2000. The decrease in
cost of revenues as a percentage of revenues is due to an increase in
utilization rates.

SALES AND MARKETING

Sales and marketing expenses increased 48.0% to $1.0 million from $679,000 for
the quarter ended June 30, 2000 compared to the quarter ended June 30, 1999,
representing 10.5% and 6.6% of revenues, respectively. This increase resulted
primarily from an increase in our sales and marketing group from 12



                                       10
<PAGE>   11

employees at June 30, 1999 to 15 employees at June 30, 2000, increased
investments in marketing initiatives and travel related expenses for the group.
We expect our sales and marketing expenses to increase in absolute dollars as we
add sales and marketing staff and undertake additional marketing initiatives.

GENERAL AND ADMINISTRATIVE

General and administrative expenses decreased 10.4% to $1.8 million from $2.0
million for the quarter ended June 30, 2000 compared to the quarter ended June
30, 1999, representing 19.2% and 19.9% of revenues, respectively. The dollar
decrease is primarily due to decreases in compensation and travel expense.

INTEREST INCOME, NET

Interest income, net increased $130,000 from $406,000 for the quarter ended June
30, 1999 to $536,000 for the quarter ended June 30, 2000. This increase was
principally due to interest rate increases.

PROVISION FOR INCOME TAXES

The provision for income taxes increased $94,000 to $250,000 from $156,000 for
the quarter ended June 30, 2000 compared to the quarter ended June 30, 1999,
resulting in effective tax rates of 46.3% and 43.3%, respectively. The increase
in the effective tax rate percentage is primarily due to permanent differences
relating to meals and entertainment expenses. Our rate may vary from period to
period based on doing business in areas with varying state and local statutory
income tax rates.


LIQUIDITY AND CAPITAL RESOURCES

We have no long-term debt and continue to operate primarily debt-free. Working
capital was $40.1 million at June 30, 2000. Our days sales in accounts
receivable at June 30, 2000 was 60 compared to 54 days at June 30, 1999. While
we believe that the risk with respect to collection of accounts receivable is
minimized by the creditworthiness of our customers, primarily banks and other
financial institutions, and because of our credit and collection policies, there
can be no assurance that we will not encounter collection problems in the
future. We attempt to further minimize this risk by performing ongoing credit
valuations of our customers and maintaining an allowance for potential credit
losses. We believe that our allowance for doubtful accounts and collection
policies are adequate.

Capital expenditures for the three months ended June 30, 2000 of $56,000 were
primarily to support our existing employees. Capital expenditures for the
remainder of fiscal 2001 are expected to be approximately $700,000 and will be
used principally for computers and other equipment.

We expect that existing cash and cash equivalent balances, together with cash
provided from operations, will be sufficient to meet the Company's working
capital and capital expenditure requirements for at least the next twelve
months.

To date, inflation has not had a material impact on the Company's financial
results.

IMPACT OF YEAR 2000

To date, we have not experienced any significant problems with our service
offerings and products or internal information systems as it relates to the Year
2000 date change. We are not presently aware of any significant exposure arising
from potential third party failures. However, there can be no assurance



                                       11
<PAGE>   12

that the systems of other companies on which our systems or operations rely have
been successfully converted or that any failure of such parties to achieve Year
2000 compliance could not have an adverse effect on our results of operations.

To date, the total cost to address the Year 2000 date change was not material
and all costs incurred were budgeted expenditures and were funded as incurred or
capitalized in accordance with normal policy. We have not deferred any material
information technology projects as a result of the Year 2000 program.

The information concerning our Year 2000 compliance effort includes
"forward-looking statements." Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors that may cause actual events or
costs to be materially different than indicated by such forward-looking
statements. These factors include, among others, unanticipated costs of
remediation and replacement of our Year 2000 compliance efforts, and the failure
of our material suppliers and other strategic relationships to ensure Year 2000
compliance. Any estimates and projections described have been developed by
management and are based on our best judgments together with the information
that is available to date. Due to the many uncertainties surrounding the Year
2000 issue, our stockholders are cautioned not to place undue reliance on such
forward-looking statements.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about our market risk disclosures involves
forward-looking statements. Actual results could differ materially from those
projected in the forward-looking statements. As of June 30, 2000, we did not use
derivative financial instruments for speculative or trading purposes.

Interest Rate Risk

We invest our cash in corporate money market accounts and collateralized
repurchase agreements. These securities are not subject to interest rate risk
and will not fall in value if market interest rates increase.

Foreign Currency Exchange Risk

The majority of our sales are denominated in U.S. dollars and take place in
North America. We do not believe foreign currency exchange rates or the
introduction of the Euro will have an impact on us.




                                       12
<PAGE>   13

                                     PART II

                                OTHER INFORMATION

ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS

        (d) Use of Proceeds

On May 22, 1998, we commenced an initial public offering of 2,500,000 shares of
common stock pursuant to our final prospectus dated May 22, 1998. The prospectus
was contained in our Registration Statement on Form S-1, which was declared
effective by the Securities and Exchange Commission (SEC File No. 333-48703) on
May 21, 1998. Of the 2,500,000 shares of common stock offered, 2,000,000 shares
were offered and sold by us and 500,000 shares were offered and sold by certain
stockholders of ADS. As part of the initial public offering, certain
stockholders of ADS granted the several underwriters, for whom BancAmerica
Robertson Stephens, BT Alex Brown and Adams, Harkness & Hill, Inc., acted as
representatives, an overallotment option to purchase up to an additional 375,000
shares of common stock. The initial public offering closed on May 28, 1998.

On June 22, 1998, the representatives, on behalf of the several underwriters,
purchased 375,000 shares of common stock from certain stockholders of ADS
pursuant to the exercise of the underwriters' overallotment option.

The aggregate offering price of the initial public offering to the public was
$32,500,000 (exclusive of the underwriters' overallotment option), with proceeds
to us and the selling stockholders, after deduction of underwriting discounts,
of $24,180,000 (before deducting offering expenses payable by us) and
$6,045,000, respectively. The aggregate-offering price of the underwriters'
overallotment option exercised was $4,875,000, with proceeds to the selling
stockholders, after deduction of the underwriting discounts and commissions, of
$4,533,750.

The aggregate amount of expenses incurred by us through March 31, 2000 in
connection with the issuance and distribution of the shares of common stock
offered and sold in the initial public offering were approximately $3,084,000,
including $2,275,000 in underwriting discounts and approximately $809,000 in
other expenses. No further expenses have been incurred.

None of the expenses paid by us in connection with the initial public offering
or the exercise of the underwriters' overallotment option were paid, directly or
indirectly, to directors, officers, persons owning ten percent or more of the
our equity securities, or affiliates of ADS.

The net proceeds to us from the initial public offering, after deducting
underwriting discounts and commissions and other expenses, were approximately
$23,371,000.

From May 21, 1998 through June 30, 2000, we have applied approximately
$1,324,000 of the net proceeds from the initial public offering to working
capital. We invested the balance of such net proceeds primarily in money market
accounts.






                                       13
<PAGE>   14

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits

            27.1  Financial Data Schedule

        (b) Reports on Form 8-K

            None




                                       14
<PAGE>   15

                                   SIGNATURES


Pursuant to the requirement 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.


                                   ATLANTIC DATA SERVICES, INC.



Date:  August 2, 2000              By: /s/ Robert W. Howe
                                       --------------------------------
                                   Robert W. Howe
                                   Chairman and Chief Executive Officer




Date:  August 2, 2000              By: /s/ Paul K. McGrath
                                       --------------------------------
                                   Paul K. McGrath
                                   Senior Vice President and Chief Financial
                                     Officer (Principal Financial and Accounting
                                     Officer)





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                                  EXHIBIT INDEX
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                                                                            Page
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27.1 - Financial Data Schedule                                               17


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