<PAGE>

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

                                     FORM 10-Q


(Mark One)

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

          For the quarterly period ended JUNE 30, 1998

                                         OR

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


          For the transition period from ______ to _______

                           Commission File Number 0-19690




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




          California                                       94-2993326
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                        Identification No.)



                                 2100 Milvia Street
                          Berkeley, California 94704-1113
           (Address, including zip code, of principal executive offices)


                                   (510) 548-5442
                (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 [ ]

     The number of shares of the registrant's Common Stock outstanding as of
June 30, 1998 was 13,805,544.

     Exhibit Index is located on page 24.

<PAGE>

                                       INDEX

<TABLE>
<CAPTION>

                                                                              PAGE
PART I    FINANCIAL INFORMATION                                              NUMBER
<S>                                                                          <C>
Item 1    Financial Statements:

          Condensed Consolidated Balance Sheets as of June 30, 1998
          (unaudited) and as of March 31, 1998                                 3

          Unaudited Condensed Consolidated Statements of Operations
          for the Three Months Ended June 30, 1998 and June 30, 1997           4

          Unaudited Condensed Consolidated Statements of Cash Flows
          for the Three Months Ended June 30, 1998 and 1997                    5

          Notes to Condensed Consolidated Financial Statements                 6

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


Item 3    Quantitative and Qualitative Disclosures About Market Risk          18

</TABLE>

<TABLE>
<CAPTION>

                                                                              PAGE
PART II   OTHER INFORMATION                                                  NUMBER
<S>                                                                          <C>
Item 1    Legal Proceedings                                                   20

Item 2    Changes in Securities and Use of Proceeds                           20

Item 4    Submission of Matters to a Vote of Security Holders                 20

Item 5    Other Information                                                   21

Item 6    Exhibits and Reports on Form 8-K                                    21

          Signatures                                                          23

          Exhibit Index                                                       24

</TABLE>

                                      2

<PAGE>

     PART I
     ITEM 1.   FINANCIAL STATEMENTS.

BARRA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1998 (UNAUDITED) AND MARCH 31, 1998
------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                                  JUNE 30,         MARCH 31,
                                                                                                    1998            1998
                                                                                                 ---------------------------
                                                                                                 (UNAUDITED)
<S>                                                                                              <C>            <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                                        $ 18,674,207   $ 33,673,314
Short-term investments                                                                             14,711,799      8,294,394
Investment in municipal debt securities- available for sale                                         6,334,995      6,265,204
Accounts receivable:
  Subscription and other (Less allowance for doubtful accounts of $152,873 and $169,183)           19,994,389     18,152,071
  Asset Management                                                                                  5,100,640      2,449,324
  Related parties                                                                                   4,586,915      3,855,057
Prepaid expenses                                                                                    1,661,235      1,965,819
----------------------------------------------------------------------------------------------------------------------------
    Total current assets                                                                           71,064,180     74,655,183
----------------------------------------------------------------------------------------------------------------------------

INVESTMENTS IN UNCONSOLIDATED COMPANIES                                                             2,071,661      2,128,532
FURNITURE AND EQUIPMENT:
Computer and office equipment                                                                      17,714,344     16,447,653
Furniture and fixtures                                                                              5,228,070      5,006,947
Leasehold improvements                                                                              7,672,831      6,677,300
----------------------------------------------------------------------------------------------------------------------------
Total premises and equipment                                                                       30,615,245     28,131,900
Less accumulated depreciation and amortization                                                    (14,890,787)   (13,513,701)
----------------------------------------------------------------------------------------------------------------------------
                                                                                                   15,724,458     14,618,199
DEFERRED TAX ASSETS                                                                                 2,282,522      2,282,522
COMPUTER SOFTWARE
(Less accumulated amortization of $1,303,868 and $1,051,275)                                        1,542,300      1,544,704
OTHER ASSETS                                                                                        1,532,203      1,463,824
GOODWILL AND OTHER INTANGIBLES
(Less accumulated amortization of $3,636,380 and $3,215,801)                                       29,487,378     24,767,142
----------------------------------------------------------------------------------------------------------------------------
TOTAL                                                                                            $123,704,702   $121,460,106
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                                                  1,841,829   $  2,223,129
  Due to related party                                                                              1,195,267      1,079,199
  Accrued expenses payable:
    Accrued compensation                                                                            1,427,830      9,663,688
    Accrued corporate income taxes                                                                  6,009,649      4,884,113
    Other accrued expenses                                                                          7,768,044      7,211,705
Unearned revenues                                                                                  26,058,286     22,160,710
----------------------------------------------------------------------------------------------------------------------------
    Total current liabilities                                                                      44,300,905     47,222,544
----------------------------------------------------------------------------------------------------------------------------

DEFERRED TAX LIABILITIES                                                                            1,506,173      1,486,362

MINORITY INTEREST IN EQUITY OF SUBSIDIARY                                                           1,835,482      2,000,217

SHAREHOLDERS' EQUITY:
Preferred stock, no par; 10,000,000 shares authorized; none issued and outstanding
Common stock, no par; 40,000,000 shares authorized; 13,805,544 and 13,675,388
  shares issued and outstanding                                                                    28,741,605     27,831,335
Retained earnings                                                                                  48,401,962     43,875,659
Foreign currency translation adjustment                                                            (1,081,425)      (956,011)
----------------------------------------------------------------------------------------------------------------------------
  Total shareholders' equity                                                                       76,062,142     70,750,983
----------------------------------------------------------------------------------------------------------------------------
TOTAL                                                                                            $123,704,702   $121,460,106
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

</TABLE>

  The accompanying notes are an integral part of the BARRA, Inc. Consolidated
                             Financial Statements

                                      3

<PAGE>

BARRA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                                 Three Months Ended June 30,
                                                                                                 ---------------------------
                                                                                                     1998           1997
                                                                                                 ---------------------------
<S>                                                                                              <C>             <C>
OPERATING REVENUES:
    Subscription and consulting fees                                                              $26,790,393    $21,118,324
    Electronic brokerage                                                                            3,767,264      2,580,905
    Asset management                                                                                5,355,491      3,407,233
                                                                                                 ---------------------------
      Total operating revenues                                                                     35,913,148     27,106,462
                                                                                                 ---------------------------

OPERATING EXPENSES:
    Cost of subscription products                                                                   2,630,847      1,715,221
    Compensation and benefits                                                                      16,748,774     12,958,500
    Rent expense                                                                                    1,738,794      1,131,628
    Other operating expenses                                                                        6,341,941      4,752,767
    One-time acquisition charges                                                                          -        9,914,000
                                                                                                 ---------------------------
      Total operating expenses                                                                     27,460,356     30,472,116
                                                                                                 ---------------------------

INTEREST INCOME & OTHER                                                                               572,835        455,070
                                                                                                 ---------------------------

INCOME (LOSS) BEFORE EQUITY IN NET INCOME AND LOSS OF
    INVESTEES, MINORITY INTEREST AND INCOME TAXES                                                   9,025,627     (2,910,584)

EQUITY IN NET INCOME AND LOSS OF INVESTEES                                                           (250,146)        21,688

MINORITY INTEREST                                                                                  (1,355,827)      (589,237)
                                                                                                 ---------------------------

INCOME (LOSS) BEFORE INCOME TAXES                                                                   7,419,654     (3,478,133)

INCOME TAXES                                                                                       (2,893,351)    (2,783,874)
                                                                                                 ---------------------------

NET INCOME (LOSS)                                                                                 $ 4,526,303    $(6,262,007)
                                                                                                 ---------------------------
                                                                                                 ---------------------------

NET INCOME (LOSS) PER SHARE:
    BASIC                                                                                         $      0.33    $     (0.49)
                                                                                                 ---------------------------
                                                                                                 ---------------------------
    DILUTED                                                                                       $      0.31    $     (0.49)
                                                                                                 ---------------------------
                                                                                                 ---------------------------

WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
SHARES:
    BASIC                                                                                          13,746,850     12,709,623
                                                                                                 ---------------------------
                                                                                                 ---------------------------
    DILUTED                                                                                        14,572,990     12,709,623
                                                                                                 ---------------------------
                                                                                                 ---------------------------

</TABLE>

  The accompanying notes are an integral part of the BARRA, Inc. Consolidated
                             Financial Statements

                                      4

<PAGE>

BARRA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                                      Three Months Ended
                                                                                                           June 30,
                                                                                                      1998           1997
                                                                                                 ------------    ------------
<S>                                                                                              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)                                                                                $  4,526,303    $(6,262,007)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
     Equity in net income and loss of investees                                                       250,146        (21,688)
     Minority interest                                                                              1,355,827        589,237
     Depreciation and amortization                                                                  1,787,735      1,057,389
     Gains on marketable securities                                                                  (250,000)           -
     One-time acquisition charges                                                                         -        9,914,000
     Other                                                                                            211,183       (162,525)
Changes in:
     Accounts receivable - subscription and other                                                  (1,842,318)     1,423,163
     Accounts receivable - asset management                                                        (2,651,316)           -
     Accounts receivable - related parties                                                           (731,858)      (236,155)
     Prepaid expenses                                                                                 304,584       (657,183)
     Other assets                                                                                     (68,379)      (938,547)
     Accounts payable, due to related party and accrued expenses                                   (7,012,490)    (3,972,637)
     Unearned revenues                                                                              3,832,576      1,944,597
----------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by operating activities                                                     (288,007)     2,677,644
----------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                                               (2,507,581)    (3,233,412)
Short-term investments - net                                                                       (6,167,405)    (1,278,160)
Investment in municipal debt securities - available for sale                                          (69,791)     1,154,641
Acquisitions - cash paid                                                                           (5,356,031)    (1,713,529)
Investments in unconsolidated companies                                                                   -       (1,803,559)
----------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                             (14,100,808)    (6,874,019)
----------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments to minority shareholders                                                                  (1,520,562)    (1,812,789)
Repayments on notes payable and lines of credit                                                           -         (117,523)
Proceeds from sale of common stock                                                                    910,270        336,836
----------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities                                                                (610,292)    (1,593,476)
----------------------------------------------------------------------------------------------------------------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                         (14,999,107)    (5,789,851)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                   33,673,314     25,831,118
----------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                       $ 18,674,207    $20,041,267
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

OTHER CASH FLOW INFORMATION:
Cash paid during the period for:
     Interest expense                                                                            $      5,517    $    16,819
     Income taxes                                                                                $  1,767,815    $ 1,221,276

</TABLE>

  The accompanying notes are an integral part of the BARRA, Inc. Consolidated
                             Financial Statements

                                      5

<PAGE>

                            BARRA, INC. AND SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of
BARRA, Inc. (the "Company" or "BARRA") and its wholly-owned subsidiaries.  Also
included in the accompanying consolidated financial statements are the accounts
of, 1) Bond Express, L.P., in which the Company determined it had controlling
financial interest beginning June 1, 1996; and, 2) Symphony Asset Management,
LLC ("Symphony LLC"), a 50%-owned joint venture. All significant intercompany
transactions and balances have been eliminated.  Certain reclassifications have
been made to prior year financial statements to conform to the current year
presentation.

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements include all adjustments (consisting of normal recurring
entries) necessary to present fairly the financial position of BARRA as of June
30, 1998 and the results of its operations and cash flows for the periods
presented in conformity with generally accepted accounting principles.  The
results of operations for the interim periods are not necessarily indicative of
results of operations for a full year.  The March 31, 1998 consolidated balance
sheet is derived from the audited consolidated financial statements included in
BARRA's Annual Report on Form 10-K for the fiscal year ended March 31, 1998,
filed with the Securities and Exchange Commission on June 25, 1998 (the
"Form 10-K"), but does not include all disclosures required by generally
accepted accounting principles. It is suggested that these consolidated
financial statements be read in conjunction with the audited consolidated
financial statements and related notes included in the Form 10-K and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in this Form 10-Q.

2.   BUSINESS COMBINATIONS


On June 17, 1998, the Company completed the acquisition of substantially all of
the assets and assumption of certain liabilities of Redpoint Software, Inc.
("Redpoint").  Redpoint is a leading provider of integrated risk management
solutions and enterprise-wide data management systems.  The purchase price was
$5.5 million in cash and up to an additional $12.5 million over a period of two
years following the closing based upon the financial performance of the acquired
assets.

                                      6

<PAGE>

The acquisition has been accounted for as a purchase and the cost of the
acquisition has been allocated on the basis of the estimated fair value of
assets acquired and liabilities assumed and resulted in goodwill of
approximately $5.5 million which is being amortized over 10 years. Under the
purchase method of accounting, results of operations from acquired businesses
are included in the financial statements of the acquiring company from the date
of acquisition only. Comparative pro forma financial information has not been
presented as the results of operations of Redpoint were not material to the
Company's consolidated financial statements.

3.   PER SHARE DATA

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share" ("SFAS 128"), basic earnings per share is based on the
weighted-average number of common shares outstanding for the period.  Diluted
earnings per share data is based on the weighted-average number of common and
dilutive potential common shares outstanding. Dilutive potential common shares
result from the assumed exercise of outstanding stock options that have a
dilutive effect when applying the treasury stock method. For all periods
presented, the only difference between basic and diluted earnings per share for
the Company is the inclusion of dilutive stock options in the denominator for
purposes of calculating diluted earnings per share. All prior period per share
data has been restated to conform to the provisions of SFAS 128 subsequent to
its adoption by the Company in the quarter ended December 31, 1997.

4.   RECLASSIFICATION

Revenues from bond offering services provided by Bond Express, L.P. of $377,198
for the three months ended June 30, 1997 have been reclassified on the
accompanying Consolidated Statement of Operations from "Electronic Brokerage" to
"Subscription and Consulting" to conform with the current period presentation.
Bond offering service revenues for the three months ended June 30, 1998 included
in "Subscription and Consulting" amounted to $414,929.

                                      7

<PAGE>

5.   NEW ACCOUNTING STANDARDS

COMPREHENSIVE INCOME

In the quarter ended June 30, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income" ("SFAS 130"), which establishes standards for reporting
and display of comprehensive income and its components. In accordance with SFAS
130, the Company has set forth in the table below the components of "Other
comprehensive income" and "Comprehensive Income":

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>

                                               Three months ended June 30,
                                                1998                1997
                                                ----                ----
<S>                                          <C>                <C>
Net Income (Loss)                            $4,526,303         $(6,262,007)
Other Comprehensive income (loss):
     Change in foreign currency
     translation adjustment during
     period                                  $ (125,414)        $   288,724
                                             ----------         -----------
Comprehensive income (loss)                  $4,400,889         $(5,973,283)
                                             ----------         -----------
                                             ----------         -----------

</TABLE>

SEGMENT INFORMATION

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131"), which is effective for fiscal years beginning after December 15, 1997.
SFAS 131 establishes standards for reporting financial and descriptive
information about an enterprises operating segments in its annual financial
statements and selected segment information in interim financial reports.
Although SFAS No. 131 need not be applied to interim financial statements in the
initial year of application, comparative information for interim periods of
fiscal 1999 will be reported in the Company's interim financial statements in
fiscal 2000. Further, all comparative information for prior periods will be
restated to conform to the provisions of SFAS 131.  Application of the
disclosure requirements of SFAS 131 will have no impact on the Company's
consolidated financial position, results of operations or earnings per share
data as currently reported.

                                      8

<PAGE>

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

The following discussion and analysis should be read in conjunction with the 
BARRA, Inc. ("BARRA" or the "Company") unaudited financial statements and 
related notes presented in this Form 10-Q.  The discussion of results, causes 
or trends should not be construed to imply that such results, causes or 
trends will necessarily continue in the future.  Each statement made in this 
discussion and analysis and elsewhere in this report containing any future 
verb tense or form of the words "anticipate", "estimate", "expect," 
"believe," "future" or "forward" is a forward-looking statement that may 
involve a number of risk factors and uncertainties.  Among other factors that 
could cause actual results to differ materially are the following: business 
conditions and other changes in the Company's industry; competitive factors 
such as rival products and price pressures both domestically and 
internationally; availability of adequate third-party data on reasonable 
terms and at reasonable prices; significant delays or excessive costs 
associated with product research, development and/or introduction; the loss 
of a large single revenue source; the investment performance and the timing 
of performance fee determination dates for the Company's asset management 
subsidiary; significant changes in trading volumes on the POSIT trading 
system; the ability of software and data to accommodate date changes after 
December 31, 1999; the adoption of the Euro Currency; and fluctuations in 
U.S. dollar exchange rates for non-U.S. currencies.  Further information and 
potential risk factors that could affect the Company's financial results are 
included throughout this Form 10-Q and in the Company's Form 10-K for the 
fiscal year ended March 31, 1998.

A.  GENERAL

Certain of the information required by this item has been previously reported
under the heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the Form 10-K.

REDPOINT ACQUISITION

As discussed in Note 2 to the financial statements, on June 17, 1998 the Company
completed the acquisition of substantially all of the assets and assumption of
certain liabilities of Redpoint. The purchase price was for $5.5 million in cash
and up to an additional $12.5 million over a period of two years following the
closing based upon the 

                                      9

<PAGE>

financial performance of the acquired assets. The acquisition has been 
accounted for as a purchase and the cost of the acquisition has been 
allocated on the basis of the estimated fair value of assets acquired and 
liabilities assumed and resulted in goodwill of approximately $5.5 million 
which is being amortized over 10 years.

YEAR 2000

It is widely anticipated that potential problems could occur after December 31,
1999 with computer systems or any equipment with computer chips which use year
dates that have been stored as just two digits.  On January 1, 2000, any clock
or date recording mechanism, including date-sensitive software, which uses only
two digits to represent a year, may recognize a two digit date (e.g., "00") as
referring to the twentieth century (e.g., "1900") rather than the twenty-first
century (e.g., "2000"), which could in turn result in system failure or
miscalculations.

To address the Year 2000 issue in the Company's products and internal systems,
the Company has assembled a team of internal and external information technology
professionals to review each of its applications and programs to identify those
that contain two-digit year codes.  The Company has also begun coordination with
other entities, including vendors that provide data for the Company's investment
anayltics software, to assess their Year 2000 compliance efforts and the
Company's exposure to any non-compliance by such vendors.  The Company is
assessing the amount of programming required to upgrade or replace each of the
affected applications or programs with the goal of completing all relevant
software remediation and testing by the end of the calendar year 1998.  The
Company anticipates continuing its general Year 2000 compliance efforts through
1999.

Based upon current information, the Company believes that its expenditures for
outside services relating to its Year 2000 compliance efforts, excluding
hardware, in fiscal 1998 and through the project's completion will be
approximately $2.5 million.  Costs incurred relating to this project are being
expensed by the Company during the period in which they are incurred.  The
Company's expectations about future costs associated with the Year 2000 issue
and about the target date for completion of software remediation and testing are
subject to uncertainties that could cause actual results to differ materially
from what has been discussed above.  Factors that could influence the amount and
timing of future costs include: the success and timeliness of the Company in
identifying products, applications and internal software that contain two-digit
year codes, the nature and amount of programming 

                                      10

<PAGE>

required to upgrade or replace each of the affected applications or programs, 
the rate and magnitude of related labor and consulting costs, and the success 
and timeliness of the Company's external counterparties and suppliers in 
addressing the Year 2000 issue.

EUROPEAN MONETARY UNION ("EMU")

It is also anticipated that potential problems could arise when the EMU replaces
certain European currencies with the "Euro". That replacement is expected to
occur by January 1, 1999.  To address the Euro issue, the Company has assembled
a team of technology and finance professionals to review its applications and
programs that use European currency data.  This team has also begun coordinating
with external vendors and service providers to assess their Euro compliance
efforts.

Based upon current information, the Company believes that it's expenditures for
outside services relating to its Euro compliance will be approximately $.5
million for fiscal 1998.  Costs associated with modifications necessary to
prepare for the EMU are being expensed by the Company during the period in which
they are incurred.  The Company's expectations for future costs associated with
and timely resolution of all Euro issues are subject to uncertainties that could
cause actual results to differ materially from the projections set forth above.
Factors that could influence the amount and timing of such costs include: the
success and timeliness of the Company in identifying products, applications and
internal software containing European currency data, the nature and amount of
programming and research required to upgrade or replace each of the affected
products and programs, the rate and magnitude of related labor and consulting
costs, and the success of the Company's external vendors and service providers
in addressing the Euro issue.

FOREIGN CURRENCY AND BUSINESS IN ASIA
BARRA, as an international corporation, generates revenues from clients
throughout the world, maintains sales and representative offices worldwide and
holds certain deposits and accounts in foreign currencies.  BARRA's revenues are
generated from both United States and non-U.S. currencies.  BARRA's
subscriptions in the United Kingdom and the European Community are priced in
British pounds sterling ("pounds") and European Currency Units ("ECUs"),
respectively.  Additionally, BARRA's consolidated subsidiary, BARRA
International (Japan), Ltd. ("BARRA Japan"), generates revenues, has expenses
and has assets and liabilities in Japanese yen.

                                      11

<PAGE>

The Company has customers and three sales and client support offices in Asia. 
For the three months ended June 30, 1998, revenues from Asia and Japan 
totaled approximately $3.7 million ($2.7 million in Japan) or approximately 
10% of total revenues. Excluding Japan, the Company bills its customers in 
Asia in US dollars and has nominal expenses in local currencies.  Recent 
volatility in Asian and Japanese capital markets has negatively impacted yen 
denominated revenues and could adversely impact future subscription renewals 
and related revenues for customers throughout Asia.

All other things being equal, weakening of the U.S. dollar has a positive impact
on profits, and strengthening of the U.S. dollar has a negative impact.  The
Company has considered its exposures to foreign currency fluctuations and to
this point has decided not to engage in hedging or managing exposures to foreign
currency fluctuations through contracts for the purchase, sale or swapping of
currencies. Accordingly, a strengthening of the U.S. dollar versus non-U.S.
currencies could have a material adverse impact on the Company's results of
operations and financial condition.

For the three month period ended June 30, 1998, when compared to the same period
a year ago, the U.S. dollar strengthened against the yen and ECU and was
relatively unchanged against the pound - all of which had the net effect of
reducing net revenues and net income by approximately $500,000 and $100,000,
respectively, compared to exchange rates in effect for the three month period
ended June 30, 1997.

Because the functional currency of BARRA Japan is the yen, the translation gains
and losses associated with the consolidation of its balance sheets at points in
time are reported as part of shareholders' equity.

Under current operating arrangements in the countries in which BARRA does
business, there are no restrictions upon the flow of funds from BARRA's foreign
subsidiaries to the parent company.

B.  FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The dollar and percentage increases or decreases set forth below in this
discussion and analysis of BARRA's consolidated financial condition result from
a comparison of BARRA's balance sheet at June 30, 1998 (unaudited) to the
balance sheet at March 31, 1998. All amounts have been rounded to the nearest
$1,000.

                                      12

<PAGE>

FINANCIAL CONDITION
Total assets increased $2,245,000 or 2%.

Total current assets decreased $3,591,000 or 5%. This net decrease consists
primarily of decreased cash and equivalents as a result of investing activities
and the payment of annual bonuses which occurred in May 1998 - see the
accompanying unaudited condensed consolidated statement of cash flows for more
information.

Goodwill and other intangibles increased $4,720,000 as a result of the Redpoint
purchase discussed in Note 2 to the accompanying condensed consolidated
financial statements.

Total current liabilities decreased $2,922,000. This decrease primarily reflects
growth in BARRA product subscriptions offset by a decrease in accrued
compensation as a result of the payment of annual bonuses to employees in May
1998.

Minority interest in equity of subsidiary represents minority shareholders'
interests in the net assets of Bond Express L.P. and Symphony Asset Management
LLC.

LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents, short-term investments and investment in municipal
debt securities available-for-sale totaled $39,721,000 at June 30, 1998.  In
addition, the Company has a commitment from a bank for an unsecured short-term
line of credit of up to $5 million - of which, no amounts have been, or are
presently anticipated to be, drawn down.

BARRA believes that its cash flow from operations (including prepaid
subscription fees), together with existing cash balances, will be sufficient to
meet its cash requirements for capital expenditures and other cash needs for
ongoing business operations. Other than commitments described in this discussion
and analysis and in the financial statements and notes, the Company has no
present binding understandings or commitments with respect to any significant
expenditures.

PRINCIPAL FINANCIAL COMMITMENTS.  The Company's principal financial commitments
consist of obligations under operating leases, contracts for the use of computer
and office facilities, and contingent obligations associated with acquisitions.

                                      13

<PAGE>

C.  RESULTS OF OPERATIONS

References to the dollar and percentage increases or decreases set forth below
in this discussion and analysis of BARRA's results of operations are derived
from comparisons of BARRA's consolidated statements of operations for the three
month periods ended June 30, 1998 and June 30, 1997. All amounts, except per
share amounts, have been rounded to the nearest $1,000.

NET INCOME (LOSS)
Net income for the three month period ended June 30, 1998 was $4,526,000 or
$0.31 per share (diluted), compared to a net loss of ($6,262,000) or ($0.49) per
share (diluted) for the same quarter a year ago. Results for the three month
period ended June 30, 1997 included a one-time acquisition charge of $9,914,000
($.74 per share) related the write-off of in-process research and development in
connection with the acquisition of Global Advanced Technology Corporation
("GAT").

OPERATING REVENUES.  Total operating revenues increased $8,807,000 or 32% over
the same quarter a year ago. Operating revenues from business acquired since
June 1997 (GAT, The Estimate Directory ("TED") and Directus included in the
three month period ended June 30, 1998 were $2,803,000.

SUBSCRIPTION AND CONSULTING FEES consist of annual subscription fees for BARRA's
software products, revenues from other sources related to the institutional
analytics business and consulting services to pension plan sponsors and
investment managers. A summary of the components and related changes is as
follows (amounts in $000's):

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------
                                                    THREE MONTHS ENDED
                                                         JUNE 30,
                                                                              %
                                            1997           1998            CHANGE
---------------------------------------------------------------------------------
<S>                                       <C>            <C>               <C>
Analytics subscriptions                   $20,778        $15,232             36
Other analytics related                     1,552          1,278             21
Consulting                                  4,460          4,608             (3)
---------------------------------------------------------------------------------
TOTAL                                     $26,790        $21,118             27
---------------------------------------------------------------------------------

</TABLE>


ANALYTICS SUBSCRIPTIONS are for BARRA's software and investment data products
and related updates.  The Company generally bills and collects fees on an annual
basis, but recognizes the income 1/12th per month over each year of the
subscription period.  Analytics subscriptions for the three 

                                      14

<PAGE>

month period ended June 30, 1998 includes $2,555,000 from GAT, TED and 
Directus businesses acquired since last year. The growth in annual 
subscription fees continues to be generated from a combination of obtaining 
new clients, increasing revenues from existing customers through the 
introduction of new products and services and acquisitions.

For the three month period ended June 30, 1998 compared to the same quarter a
year ago, annual subscription fee revenue (including GAT, Ted and Directus
revenue for 1998) for the U.S and non-U.S. markets increased approximately 51%
and 29%, respectively. Excluding the impact of the acquired subscription
revenue, the increase was 29% for U.S. and 14% for Non-U.S. subscription
revenues. In both cases revenues from non-U.S. sources were adversely impacted
by changes in foreign currency exchange rates (See section A above).

Revenue growth primarily came from equity models and related data reflecting the
continued success of the BARRA Aegis System-TM-.  Various new single country and
global versions of this equity analytics system have been introduced
continuously since July 1995.  Fixed income product sales also contributed,
primarily to the non-US increase, as a result of sales of the BARRA COSMOS
System-TM-. Increases in subscription revenues continue to come most
significantly from net increases in the number of subscriptions and less
significantly from changes in the prices of subscriptions.

REVENUES FROM OTHER SOURCES RELATED TO THE INSTITUTIONAL ANALYTICS BUSINESS
include timesharing revenues, seminar revenues and other recurring fees.
Fluctuations in these revenue sources result primarily from the timing of
seminars and the amount of timesharing billed to clients.

CONSULTING FEES
Consulting fees consist of fixed income consulting (acquired in the GAT
acquisition); services to pension plan sponsors ("Sponsor Services") which are
usually recurring retainer-based fee arrangements; and consulting to money
managers ("Strategic Services"), which are usually non-recurring, project
engagements that are completed in phases.  Also included in Strategic Services
revenues are fees related to consulting work done in connection with strategic
transactions involving clients. Accordingly, Strategic Services revenues are
susceptible to a large degree of variability depending on the ability to source
new projects and the unpredictable nature and significance of fees associated
with strategic transactions. Consulting fees from GAT's fixed income consulting
unit amounted to $248,000 for the three month period ended June 30, 1998.
Excluding the impact of GAT consulting fees, revenues from consulting services
decreased 

                                      15

<PAGE>

approximately $400,000 compared to the same period a year ago reflecting 
lower transaction fees of approximately $300,000 and a decline in project 
related revenues for the Strategic Service group.

ELECTRONIC BROKERAGE
Electronic brokerage revenues consist of license fees from Portfolio System for
Institutional Trading ("POSIT"), which increased $1,146,000 or 46% compared to
the same quarter a year ago. BARRA's revenues from POSIT are derived from
commissions generated by the trading volume in the system.  POSIT revenue
increases reflect record trading volumes during the quarter.

ASSET MANAGEMENT
Asset management revenues increased $1,948,000 or 57% compared to the same
quarter a year ago. Asset management revenues consist of fees generated from
active management of investor accounts by Symphony LLC and fees earned by BARRA
RogersCasey Asset Services Group from management of customized multi-manager
programs.

Symphony LLC's revenues consist primarily of asset management fees which are a
fixed percentage of asset value and performance fees that are based on the
performance over a benchmark for each account.  Symphony's total revenues were
$4,883,000 for the current quarter compared to $2,999,000 for the same quarter a
year ago. This increase in total revenues was the result of substantial
increases in both base and performance fees due to growth in assets under
management. As of June 30, 1998, Symphony had approximately $2.4 billion under
direct management. Of the funds under direct management, approximately $1.6
billion are managed under agreements that provide for performance fees in
addition to a base management fee.

Performance fees included in total revenues were $1,384,000 for the current
quarter compared to $378,000 for the same quarter a year ago. Performance fees
are recognized only at the measurement date for determining performance of an
account, which typically is at the end of each year of the contract. The
increase in performance fee revenues for the June, 1998 quarter over the same
quarter a year ago is the result of an increase in the number and value of
investor account anniversaries. Assets under management subject to performance
fees have increased approximately $600 million or 60% from June 30, 1997. The
pattern of anniversaries can change from quarter to quarter because of the
addition, termination and re-negotiation of account agreements. There is also,
of course, no assurance that the investment performance will continue at
historical levels. It is presently estimated 

                                      16

<PAGE>

that approximately 10% and 60% of the performance based funds under 
management will have performance fee determination dates in the quarters 
ended September 30, 1998 and December 31, 1998, respectively.

Symphony's future revenues will depend on the performance of the funds it 
manages and the timing of anniversary fee determination dates for performance 
based funds.

OPERATING EXPENSES. For the three month period ended June 30, 1998 compared to
the same period a year ago, total operating expenses, including one-time
acquisition charges, decreased $3,012,000 or 10%.  Excluding one-time
acquisition charges, operating expenses increased $6,902,000 or 34%.

COST OF SUBSCRIPTION PRODUCTS
Cost of subscription products consists of computer access charges, data and
software acquisition expenses, BARRA's computer leasing expenses, and seminar
expenses. This component of expense increased $916,000 or 53% compared to the
same quarter a year ago. Excluding the impact of acquired operations, cost of
subscription products increased approximately 29% compared to the same period a
year ago reflecting higher data, communication and seminar expenses.

COMPENSATION AND BENEFITS
Compensation and benefits increased $3,790,000 or 29% compared to the same
quarter a year ago. Excluding compensation and benefit costs from acquisitions
of approximately $2.4 million for the three months ended June 30, 1998, the
increase was 11%. The increases from the same quarter a year ago are primarily
the result of wage increases that take effect on July 1 within each fiscal year,
a modest increase in average headcount, increases in consultant costs associated
with Year 2000 and other projects, and increases in other related employee
benefit costs.

RENT EXPENSE
Rent expense increased $607,166 or 54% compared to the same quarter a year ago.
Approximately $140,000 of the increase is from acquired operations while the
remaining increase reflects new or expanded office space in London, Brazil, New
York and Darien, CT since June of 1997.

OTHER OPERATING EXPENSES
Other operating expenses increased $1,589,000 or 33% compared to the same
quarter a year ago. Other operating expenses include travel, office,
maintenance, depreciation, amortization, data and other expenses related to
asset management operations, marketing, advertising, outside legal and
accounting services and other corporate expenses.  The 

                                      17

<PAGE>

increases from the same quarter a year ago reflect expenses of acquired 
operations of approximately $1,200,000. Excluding expenses from acquired 
operations, other operating expenses increased $389,000 or 8% compared to the 
same quarter a year ago. These increases reflect higher data costs associated 
with asset management activities as well as increases in computer and 
communication costs and various other operating costs associated with BARRA's 
expanding business.

ONE-TIME ACQUISITION CHARGES
One-time acquisition charges of $9,914,000 ($.74 per share) for the three month
period ended June 30, 1997 represent purchased in-process research and
development in connection with the acquisition of GAT on June 24, 1997. As
required by generally accepted accounting principles, the portion of the
purchase price allocated to purchased in-process technology was immediately
expensed.

INTEREST INCOME AND OTHER
Interest income and other increased over the same quarter a year ago as a result
of higher recorded gains on short-term investments.

MINORITY INTEREST
Minority interest primarily represents the share of profits from Symphony Asset
Management LLC that is due to the  principals.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INVESTMENT PORTFOLIO

The Company does not use derivative financial instruments in its investment
portfolio.  The Company's investment portfolio primarily consists of investments
in: a) short-term, high-credit quality money market funds - amounting to
approximately $22.2 million at June 30, 1998; b) short-term, high credit quality
municipal debt securities - amounting to approximately $6.3 million at June 30,
1998; and c) market-neutral investment programs managed by two of the Company's
subsidiaries - amounting to approximately $11.2 million at June 30, 1998. The
short-term money market funds and the municipal debt securities are not insured
and because of the short-term nature of the investments are subject to credit
risk, but are not likely to fluctuate significantly in market value.

The Company's investments in market-neutral programs consist principally of long
and short positions placed directly (in 

                                      18

<PAGE>

the case of funds managed by Symphony) or indirectly (in the case of funds 
managed by BARRA RogersCasey Asset Services Group) through other fund 
managers in U.S and non-U.S. equity securities of both public and private 
issuers. Although the intent of the managers of these funds is to structure 
portfolios that are hedged against general market movements, these 
investments can be subject to significant changes in market value and are not 
insured.  All investment decisions with respect to these market neutral 
programs are made by the Company's professional investment advisers and the 
performance of the funds is reviewed periodically by management and the 
Company's Board of Directors.

IMPACT OF FOREIGN CURRENCY RATE CHANGES

The Company invoices customers in Europe in both British Pound Sterling and
European Currency Units.  In Japan, the Company bills its customers in Japanese
Yen.  Excluding customers in these locations, the Company generally bills for
its services in U.S. dollars.  BARRA has not engaged in foreign currency hedging
activities.  To the extent of its local currency (Yen, Pound and ECU) invoicing,
its international revenues are subject to currency exchange fluctuation risk.
To the extent that international revenues that are invoiced in local currencies
increase in the future, the Company's exposure to  fluctuations in currency
exchange rates will correspondingly increase. Currency fluctuations may also
effectively increase the cost of BARRA's products and services in countries in
which customers are invoiced in U.S. dollars.  See also Part I, Item 2, "Foreign
Currency and Business in Asia" for a description of the impact of changes in
foreign currency exchange rates during the quarter ended June 30, 1998.

The Company has no foreign debt and non-U.S. dollar cash balances held overseas
are generally kept at levels needed to meet current operating needs.

                                      19

<PAGE>

                            PART II - OTHER INFORMATION

Each statement made in this Part II containing any future verb tense or any form
of the words "believe", "future", "forward", "estimate", "anticipate" or
"expect" is a forward looking statement that may involve a number of risk
factors and uncertainties.  A discussion of those risk factors is located in the
first paragraph of Part I, Item 2.  Further information can be found throughout
this form and in the Company's Form 10-K.

ITEM 1.   LEGAL PROCEEDINGS.
All information required by this item has been previously reported under the
heading "Legal Proceedings" in the Form 10-K.  There have been no other material
developments in the legal proceedings of BARRA since the date of the Form 10-K.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.
Effective August 14, 1998, the Company changed its state of incorporation from
California to Delaware.  The reincorporation was accomplished through a merger
(the "Merger") of BARRA, Inc., a California corporation ("BARRA California"),
into its wholly owned Delaware subsidiary, BARRA (DE), Inc. ("BARRA Delaware").
Upon the Merger, BARRA Delaware changed its name to BARRA, Inc.  As a result of
the Merger, each outstanding share of BARRA California Common Stock, no par
value, was automatically converted into one share of BARRA Delaware Common
Stock, par value $.0001 per share.  Except for (a) the increase in the Company's
authorized number of shares of Common Stock from 40,000,000 to 75,000,000, (b)
the elimination of shareholder action by written consent, (c) the elimination of
the right of shareholders controlling at least ten percent of the voting shares
to call a special meeting of the shareholders, (d) the elimination of the right
of shareholders to cumulate their votes and (e) changes that are dictated by the
application of Delaware law, the BARRA Delaware Certificate of Incorporation and
Bylaws are substantially similar to those currently adopted by BARRA California.
As of the effective date of the Merger, BARRA Delaware has also entered into
indemnification agreements with each of its directors and certain of its
officers in a form approved by the Company's shareholders as a part of the
reincorporation proposal.  The reincorporation proposal was approved by the
Company's shareholders at the Company's Annual Meeting of Shareholders on August
5, 1998.  See also Item 4, Item 6(a) and Item 6(b)(i) and (ii) below.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  The Annual
Meeting of the Shareholders of BARRA was held on Wednesday, August 5, 1998.

The meeting was held to consider and vote upon (i) electing directors to serve
for the ensuing year and until their successors 

                                      20

<PAGE>

are duly elected and qualified; (ii) approving the merger of BARRA into its 
wholly-owned Delaware subsidiary for the purpose of changing the state of 
incorporation of BARRA from California to Delaware and effecting certain 
changes in the charter and the Bylaws of BARRA; (iii) approving a proposal to 
increase BARRA's authorized number of shares of Common Stock from 40,000,000 
to 75,000,000 and (iv) ratifying the selection of Deloitte & Touche LLP as 
independent auditors of BARRA for the fiscal year ended March 31, 1999.  The 
votes case with respect to each director are summarized as follows:  A. 
George Battle, for 12,201,922, withheld 333,399; John F. Casey, for 
12,197,224, withheld 338,097; M. Blair Hull, for 12,202,322, withheld 
332,999; Norman J. Laboe, for 12,201,422, withheld 333,899; Ronald J. 
Lanstein, for 12,201,372, withheld 333,949; Andrew Rudd, for 12,201,372, 
withheld 333,949.

The votes cast to approve the merger of BARRA into a wholly-owned Delaware
subsidiary for the purpose of changing the state of incorporation of BARRA from
California to Delaware and effecting certain changes in the charter and the
Bylaws of BARRA are summarized as follows:  for 8,723,564, against 1,228,887,
abstain 471,482, broker non-vote 2,111,388.  The votes cast to approve the
increase in the Company's authorized number of shares of Common Stock from
40,000,000 to 75,000,000 are summarized as follows:  for 11,675,144, against
384,033, abstain 476,144.  The votes cast to ratify the selection of Deloitte &
Touche LLP as independent auditors are summarized as follows:  for 12,057,449,
against 8,550, abstain 469,322.

ITEM 5.   OTHER INFORMATION.

On June 17, 1998 the Company completed the acquisition of substantially all of
the assets and assumption of certain liabilities of Redpoint Software, Inc.
("Redpoint").  For further details regarding the Redpoint transaction see Note 2
of the Notes to Consolidated Financial Statements and Item 2 of Part I of this
form.

Stockholders who expect to present a proposal at the 1999 Annual Meeting of
Stockholders which is not included in the Company's proxy statement should
notify the Secretary of the Company at 2100 Milvia Street, Berkeley, California
94704 of the proposal by May 16, 1999.  Without such notice, proxy holders
appointed by the Board of Directors of the Company will be entitled to exercise
their discretionary voting authority when the proposal is raised at the annual
meeting, without any discussion of the proposal in the proxy statement.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.
(a)  the following exhibits are required by Item 601 of the Regulation S-K:

                                      21

<PAGE>

<TABLE>
<CAPTION>

Exhibit                                           Sequential
Number         Exhibit Description                Page Number
------         -------------------                -----------
<S>            <C>                                <C>
3.1            Certificate of Incorporation
               Of BARRA, Inc.                          25

3.2            Bylaws of BARRA, Inc.                   27

27             Financial Data Schedule                 36
               (electronic filing only)
</TABLE>

(b)  Reports on Form 8-K:

     (i)   Current Report on Form 8-K filed June 8, 1998 containing BARRA,
           Inc.'s press release regarding its agreement to acquire
           substantially all of the assets and assume certain of the
           liabilities of Redpoint Software, Inc.

     (ii)  Current Report on Form 8-K filed June 18, 1998 containing BARRA,
           Inc.'s press release regarding the closing of its acquisition of
           substantially all of the assets and assumption of certain
           liabilities of Redpoint, Software, Inc.

                                      22

<PAGE>

                                     SIGNATURES

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


                                             BARRA, Inc.
                                             (Registrant)


Date:  August 14, 1998                  /s/ Andrew Rudd 
                                   -----------------------------------------
                                   Andrew Rudd, Chairman of the Board of
                                   Directors and Chief Executive Officer



Date:  August 14, 1998                  /s/ James D. Kirsner 
                                   -----------------------------------------
                                   James D. Kirsner, Chief Financial Officer

                                      23

<PAGE>

                                EXHIBIT INDEX
                                -------------

<TABLE>
<CAPTION>

Exhibit                                           Sequential
Number         Exhibit Description                Page Number
------         -------------------                -----------
<S>            <C>                                <C>
3.1            Certificate of Incorporation            25
               Of BARRA, Inc.

3.2            Bylaws of BARRA, Inc.                   27

27             Financial Data Schedule                 36
               (electronic filing only)

</TABLE>

                                      24