<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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: 000-29059

                                 ELOQUENT, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                     <C>
              DELAWARE                                        94-3221868
    (STATE OR OTHER JURISDICTION OF                        (IRS EMPLOYER
    INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)
</TABLE>

                      2000 ALAMEDA DE LAS PULGAS, SUITE 100
                           SAN MATEO, CALIFORNIA 94403
                                 (650) 294-6500

 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF THE
                    REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

Indicate by check mark whether the registrant (1) has filed all reports required
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. [X] Yes [ ] No

The number of outstanding shares of the registrant's Common Stock, $0.001 par
value, was 17,465,157 at October 31, 2000.


<PAGE>   2

                                 ELOQUENT, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                    <C>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements

             Condensed Balance Sheets as of September 30, 2000 and December 31, 1999 ..................  3

             Condensed Statements of Operations for the three and nine months ended
             September 30, 2000 and 1999 ..............................................................  4

             Condensed Statements of Cash Flows for the nine months ended September 30, 2000
             and 1999 .................................................................................  5

             Notes to Condensed Financial Statements ..................................................  6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......... 10

Item 3. Quantitative and Qualitative Disclosures about Market Risk .................................... 24

PART II: OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds ..................................................... 25

Item 6. Exhibits and Reports on Form 8-K .............................................................. 25

Signature ............................................................................................. 26
</TABLE>




                                       2.
<PAGE>   3

                          PART I: FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                                 ELOQUENT, INC.
                            CONDENSED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                    SEPTEMBER 30,   DECEMBER 31,
                                                                         2000           1999
                                                                    -------------   -------------
                                                                     (unaudited)
<S>                                                                   <C>             <C>
ASSETS
Current assets:
    Cash and cash equivalents                                         $  12,720       $ 17,174
    Short-term investments                                               35,342             --
    Accounts receivable, net of allowances for doubtful accounts
       of $500 and $334                                                   4,747          3,439
    Deferred production costs                                               110             37
    Prepaid expenses                                                        769            377
                                                                      ---------       --------
          Total current assets                                           53,688         21,027

Property and equipment, net                                               4,877          1,915
Deferred charges                                                             97          1,783
Long-term investments                                                     3,000             --
Other assets                                                              1,065            540
                                                                      ---------       --------
          Total assets                                                $  62,727       $ 25,265
                                                                      =========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Bank line of credit                                               $      --       $  3,000
    Accounts payable and other liabilities                                5,095          3,917
    Capital lease obligation - current portion                              724            618
    Deferred revenue                                                      1,324            787
                                                                      ---------       --------
          Total current liabilities                                       7,143          8,322
                                                                      ---------       --------
Capital lease obligation, net of current portion                            365            777
Long-term notes payable                                                      --          8,477

Stockholders' equity:
Convertible preferred stock, $0.001 par value; 9,938,844 shares
    authorized and 7,159,009 shares outstanding in 1999                      --              7
Preferred stock, $0.001 par value; 10,000,000 shares authorized and
    no shares outstanding in 2000                                            --             --
Common stock, $0.001 par value; 40,000,000 and 30,000,000 shares
    authorized and 17,246,995 and 3,452,238  shares issued                   17              4
Unearned stock-based compensation                                        (5,525)        (9,564)
Other comprehensive income: unrealized gain on investments                   58             --
Additional paid-in capital                                              124,580         52,089
Accumulated deficit                                                     (63,911)       (34,847)
                                                                      ---------       --------
          Total stockholders' equity                                     55,219          7,689
                                                                      ---------       --------
          Total liabilities and stockholders' equity                  $  62,727       $ 25,265
                                                                      =========       ========
</TABLE>



   The accompanying notes are an integral part of these financial statements.



                                       3.
<PAGE>   4

                                 ELOQUENT, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED            NINE MONTHS ENDED
                                                  SEPTEMBER 30,                SEPTEMBER 30,
                                             -----------------------      ----------------------
                                                2000          1999          2000          1999
                                             ----------    ---------      --------      --------
<S>                                          <C>           <C>            <C>           <C>
Revenue:
     Software licenses and maintenance         $    984      $   712      $  4,601      $  1,592
     Content production services                  1,805        2,760         7,065         6,404
     Professional services                          365          156         1,321           379
                                               --------      -------      --------      --------
              Total revenue                       3,154        3,628        12,987         8,375

Cost of revenue:
     Software licenses and maintenance              348          176         1,052           407
     Content production services                  1,624        1,508         4,340         3,907
     Professional services                          340          319         1,578           783
                                               --------      -------      --------      --------
              Total cost of revenue               2,312        2,003         6,970         5,097
                                               --------      -------      --------      --------
     Gross margin                                   842        1,625         6,017         3,278
                                               --------      -------      --------      --------

Operating expenses:
     Research and development                     1,597          467         3,754         1,417
     Sales and marketing                          6,225        2,016        15,728         5,684
     General and administrative                   1,376          915         3,577         2,586
     Stock-based compensation                       949        1,301         5,457         3,343
                                               --------      -------      --------      --------
              Total operating expenses           10,147        4,699        28,516        13,030
                                               --------      -------      --------      --------
Loss from operations                             (9,305)      (3,074)      (22,499)       (9,752)
                                               --------      -------      --------      --------
Interest expense and other charges                 (135)        (221)       (1,374)         (418)
Interest and other income                           838           35         2,262           123
                                               --------      -------      --------      --------
Net loss before extraordinary expense            (8,602)      (3,260)      (21,611)      (10,047)
Extraordinary loss on extinguishment of debt         --           --        (7,453)           --
                                               --------      -------      --------      --------
Net loss                                       $ (8,602)     $(3,260)     $(29,064)     $(10,047)
                                               ========      =======      ========      ========

Basic and diluted net loss per share:
    Net loss before extraordinary item         $  (0.50)     $ (0.91)     $  (1.48)     $  (3.06)
    Extraordinary loss                               --           --         (0.51)           --
                                               --------      -------      --------      --------
    Net loss                                   $  (0.50)     $ (0.91)     $  (1.99)     $  (3.06)
                                               ========      =======      ========      ========

Shares used in computing basic and diluted
    net loss per share                           17,185        3,563        14,618         3,286
                                               ========      =======      ========      ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       4.
<PAGE>   5

                                 ELOQUENT, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       NINE MONTHS ENDED
                                                                                          SEPTEMBER 30,
                                                                                     ---------------------
                                                                                       2000         1999
                                                                                     --------     --------
<S>                                                                                  <C>          <C>
Cash flows from operating activities:
    Net loss                                                                         $(29,064)    $(10,047)
    Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                    1,314          697
       Extraordinary loss on extinguishment of debt                                     7,453           --
       Amortization of discount on long-term notes payable                                478           --
       Amortization of deferred charges                                                   277           --
       Amortization of stock-based compensation                                         5,457        3,342
       Changes in operating assets and liabilities
           Accounts receivable                                                         (1,308)      (1,152)
           Deferred production cost                                                       (74)         152
           Prepaid expenses                                                              (391)        (157)
           Other assets                                                                 2,474          (40)
           Accounts payable and other liabilities                                       1,179          912
           Deferred revenue                                                               537         (153)
                                                                                     --------     --------
              Net cash used in operating activities                                   (11,668)      (6,446)
                                                                                     --------     --------

Cash flows from investing activities:
    Net purchases of short-term investment                                            (38,284)          --
    Purchase of long-term investment                                                   (3,000)          --
    Acquisition of property and equipment                                              (4,276)        (337)
                                                                                     --------     --------
              Net cash used in investment activities                                  (45,560)        (337)
                                                                                     --------     --------

Cash flows from financing activities:
    Proceeds from borrowings under bank line of credit                                     --        7,120
    Repayment of borrowings under bank line of credit                                  (3,000)      (3,100)
    Fees incurred in connection with bank line of credit                                   --          (70)
    Repayment of subordinated notes                                                   (20,000)          --
    Proceeds from issuance of common stock, net of repurchases and offering costs      76,080          114
    Proceeds from capital lease financing                                                 277           --
    Payment of principal on capital lease financing                                      (583)        (511)
                                                                                     --------     --------
              Net cash provided by financing activities                                52,774        3,553
                                                                                     --------     --------

Net increase (reduction) in cash and cash equivalents                                  (4,454)      (3,230)

Cash and cash equivalents, beginning of period                                         17,174        6,661
                                                                                     --------     --------
Cash and cash equivalents, end of period                                             $ 12,720     $  3,431
                                                                                     ========     ========

Supplemental disclosure of cash flow information:
       Cash paid during the year for:

Interest                                                                             $    557     $    237
       Non-cash transactions:
           Stock-based compensation                                                  $  1,418     $  9,208
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       5.
<PAGE>   6

                                 ELOQUENT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 1 - The Company and Basis of Presentation

Eloquent, Inc. ("Eloquent" or the "Company") produces rich media solutions for
business communications. These rich media solutions are used to communicate to
target audiences through the combination of video, audio, graphics and text in a
synchronized, searchable and navigable format. These rich media presentations
can be delivered via the Web, intranets, extranets and CD-ROMs.

In the opinion of management, the accompanying unaudited condensed financial
statements include all adjustments, consisting only of normal recurring items,
necessary for their fair presentation in conformity with accounting principles
generally accepted in the United States. The results of operations for the
interim periods presented are not necessarily indicative of the results for any
future interim period or for the entire year. The information included in this
Form 10-Q should be read in conjunction with Management's Discussion and
Analysis and financial statements and notes thereto included in our Registration
Statement on Form S-1, as amended, filed with the Securities and Exchange
Commission (SEC File No 333-89537).

The preparation of condensed financial statements requires management to make
estimates and assumptions that affect the recorded amounts reported in the
unaudited condensed financial statements and accompanying notes. A change in the
facts and circumstances surrounding these estimates could result in a change to
the estimates and impact future operating results.

Note 2 - Equity Transactions

Common Stock and Conversion of Preferred Stock:
In February 2000, the Company completed its initial public offering and issued
5,175,000 shares of its Common Stock at a price of $16.00 per share. The Company
received approximately $75.7 million in cash, net of underwriting discounts,
commissions and other offering costs. Simultaneously with the closing of the
initial public offering, each outstanding share of Convertible Preferred Stock
was automatically converted into one share of Common Stock.

Stock-Based Compensation:
Eloquent accounts for stock-based compensation issued to employees in accordance
with the provisions of Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees", and complies with the disclosure
provisions of Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation." Under APB No. 25, expense is based on
the difference, if any, on the date of grant, between the fair value of common
stock and the exercise price. Stock issued to non-employees has been accounted
for in accordance with SFAS No. 123 and valued using the Black-Scholes
option-pricing model.

Note 3 - Other Comprehensive Income

Eloquent accounts for other comprehensive income in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No. 130,
Reporting Comprehensive Income. SFAS No. 130 has no impact on the Company's net
income or total stockholders' equity. The following table sets forth components
of comprehensive income, net of tax expense, for the periods indicated:

<TABLE>
<CAPTION>
                                       Three Months Ended          Nine Months Ended
                                         September 30,               September 30,
                                       2000         1999           2000          1999
                                    ---------     ---------      ---------     ---------
<S>                                 <C>           <C>            <C>           <C>
Net loss                            $(8,602)      $(3,260)       $(21,611)     $(10,047)

Unrealized gain on investments           58            --              --            --
                                    -------       -------        --------      --------
Comprehensive loss                  $(8,544)      $(3,260)       $(21,611)     $(10,047)
                                    =======       =======        ========      ========
</TABLE>



                                       6.
<PAGE>   7

Note 4 - Net Loss per Share

Eloquent computes net loss per share in accordance with SFAS No. 128 "Earnings
Per Share." Under the provisions of SFAS No. 128 basic net loss per share is
computed by dividing the net loss for the period by the weighted average number
of vested common shares outstanding during the period. Diluted net loss per
share is computed by dividing the net loss for the period by the weighted
average number of common and common stock equivalent shares outstanding during
the period. Common equivalent shares are composed of common shares issuable upon
conversion of convertible preferred stock (using the if-converted method) and
shares issuable upon the exercise of stock options and warrants and are included
in the diluted net loss per share to the extent that they are dilutive.

The following table sets forth the computation of basic and diluted net loss per
share for the periods indicated:

<TABLE>
<CAPTION>
                                                                Three Months Ended        Nine Months Ended
                                                                    September 30,            September 30,
                                                              ---------------------     ---------------------
                                                                2000         1999         2000         1999
                                                              --------     --------     --------     --------
<S>                                                           <C>          <C>          <C>          <C>
Numerator:
    Net loss before extraordinary expense                     $ (8,602)    $ (3,260)    $(21,611)    $(10,047)
    Extraordinary loss on extinguishment of debt                    --           --       (7,453)          --
                                                              --------     --------     --------     --------
    Net loss                                                  $ (8,602)    $ (3,260)    $(29,064)    $(10,047)
                                                              --------     --------     --------     --------

Denominator:
    Weighted average common stock outstanding                   17,281        3,893       14,727        3,760
    Weighted average common stock subject to repurchase            (96)        (330)        (109)        (474)
                                                              --------     --------     --------     --------


Denominator  for basic and diluted calculation                  17,185        3,563       14,618        3,286
                                                              --------     --------     --------     --------
Basic and diluted net loss per share                          $  (0.50)    $  (0.91)    $  (1.99)    $  (3.06)
                                                              --------     --------     --------     --------

Antidilutive securities:
    Convertible preferred stock                                     --        7,159           --        7,159
    Options to purchase common stock                             4,122        2,679        4,122        2,679
    Warrants                                                       609          208          609          208
                                                              --------     --------     --------     --------
                                                                 4,731       10,046        4,731       10,046
                                                              ========     ========     ========     ========
</TABLE>

Note 5 - Strategic Investment

In March 2000, Eloquent and TradeMD.com, a provider of an electronic marketplace
for the purchase and liquidation of medical equipment and supplies, entered into
a strategic relationship. As part of this relationship, Eloquent purchased
approximately 461,538 shares of TradeMD.com Preferred Stock for $3.0 million.
This investment is being accounted for using the cost method.

Note 6 - Long-term Notes Payable and Extraordinary Loss on Extinguishment of
Debt

In October 1999, Eloquent sold convertible notes and detachable warrants to
purchase 1,500,000 shares of common stock for aggregate gross consideration of
$20.0 million. The notes provided


                                       7.
<PAGE>   8

that they were to mature on October 20, 2004 and bear interest at 12% per annum.
The warrants expire the earlier of 5 years after the repayment of the notes or
October 20, 2006. In conjunction with the sale of the notes Eloquent incurred
approximately $1.5 million in debt issuance costs. In accordance with the terms
of the notes, all amounts outstanding under the notes were repaid upon
consummation of Eloquent's initial public offering on February 23, 2000.

The gross consideration received from the notes was allocated between the notes
and the warrants in accordance with Accounting Principles Board Opinion No. 14
"Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants"
as follows (in thousands):

<TABLE>
<S>                                   <C>
Long-term notes payable               $12,500
Warrants                                7,500
                                      -------
Gross consideration                   $20,000
                                      -------
</TABLE>

The notes provided that after December 31, 2000, the investors, at their option,
could convert the notes to Series E preferred stock at an initial conversion
rate of $8 per share, subject to certain anti-dilutive provisions. This gave
rise to a beneficial conversion feature of $5.0 million, based on the fair value
of common stock at the date of the sale of the notes and detachable warrants.
This beneficial conversion feature was recorded as a further discount on the
sale of the notes.

The debt issuance costs and the discount resulting from the issuance of the
warrants were being amortized to interest expense over the life of the notes.
The beneficial conversion feature was being amortized over the one-year period
up to the earliest conversion date. Upon repayment of the notes, the unamortized
portion of the discount resulting from the issuance of the warrants and the debt
issuance costs were recorded as an extraordinary loss on the extinguishment of
debt.

Note 7 - Recent Accounting Pronouncements

In June 1998, the FASB Issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging activities. SFAS No. 133 was subsequently amended by
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of FASB Statement No. 133 and SFAS No. 138,
Accounting for Certain Derivative Instruments and Certain Hedging Activities: an
amendment of FASB Statement No. 133. SFAS No. 137 requires adoption of SFAS No.
133 for fiscal years beginning after June 15, 2000. SFAS No. 138 establishes
accounting and reporting standards for derivative instruments and addresses a
limited number of issues causing implementation difficulties for numerous
entities. The Statement requires us to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be recorded at fair
value through earnings. If the derivative qualifies as a hedge, depending on the
nature of the exposure being hedged, changes in the fair value of derivatives
are either offset against the change in fair value of hedged assets,
liabilities, or firm commitments through earnings or are recognized in other
comprehensive income until the hedged cash flow is recognized in earnings. The
ineffective portion of a derivative's change in fair value is recognized in
earnings. The Statement permits early adoption as of the beginning of any fiscal
quarter. Eloquent will adopt SFAS No. 133 for the 2001 fiscal year but does not
expect such adoption to materially affect the financial statement presentation.

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 101 or SAB 101, Revenue Recognition in Financial
Statements, which provides guidance on the recognition, presentation, and
disclosure of revenue in financial statements filed with the Commission. SAB
101 outlines the basic criteria that must be met to recognize revenue and
provides guidance for disclosures related to revenue recognition policies. On
March 24, 2000 and June 26, 2000, the SEC issued Staff Accounting Bulletin No.
101A and No. 101B, respectively, which extend the transition provisions of SAB
101 until no later than the fourth quarter of fiscal years beginning after
December 15, 1999. We believe that we currently comply with SAB 101.

In March 2000, the FASB issued Interpretation No. 44, (FIN 44), Accounting for
Certain Transactions Involving Stock Compensation - an Interpretation of APB 25.
This Interpretation clarifies (a) the definition of employee for purposes of
applying Opinion 25, (b) the criteria for determining whether a plan qualifies
as a non-compensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the


                                       8.
<PAGE>   9
accounting for an exchange of stock compensation awards in a business
combination. This Interpretation is effective July 1, 2000, but certain
conclusions in this Interpretation cover specific events that occur after either
December 15, 1998, or January 12, 2000. To the extent that this Interpretation
covers events occurring during the period after December 15, 1998, or January
12, 2000, but before the effective date of July 1, 2000, the effects of applying
this Interpretation are recognized on a prospective basis from July 1, 2000.
Adopting this Interpretation did not have a material affect on Eloquent's
financial statement position.

Note 8 - Subsequent Events

Stockholders Rights Plan:
In October 2000, Eloquent's Board of Directors adopted a Stockholders Rights
Plan ("Rights Plan") under which all stockholders of record as of November 8,
2000 will receive rights to purchase shares of a new series of Preferred Stock.
The adoption of Rights Plan is intended as a means to guard against abusive
takeover tactics and is not in response to any particular proposal. The rights
will trade with Eloquent's Common Stock, unless and until they are separated
upon the occurrence of certain future events. The rights will be exercisable
only if a person or group acquires 20% or more of Eloquent's Common Stock or
announces a tender offer for 20% or more of the Common Stock. If a person
acquires 20% or more of Eloquent's Common Stock, all rightsholders except the
buyer will be entitled to acquire Eloquent's Common Stock at a discount. The
rights distribution is not taxable to the stockholders. Eloquent's Board of
Directors may terminate the Rights Plan at any time or redeem the rights prior
to the time a person acquires more than 20% of Eloquent's Common Stock.

Strategic Investment:
In October 2000, Eloquent and Rebop Media, Inc. ("Rebop"), a new live Web
conferencing company, entered into a strategic relationship where-by Eloquent
invested approximately $1.5 million in Rebop. Eloquent also holds the right,
subject to Eloquent's stockholder approval, to acquire Rebop if Rebop
successfully installs its product in three customer sites. Rebop's Web
conferencing solution will be designed to integrate with Eloquent's ECS. Cliff
Reid, Eloquent's Chief Executive Officer, serves as President and Chief
Executive Officer of Rebop. In the quarter ended September 30, 2000, as the
investment and acquisition agreements were being negotiated, Eloquent provided
operating funds to Rebop under terms of various notes. Upon consummation of the
investment, the notes were repaid. As Eloquent is the primary investor in Rebop,
Rebop's results of operations and financial position will be consolidated with
Eloquent's financial results in future periods. Although Eloquent's investment
in Rebop was not consummated until October, given the nature of the companies'
relationship, Eloquent has recognized the operating expenses incurred by Rebop
as research and development expense in the three months ended September 30,
2000.


                                       9.


<PAGE>   10

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

This report on Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which are subject to the "safe harbor" created by those
sections. These forward-looking statements involve risks and uncertainties and
relate to our future plans, objectives, beliefs, expectations and intentions.
These statements include, but are not limited to: statements related to industry
trends and future growth in the markets for rich media solutions for
business-to-business communications; our strategies for reducing the cost of our
products; our product development efforts; our future research and development;
the timing of our introduction of new products; the timing and extent of
deployment of our products by our customers; and future profitability. These
statements may be identified by the use of words such as "expects,"
"anticipates," "believes," "intends," "plans" and similar expressions. Our
actual results may differ significantly from those projected in the
forward-looking statements. Factors that may cause future results to differ
materially from those projected in the forward-looking statements include, but
are not limited to, those discussed in "Risk Factors" and elsewhere in this
report.

The following should be read in conjunction with the audited financial
statements and the notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in our Registration
Statement on Form S-1, as amended, filed with the Securities and Exchange
Commission (SEC File No 333-89537).

OVERVIEW

We incorporated in Delaware in March 1995. In February 1996, we launched Version
1.0 of our solutions platform, which included the essential elements of content
production and navigation, including synchronized video, audio, graphics and
text as well as searchable transcripts, for delivery on CD-ROM only. In July
1996, we launched Version 2.0, which expanded delivery from CD-ROM to intranets,
included searchable slides and added variable speed playback. In November 1997
we launched Version 3.0. It further expanded delivery options to include
Web-based transmissions at 28.8 Kbps and added tracking and reporting and
software demonstrations. In April 1998, we introduced our content hosting
service and software. In January 1999, we launched our professional services
organization to provide integration services and professional media development
services. In April 1999, we launched Version 4.0 of our solutions platform,
which includes our publishing tools and added support for high-resolution video
and the ability for application developers to customize certain aspects of our
software. In December 1999, we launched Version 5.0, which offers advanced
integration, search, navigation and analysis features. In August 2000, we
launched Version 6.0, which allows enterprises to organize, manage, secure,
personalize and enrich all forms of streaming content.

We generate revenue through content production services, software licenses and
maintenance and professional services. For each content production transaction,
we charge our customers a fixed fee for each hour of finished content. Our
software license revenue consists of one-time fees charged for the use of our
desktop player and applications server software and monthly fees for content
hosting. Our maintenance revenue consists of prepaid contracts related to
software, which are recognized over the contract term, usually one year. Our
professional services revenue is from contracted services to customize the
content and software for our customers. Most of our revenue to date has been
from our content production services. We expect content production services to
produce the largest portion of our revenue for the foreseeable future, but we
intend to increase sales of our applications server software and content hosting
so that software license


                                      10.
<PAGE>   11

revenue constitutes an increasing percentage of our revenue. The gross margin
attributable to software license revenue is significantly higher than that of
our content production services. We cannot assure you that we will be able to
increase the proportion of software license revenue and, therefore, we cannot
assure you that we will be able to proportionally improve our gross margin.

We generally recognize content production services revenue upon shipment of the
rich media event to the customer and software license revenue upon delivery of
software to the customer. Content production services revenue includes revenue
for CD-ROM duplication. We recognize this revenue upon shipment of the
duplicated CD-ROMs. The revenue for software licenses is recognized upon
shipment, or upon notification by the customer, dependent on the delivery
medium. We recognize revenue for maintenance and content hosting ratably over
the period of the maintenance or content hosting contract. We recognize
professional services revenue on a percentage of completion basis as services
are performed.

A limited number of large customers have accounted for a majority of our
revenue, and will continue to do so for the foreseeable future. However, no
customer accounted for more than 10% of our total revenue for the three months
or the nine months ended September 30, 2000 or the comparable periods in 1999.
To date, most of our customers have been in the telecommunications, software,
high-technology manufacturing, financial services and pharmaceuticals
industries.

Stock-based compensation charges consist primarily of charges related to the
difference between employee option exercise prices and deemed fair market values
on the date of grant amortized over the vesting period of the options. Through
September 30, 2000, we have recorded a total of $17.7 million in stock-based
compensation charges in connection with stock option grants to our employees and
consultants, which is being amortized using an accelerated method of
amortization as described in Financial Accounting Standards Board Interpretation
No. 28, over the vesting periods of the options, generally four to five years.

No costs for our software development efforts have been capitalized as of
September 30, 2000 because Eloquent's products generally have reached
technological feasibility and have been released for sale at substantially the
same time. However, costs incurred for outside contractors to develop aspects of
our internal production management system were capitalized as an asset on our
balance sheet.

We have not achieved profitability on a quarterly or annual basis to date and we
anticipate that we will continue to incur net losses for the foreseeable future.
As of September 30, 2000, we had an accumulated deficit of $63.9 million. We
expect to increase our operating expenses significantly, expand our sales and
marketing operations and continue to develop and expand our solutions platform.
If these increased expenses are not accompanied by increased revenue, our
business, financial condition and operating results would suffer.

We have experienced and expect to continue to experience seasonality in our
business. Due to the marketing cycles of our customers, sales of our content
production services generally tend to be lower in the fourth calendar quarter of
each year. Because the market for rich media business-to-business communications
using the Web is still new, additional seasonal and other patterns in the usage
of our products and services may emerge as the market matures.


                                      11.
<PAGE>   12

RESULTS OF OPERATIONS

The following table sets forth certain statement of operations data for the
periods indicated as a percentage of total revenue.

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED   NINE MONTHS ENDED
                                                  SEPTEMBER 30,       SEPTEMBER 30,
                                                 --------------      --------------
                                                 2000      1999      2000      1999
                                                 ----      ----      ----      ----
<S>                                              <C>       <C>       <C>       <C>
Revenue:
     Software licenses and maintenance             31%       20%       35%       19%
     Content production services                   57        76        55        76
     Professional services                         12         4        10         5
                                                 ----      ----      ----      ----
              Total revenue                       100       100       100       100
                                                 ----      ----      ----      ----

Cost of revenue:
     Software licenses and maintenance             11         5         8         5
     Content production services                   51        41        33        47
     Professional services                         11         9        12         9
                                                 ----      ----      ----      ----
              Total cost of revenue                73        55        53        61
                                                 ----      ----      ----      ----
     Gross margin                                  27        45        47        39
                                                 ----      ----      ----      ----

Operating expenses:
     Research and development                      51        13        29        17
     Sales and marketing                          197        56       121        68
     General and administrative                    44        25        28        31
     Stock-based compensation                      30        36        42        40
                                                 ----      ----      ----      ----
              Total operating expenses            322       130       220       156
                                                 ----      ----      ----      ----
Loss from operations                             (295)      (85)     (173)     (117)
Interest expense and other charges                 (4)       (6)      (11)       (5)
Interest and other income                          27         1        17         1
                                                 ----      ----      ----      ----
Net loss before extraordinary expense            (272)      (90)     (167)     (121)
Extraordinary loss on extinguishment of debt       --        --       (57)       --
                                                 ----      ----      ----      ----
Net loss                                         (272)%     (90)%    (224)%    (121)%
                                                 ====      ====      ====      ====
</TABLE>

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

Revenue. Total revenue decreased 13% to $3.2 million for the three months ended
September 30, 2000 from $3.6 million for the comparable period in 1999. Total
revenue increased 55% to $13.0 million for the nine months ended September 30,
2000 from $8.4 million for the comparable period in 1999. The decrease in
revenue for the three-month period is attributable to a decrease in the average
size of sales of our products and services. The increase in the nine-month
period is attributable to an increase in the number and average size of sales of
our products and services, additional product and service offerings and higher
prices.

Software licenses and maintenance. Revenue from software licenses and
maintenance increased 38% to $984,000 for the three months ended September 30,
2000 from $712,000 for the same period in 1999. Revenue from software licenses
and maintenance for the nine months ended September 30, 2000 increased 189% to
$4.6 million from the same period in 1999. The


                                      12.
<PAGE>   13

increase, in both periods, was primarily due to the introduction of a new server
product, the Eloquent Communications Server, that added functionality and was
offered at a substantially higher price than our previously available server
products. The remainder was attributable to an increase in the number of server
products sold in the current year.

Content production services. Content production services revenue decreased to
$1.8 million for the three months ended September 30, 2000 from $2.8 million for
the same period in 1999. The decrease was attributable to a decrease in the
number of rich media events we produced from 87 to 76 and a decrease in the
average revenue per event. Content production services revenue for the nine
months ended September 30, 2000 was $7.1 million, an increase of 10% from the
same period in 1999. The increase was the result of an increase in the number of
rich media events we produced from 232 to 266.

Professional services. We launched our professional services organization in the
first quarter of 1999. Professional services revenue was $365,000 for the three
months ended September 30, 2000 and $156,000 for the comparable period in 1999.
Professional services revenue for the nine months ended September 30, 2000 was
$1.3 million, an increase of 248% from the same period in 1999. In both the
three and nine months ended September 30, 2000, the increase in revenue compared
to the same periods in 1999 is attributable to an increase in professional
services engagements. Revenue was recognized on 19 professional services
engagements for the three months and nine months ended September 30, 2000 as
compared to 6 engagements for the same periods in 1999.

Cost of revenue. Cost of revenue consists primarily of software licenses and
maintenance costs, content production services costs, and professional services
costs. Cost of software licenses and maintenance consists of customer support
and content hosting personnel and royalty payments due to the owners of licensed
third-party software. Cost of content production services consists of event
production costs and direct personnel expenses associated with event production,
with some fixed overhead components for facilities and infrastructure support
charges. Direct labor costs associated with content production services are
deferred until revenue is recognized, at which time they are expensed as cost of
revenue. Cost of professional services consists of direct labor costs associated
with providing professional services, which are deferred until revenue is
recognized, at which time they are expensed as cost of revenue.

Software licenses and maintenance. Cost of software licenses and maintenance was
$348,000 in the three months ended September 30, 2000 compared to $176,000 for
the same period in 1999. The increase in expense primarily reflects costs
associated with additional customer support personnel and product training
expenses incurred in anticipation of the release of the ECS 6.0 in August 2000.
Less than 10% of the increase is due to higher software royalty payments. Cost
of software licenses and maintenance was $1,052,000 in the nine months ended
September 30, 2000 compared to $407,000 for the same period in 1999. Over 50% of
the increase in expense compared to the same period in 1999 is due to higher
software royalty payments associated with increased software license revenue.
The remainder of the increase reflects costs associated with additional customer
support personnel.

Content production services. Cost of content production services increased 8% to
$1.6 million for the three months ended September 30, 2000 compared to $1.5
million for the same period in 1999. The increase in expense, both in absolute
dollars and as a percentage of content production revenue, primarily reflects
costs associated with additional production personnel and related facilities and
infrastructure costs. Cost of content production increased 11% to $4.3 million
for the nine months ended September 30, 2000 compared to $3.9 million for the
same period in 1999. The absolute increase in content production costs for the
nine months ended September 30, 2000 compared to the same period in 1999
primarily reflects costs associated with additional


                                      13.
<PAGE>   14

production personnel and related facilities and infrastructure costs. Cost of
content production as a percentage of revenue was the same for both of the
periods. In 1999 we initiated efforts to more closely manage the correlation of
our direct labor force with content production volume. Additionally, several
efficiency measures were introduced subsequent to June 30, 1999, including
initiating content production on an event-only basis only after all customer
materials are received, parallel processing paths for certain production
activities, electronic exchange with customers for revisions of certain event
elements, greater workflow and document integration with our automated event
management system to minimize paper documents, and earlier production
involvement in the post-sales process to clearly delineate customer
requirements. These restructuring initiatives yielded higher production
efficiency, including faster content production turn-times and higher production
capacity through June 2000. Although we continue our efforts to manage the
correlation of our direct labor force with content production volume, expense
levels for personnel and infrastructure are committed in advance of customer
orders. The decrease in content production revenue to $1.8 million for the three
months ended September 30, 2000 from $2.7 million for the three months ended
June 30, 2000 and from $2.6 million for the three months ended March 31, 2000,
resulted in excess committed production costs that could not be eliminated.

Professional services. The professional services department was established in
mid-February 1999. Cost of professional services was $340,000 for the three
months ended September 30, 2000 compared to $319,000 for the same period in
1999. For the nine months ended September 30, 2000 the cost of professional
services was $1.6 million compared to $783,000 for the same period in 1999. The
increase in expenses for both periods is due to higher personnel and recruiting
costs associated with growth of our professional services offerings.

Operating expenses. For the three months ended September 30, 2000, operating
expenses were $10.1 million compared to $4.7 million for the same period in
1999. Without the effect of stock-based compensation charges, operating expenses
for the three months ended September 30, 2000 and 1999 would have been $9.2
million and $3.4 million, respectively. For the nine months ended September 30,
2000 operating expenses were $28.5 million compared to $13.0 million for the
same period in 1999. Without the effect of stock-based compensation, operating
expenses for the nine months ended September 30, 2000 and 1999 would have been
$23.1 million and $9.7 million, respectively.

Research and development. Research and development expenses consist primarily of
personnel expenses associated with software development. Research and
development expenses were $1.6 million for the three months ended September 30,
2000 compared to $467,000 for the same period in 1999. Over 80% of this increase
in expenses is associated with additional personnel dedicated to developing
future versions of our software products. For the nine months ended September
30, 2000 research and development expenses were $3.8 million compared to $1.4
million for the same period in 1999. In addition to the new personnel, the
increase in expenses also reflects additional facilities costs associated with
the expanding organization including an office in Boulder, Colorado. We expect
research and development expenses to increase in absolute dollars as we seek to
increase the functionality of our solutions platforms.

Sales and marketing. Sales and marketing expenses consist primarily of personnel
expenses associated with the sale of our products and services, personnel and
marketing materials and other expenses associated with the marketing of our
products and services. Sales and marketing expenses were $6.2 million for the
three months ending September 30, 2000 compared to $2.0 million for the three
months ending September 30, 1999. Higher personnel costs and additional travel
costs associated with the increase in personnel accounted for approximately 70%
of the increase. Sales and marketing expenses were $15.7 million for the nine
months ended September


                                      14.
<PAGE>   15

30, 2000 compared to $5.7 million for the nine months ended September 30, 1999.
Approximately 75% of the increase was due to higher personnel expenses and
recruiting costs associated with growth in our sales force and marketing staff
as well as the additional travel costs associated with the increase in
personnel. New marketing programs accounted for approximately 10% of the
increase in both the three and nine month periods. We expect sales and marketing
expenses in absolute dollars to approximate current levels in the next quarter.

General and administrative. General and administrative expenses consist
primarily of administrative personnel expenses, professional fees and facilities
costs. General and administrative expenses were $1.4 million for the three
months ended September 30, 2000 compared to $915,000 for the same period in
1999. For the nine months ending September 30, 2000 general and administrative
expenses were $3.6 million compared with $2.6 million for the same period in
1999. Over 40% of the increase in expenses for the three months ended September
30, 2000 compared to the same period in 1999 is attributable to growth in
administrative personnel to support the Company's continued growth. Of the
remainder of the increase, approximately 25% is associated with professional
services fees and approximately 35% represents an increase to the allowance for
doubtful accounts.

Interest expense and other charges. Interest expense and other charges were
$135,000 for the three months ended September 30, 2000 and $221,000 for the
three months ended September 30, 1999. Interest expense and other charges for
the three months ended September 30, 2000 consist primarily of interest payments
on equipment leases and amortization of charges related to a bank line of
credit. Interest expense and other charges for the same period in 1999 also
include interest payments on a bank line of credit.

Interest expense and other charges for the nine months ended September 30, 2000
were $1.4 million, an increase of 229% over the same period in 1999. Interest
expense and other charges for the nine months ended September 30, 2000 consist
primarily of interest paid and the amortization of the debt issuance costs and
the discount related to the $20.0 million subordinated notes and warrants. The
subordinated notes were repaid upon our initial public offering. The majority of
the increase in expense for the nine months ended September 30, 2000 compared to
the nine months ended September 30, 1999 reflects interest costs associated with
the $20.0 million subordinated notes.

Interest income and other income. Interest income and other income consist
primarily of interest earnings on our cash, cash equivalents and short-term
investments. Interest income and other income was $838,000 for the three months
ended September 30, 2000 compared to $35,000 for the three months ended
September 30, 1999. Interest income and other income for the nine months ended
September 30, 2000 was $2.3 million compared to $123,000 for the same period in
1999. In both periods, the increase was due to larger average cash balances as a
result of our initial public offering.

Extraordinary loss on extinguishment of debt. In October 1999, Eloquent sold
convertible notes and detachable warrants to purchase 1,500,000 shares of common
stock for aggregate gross consideration of $20.0 million. In conjunction with
the sale of the notes, Eloquent incurred approximately $1.5 million in debt
issuance costs. In accordance with applicable accounting rules, we allocated the
gross proceeds among the notes, the beneficial conversion feature of the notes,
and the warrants. As a result of that allocation, the subordinated notes were
originally recorded on our balance sheet at a discounted value of approximately
$7.5 million. The $7.5 million discount resulting from the issuance of warrants
was being amortized over the five-year term of the notes and the $5.0 million
discount resulting from the beneficial conversion feature was being amortized
over the period from issuance to December 31, 2000, during which the note could
not be converted. In accordance with the terms of the notes, all amounts
outstanding under


                                      15.
<PAGE>   16

the notes were repaid upon consummation of our initial public offering. Because
the notes were repaid prior to the end of their term, the unamortized portion of
the discount resulting from the issuance of the warrants and debt issuance costs
was recorded as an extraordinary loss on extinguishment of debt.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations through private sales of
Preferred Stock, our initial public offering of Common Stock and, to a lesser
extent, borrowings under lines of credit. Net proceeds from our initial public
offering of Common Stock were approximately $75.7 million. At September 30,
2000, we had approximately $48.1 million of cash equivalents and short-term
investments. We have capital lease arrangements that provide for up to $1.5
million for equipment purchases, of which we have utilized approximately
$437,000 as of September 30, 2000. In addition, we have a revolving line of
credit and debt facility that provides for borrowings of up to $6.0 million for
working capital requirements and equipment purchases.

Net cash used in operating activities was $11.7 million for the nine months
ended September 30, 2000 and $6.4 million for the nine months ended September
30, 1999. Net cash used in operating activities in both periods was primarily
attributable to net losses.

Net cash used in investing activities was $45.6 million for the nine months
ended September 30, 2000 and $337,000 for the nine months ended September 30,
1999. Net cash used in investing activities in 2000 was related primarily to
investments in short-term marketable securities. Net cash used in investing
activities in 1999 was primarily related to purchases of property and equipment.

Net cash provided by financing activities was $52.8 million for the nine months
ended September 30, 2000 and $3.6 million for the nine months ended September
30, 1999. Net cash provided by financing activities in 2000 resulted primarily
from the sale of common stock in our initial public offering, partially offset
by repayment of borrowings. Net cash provided by financing activities in 1999
resulted primarily from borrowings under our lines of credit.

We believe that our current cash and cash equivalents will be sufficient to meet
our anticipated cash needs for working capital and capital expenditures for at
least the next 12 months. We may need to raise additional funds thereafter
through public or private financings, or other arrangements. There can be no
assurance that such additional financings, if needed, will be available on terms
attractive to us, if at all. Our failure to raise capital when needed could have
a material adverse effect on our business, financial condition and operating
results. If additional funds are raised through the issuance of equity
securities, the percentage ownership of our then-current, stockholders would be
reduced. Furthermore, such equity securities may have rights, preferences or
privileges senior to those of common stock.

RISK FACTORS

Our business, financial condition or operating results could be seriously harmed
by any of the following risks. In addition, the trading price of our common
stock could decline due to any of the following risks, and you may lose all or
part of your investment.

RISKS RELATED TO OUR BUSINESS


                                      16.
<PAGE>   17

BECAUSE WE HAVE A LIMITED OPERATING HISTORY, IT MAY BE DIFFICULT FOR YOU TO
EVALUATE OUR BUSINESS AND PROSPECTS.

Eloquent was formed in March 1995. Thus, we have a limited operating history,
which may make it difficult for you to evaluate our business. In part because we
are subject to the risks, expenses and uncertainties frequently encountered by
companies in new and rapidly evolving technology and Web-related markets, we
cannot be sure that our business model and future operating performance will
yield the results that we seek. Moreover, because these markets are constantly
changing, we may need to change our business model to adapt. We have not yet
proven our ability, on a sustained basis, to achieve the following:

    o    maintain and expand our customer base;

    o    identify new applications for our existing products;

    o    expand and enhance our customer solutions;

    o    maintain market prices for our solutions despite competition;

    o    effectively integrate any acquired businesses or technologies with our
         operations;

    o    prevent technologies we use in our operations from failing or operating
         poorly, and

    o    identify, attract, retain and motivate qualified personnel.

We may not be successful in achieving these objectives on a long-term basis. If
we are unable to do so, our business, financial condition and operating results
would suffer.

WE EXPECT TO CONTINUE TO INCUR LOSSES, AND AS A RESULT WE MAY NOT ACHIEVE
PROFITABILITY.

We have not achieved profitability on a quarterly or annual basis to date and we
anticipate that we will continue to incur net losses for the foreseeable future.
Our failure to achieve profitability could deplete our current capital resources
and reduce our ability to raise additional capital. We incurred net losses of
approximately $29.1 million in the nine months ended September 30, 2000 compared
to $10.0 million in the nine months ended September 30, 1999. As of September
30, 2000, we had an accumulated deficit of approximately $63.9 million. We
expect to increase our operating expenses significantly, expand our sales and
marketing operations and continue to develop and expand our service offerings.
If these increased expenses are not accompanied by increased revenue, we will
not achieve profitability.

OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS, AND AN
UNANTICIPATED DECLINE IN REVENUE MAY CAUSE OUR STOCK PRICE TO FALL.

In some future quarter, our operating results may be below the expectations of
public market analysts and investors, which would cause the price of our common
stock to fall. The factors that may cause our quarterly operating results to
fall short of expectations include:

    o    delays of large customer orders, which could prevent us from
         recognizing revenue until later quarters;

    o    seasonal trends in sales of our solutions, which could result in lower
         quarterly revenue in the fourth quarter;


                                      17.
<PAGE>   18

    o    downward pressure on prices paid by our customers, as a result of
         competition or other factors, which could reduce our quarterly revenue
         even if we maintain or increase the number of sales;

    o    new product and service introductions by our competitors, which could
         cause our competitors to capture revenue that we otherwise could have
         received;

    o    increased costs incurred as we expand operations, increase our
         marketing efforts or undertake other initiatives, which could reduce
         our profit margin if not matched by a corresponding growth in revenue;
         and

    o    technical difficulties or system downtime affecting the Web generally
         or the operation of our network or servers, which could cause customer
         dissatisfaction and reduce our revenue.

We have experienced and expect to continue to experience seasonality in our
business. Due to the marketing cycles of our customers, sales of our content
production services generally tend to be lower in the fourth calendar quarter of
each year. Because the market for rich media business-to-business communications
using the Web is still new, additional seasonal and other patterns in the usage
of our products and services may emerge as the market matures.

Our quarterly operating results may fluctuate significantly in the future
because of a variety of factors, many of which are outside our control. As a
result, operating results for any particular quarter may not be indicative of
future operating results.

WE DEPEND ON A LIMITED NUMBER OF LARGE CUSTOMERS FOR A MAJORITY OF OUR REVENUE,
SO THE LOSS OF OR DELAY IN PAYMENT FROM ONE OR A SMALL NUMBER OF CUSTOMERS COULD
HAVE A LARGE IMPACT ON OUR REVENUE AND OPERATING RESULTS.

If we were to lose a key customer, our business, financial condition and
operating results would suffer. In addition, if a key customer fails to pay
amounts it owes us, or does not pay those amounts on time, our revenue and
operating results would suffer. A limited number of large customers have
accounted for a majority of our revenue and will continue to do so for the
foreseeable future. For example, our top 15 customers during the nine months
ended September 30, 2000 accounted for a majority of our revenue during that
period. Due to our limited number of large customers, the cancellation or delay
of a customer order during a given quarter is likely to significantly reduce
revenue for the quarter.

THE LENGTH OF OUR SALES CYCLE IS UNCERTAIN AND THEREFORE COULD CAUSE SIGNIFICANT
VARIATIONS IN OUR OPERATING RESULT.

Because our customers are typically large corporations, the length of our sales
cycle -- the time between an initial customer contact and completing a sale --
can be unpredictable. The time between the date of our initial contact with a
potential new customer and the execution of a sales contract with that customer
ranges from less than two weeks to more than three months, depending on the size
of the customer, the application of our solution and other factors. Our sales
cycle is also subject to delays as a result of customer-specific factors over
which we have little or no control, including budgetary constraints and internal
acceptance procedures. During the sales cycle, we may expend substantial sales
and management resources without generating corresponding revenue. Our expense
levels are relatively fixed in the short term and are based in part on our
expectations of our future revenue. As a result, any delay in our sales cycle
could cause significant variations in our operating results, particularly
because a relatively small number of customer orders represents a large portion
of our revenue.


                                      18.
<PAGE>   19

WE MAY NOT BE ABLE TO INCREASE THE SIZE OF OUR SALES ORGANIZATION, WHICH WOULD
PREVENT US FROM ACHIEVING THE INCREASED SALES VOLUME NECESSARY FOR US TO ACHIEVE
PROFITABILITY.

In order to increase our revenue, we must recruit, train and retain a
significant number of sales personnel. If we do not do so, we will not be able
to increase our sales sufficiently to achieve profitability. In the past, we
have had difficulty recruiting and retaining qualified sales personnel. We
cannot guarantee that we will not encounter similar difficulties in the future.
Competition for personnel, particularly in the San Francisco Bay Area, where we
are located, is intense. Many of the companies competing with us for qualified
sales personnel are larger and more established than we are and have greater
financial resources than we do. This may make it even more difficult for us to
recruit and retain such personnel.

Our operational history suggests that the level of sales we achieve is generally
determined by the number of sales personnel we employ. In 1998 and early 1999,
we suffered a significant decline in sales to customers in the western United
States primarily due to attrition in our West Coast sales force. If we
experience turnover in our sales force in the future, our business, financial
condition and operating results will suffer. Newly hired sales personnel
generally do not become fully productive until they have worked for at least two
quarters. Because of the time required to recruit new sales personnel and for
them to become fully productive, an unanticipated loss of sales personnel could
result in an under productive sales organization and reduced sales for a
significant period of time.

WE FACE INTENSE COMPETITION FOR PERSONNEL, WHICH COULD IMPAIR OUR ABILITY TO
RECRUIT AND RETAIN KEY PERSONNEL.

Our ability to develop, market and sell our solutions and to maintain our
competitive position depends on our ability to attract, retain and motivate
highly skilled technical, sales and marketing and other personnel. There is a
limited number of people with the necessary technical skills and understanding,
and competition for their services, particularly in the San Francisco Bay Area,
is intense. If we fail to recruit or retain these personnel, our ability to
develop, market and sell our solutions will suffer.

WE DEPEND ON TECHNOLOGY LICENSED FROM OTHER COMPANIES. WE MAY NOT BE ABLE TO
RENEW THESE LICENSES AS THEY EXPIRE FROM TIME TO TIME, AND WE MAY NOT BE ABLE TO
REPLACE THE LICENSED TECHNOLOGY WITHOUT SIGNIFICANT EXPENSE OR ENGINEERING
EFFORTS, IF AT ALL.

Our desktop player software, which runs on an end user's personal computer to
allow the user to view an event, and our Enterprise Communications Server
product, which enables customers to deliver events to their target audiences
through Web-based channels, include technologies that other companies have
licensed to us. If we are unable to maintain or renew these licenses when they
expire, we would be forced to remove these technologies from our products and
develop or license comparable technologies. This could require additional
license fees or extensive engineering efforts, or significantly decrease our
products' functionality, either of which could harm our business, financial
condition and operating results.

In addition, we have developed our products to integrate well with the Microsoft
Windows NT operating system, the operating system used by most of our customers
to run our software. If the Windows NT operating system is changed by Microsoft
so that it no longer integrates well with our products, or if Windows NT
experiences technical problems, the operation of our software could be impaired.
In that event, our business, financial condition and operating results could be
harmed. Microsoft is not obligated to ensure that Windows NT integrates well
with our products.


                                      19.
<PAGE>   20

We may be required to obtain licenses from third parties to refine, develop,
market and deliver new products. We may be unable to obtain any needed license
on commercially reasonable terms or at all and rights granted under any licenses
may not be valid and enforceable.

WE OPERATE IN MARKETS THAT WILL BECOME INCREASINGLY COMPETITIVE, WHICH COULD
LEAD TO DECREASING PRICES AND REDUCED PROFITABILITY.

The market for rich media business-to-business communications solutions is new
and rapidly evolving. We expect that competition will intensify. Increased
competition could lead to decreasing prices and profitability. We compete with
companies that offer components of a rich media business-to-business
communications solution, including:

o    providers of rich media software tools;

o    multimedia content production and delivery companies;

o    companies that provide content hosting services, which include storing,
     delivering and tracking the distribution of content; and

o    traditional business-to-business communications and learning solution
     companies that offer live meeting and seminar services.

In addition, our customers and potential customers represent a source of
competition to the extent they decide to develop in-house business-to-business
communications solutions.

Many of our current and potential competitors have longer operating histories,
significantly greater financial, technical and marketing resources, greater name
recognition and larger existing customer bases than we do. These competitors may
also be able to undertake more extensive marketing campaigns for their brands
and services, adopt more aggressive pricing policies and make more attractive
offers to potential employees and partners. We may be unable to compete
successfully against current or future competitors, and competitive pressures
may cause our business to suffer.

MOST OF OUR MANAGEMENT TEAM HAS ONLY RECENTLY JOINED ELOQUENT AND HAS LITTLE
EXPERIENCE WORKING TOGETHER, WHICH COULD LIMIT THE TEAM'S EFFECTIVENESS IN
OPERATING OUR BUSINESS.

Our management team does not have significant experience working together at
Eloquent, because most members of our management team have been employed by
Eloquent for a short period of time. This could prevent or limit our management
team's ability to work together effectively. The failure of our new management
team to work together effectively could delay efficient decision-making and
execution of business objectives, which would negatively impact our business,
financial condition and operating results.

WE MAY NOT BE ABLE TO ADEQUATELY MANAGE OUR ANTICIPATED GROWTH, WHICH COULD
IMPAIR OUR EFFICIENCY AND NEGATIVELY IMPACT OUR OPERATIONS.

We may not be able to manage our growth effectively, which could impair our
efficiency, reduce the quality of our solutions, impair further growth and harm
our business, financial condition and operating results. If we do not
effectively manage this growth, we will not be able to operate efficiently or
maintain the quality of our products. Either outcome would harm our operating
results. In the past, we have experienced rapid growth, and we plan to continue
to expand our operations. This expansion is expensive and places a significant
strain on our personnel and other resources. To manage our expanded operations
effectively, we will need to further improve our


                                      20.
<PAGE>   21

operational, financial and management systems and successfully hire, train,
motivate and manage our employees.

WE PLAN TO EXPAND OUR BUSINESS INTO INTERNATIONAL MARKETS, IN WHICH WE HAVE NO
PRIOR EXPERIENCE. INTERNATIONAL EXPANSION WILL REQUIRE SIGNIFICANT RESOURCES AND
WILL SUBJECT US TO NEW RISKS THAT MAY LIMIT OUR RETURN FROM OUR INTERNATIONAL
SALES EFFORTS.

One of our strategies to increase our sales sufficiently to achieve
profitability is to add an international sales force and operations. This
expansion will involve a significant use of management and financial resources,
particularly because we have no previous experience with international
operations. We may not be successful in creating international operations or
sales. In addition, international business activities are subject to a variety
of risks, including the adoption of laws, currency fluctuations, actions by
third parties and political and economic conditions, any of which could restrict
or eliminate our ability to do business in foreign jurisdictions.

WE WILL DEPEND ON REVENUE FROM OUR CONTENT HOSTING BUSINESS, WHICH WILL SUFFER
IF OUR HOSTING EQUIPMENT AND SOFTWARE EXPERIENCE SYSTEM FAILURES.

Our future success depends in part on our ability to successfully host our
customers' content on our servers. Our ability to host content will depend on
the efficient and uninterrupted operation of our computer and communications
hardware and software systems. We do not have fully redundant content hosting
systems, a formal disaster recovery plan or alternative providers of hosting
services. We also may not have business interruption insurance sufficient to
compensate us for losses that may occur. All of our content hosting servers are
located at Concentric Network Corporation's facilities in Cupertino, California.
These systems and operations are vulnerable to damage or interruption from
earthquakes, floods, fires, power loss, telecommunication failures or similar
events. They are also subject to computer viruses, break-ins, sabotage,
intentional acts of vandalism and similar misconduct. Despite any precautions we
may take, the occurrence of a natural disaster or other unanticipated problems
at the Concentric Network facility could result in interruptions in our content
hosting service. In addition, the failure by Concentric Network to provide the
data communications capacity that we require could result in interruptions in
our content hosting service. Any damage to or failure of our content hosting
systems could result in interruptions in our content hosting service. System
interruptions will reduce our revenue and profits, and our future revenue and
profits will be harmed if our customers believe that our content hosting system
is unreliable.

POTENTIAL ERRORS IN OUR SOFTWARE COULD HARM OUR REPUTATION AND REDUCE OUR SALES
AND PROFITABILITY.

Software defects discovered after we release our software could result in loss
of revenue, delays in market acceptance and harm to our reputation. Any product
liability claim against us, if successful and of sufficient magnitude, could
harm our profitability and future sales. Our software has in the past contained,
and may in the future contain, "bugs" or errors. Although we typically design
our customer license agreements to contain provisions that limit our exposure to
potential product liability claims, we cannot guarantee that contractual
limitations of liability would be enforceable or would otherwise protect us from
liability for damages to a customer resulting from a defect in our software.
Even though we maintain insurance that covers damages arising from the
implementation and use of our software, we cannot assure you that our insurance
would cover or be sufficient to cover any product liability claims against us.


                                      21.
<PAGE>   22

WE HAVE IN THE PAST EXPERIENCED RETURNS OF OUR PRODUCTS, AND AS OUR BUSINESS
GROWS WE MAY EXPERIENCE INCREASED RETURNS, WHICH COULD HARM OUR REPUTATION AND
NEGATIVELY IMPACT OUR OPERATING RESULTS.

In the past, some of our customers have returned our rich media events to us
because they felt that modifications were required for the product to meet
project specifications and the customer's requirements. It is likely that we
will experience some level of returns in the future and, as our business grows,
the amount of returns may increase despite our efforts to minimize returns.
Also, returns may adversely affect our relationship with affected customers and
may harm our reputation. This could cause us to lose potential customers and
business in the future. We maintain a reserve for future returns that we believe
is adequate given our historical level of returns. If returns increase, however,
our reserve may not be sufficient and our operating results would be negatively
affected.

THE FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY MAY IMPAIR OUR COMPETITIVE
POSITION.

Our copyrights, service marks, trademarks, trade secrets, proprietary technology
and similar intellectual property are critical to our success. If we are unable
to adequately protect our rights from infringement by competitors or others, or
from misuse by our licensees, the competitive advantage that our rights provide
will be weakened.

We rely on trademark and copyright law, trade secret protection and
confidentiality and license agreements with our employees and independent
contractors to protect our proprietary rights. We strategically pursue the
registration of trademarks and service marks in the United States and abroad.
Effective trademark, service mark, copyright and trade secret protection may not
be available in every country in which our products and services are made
available.

We have licensed in the past, and expect to license in the future, certain of
our proprietary rights to third parties. The steps taken by us to protect our
proprietary rights may not be adequate. Although we attempt to ensure that the
quality of our brand is maintained by these licensees, licensees may take
actions that may harm the value of our proprietary rights or reputation.

WE MAY BECOME SUBJECT TO INTELLECTUAL PROPERTY LITIGATION IN THE FUTURE THAT
COULD CAUSE US TO INCUR SIGNIFICANT EXPENSE AND COULD REQUIRE US TO ALTER OUR
PRODUCTS.

We may be subject to legal proceedings and claims associated with our
intellectual property from time to time in the future. These claims, even if
without merit, could cause us to expend significant financial and managerial
resources. Further, if these claims are successful, we may be required to change
our trademarks, alter our copyrighted material or pay financial damages, any of
which could harm our business. Third parties may infringe or misappropriate our
copyrights, trademarks or similar proprietary rights in the future. In such
event, we may be forced to pursue infringement claims against such third
parties. These claims also could cause us to expend significant financial and
managerial resources.

RISKS RELATED TO THE INTERNET

OUR FUTURE SUCCESS DEPENDS ON CONTINUED GROWTH IN USE OF THE WORLD WIDE WEB FOR
BUSINESS-TO-BUSINESS COMMUNICATIONS.

Our business could suffer if Web usage does not continue to grow. Web usage may
be inhibited for a number of reasons, including:


                                      22.
<PAGE>   23

    o    inadequate network infrastructure;

    o    security concerns;

    o    inconsistent quality of service;

    o    lack of availability of cost-effective and high-speed service; and

    o    changes in government regulation of the Web.

If Web usage grows, the Web infrastructure may not be able to support the
demands placed on it by this growth, or its performance and reliability may
decline. In addition, future outages and other interruptions occurring
throughout the Web could lead to decreased use of our products and would
therefore harm our business.

IF WE ARE UNABLE TO KEEP UP WITH THE RAPID TECHNOLOGICAL CHANGES THAT
CHARACTERIZE THE WEB, OUR BUSINESS WOULD SUFFER.

Our future success will depend on our ability to continually improve our
solutions. To do so, we will need to continually enhance our solutions in
response to the rapid technological developments, evolving industry standards
and user demands, and frequent new product introductions and enhancements that
characterize the market for Web products and services. In the event new
multimedia enabling technologies are developed and widely adopted, we may be
required to make fundamental and costly changes in our technology. We may not be
able to make these enhancements or changes in a cost-effective manner fast
enough to keep up with our competitors or at all. In this event, our business
would suffer.

RISKS RELATED TO OUR COMMON STOCK

OUR STOCK PRICE HAS BEEN EXTREMELY VOLATILE IN THE PAST AND IS LIKELY TO BE
EXTREMELY VOLATILE IN THE FUTURE, WHICH COULD CAUSE YOU TO LOSE ALL OR A PART OF
YOUR INVESTMENT AND MAY RESULT IN COSTLY AND DISTRACTING SECURITIES LITIGATION.

The market price of our common stock has been volatile in the past and is likely
to be extremely volatile in the future. In the past, following periods of
volatility in the market price of a company's securities, securities class
action litigation has often been instituted against such a company. Securities
litigation could result in substantial costs and a diversion of our management's
attention and resources. The stocks of Web-related and technology companies like
ours have experienced extreme price and volume fluctuations in recent months,
many of which appear unrelated to the companies' business, financial condition
or operating results. Although the market price of our stock will in part be
based on our business, financial condition and operating results, we expect that
it will also be affected to a significant degree by these market-wide and
industry-wide price and volume fluctuations.

OUR DIRECTORS AND EXECUTIVE OFFICERS OWN A MAJORITY OF OUR COMMON STOCK, WHICH
ENABLES THEM TO CONTROL MATTERS DECIDED BY THE STOCKHOLDER.

Our directors and executive officers and their affiliates beneficially own a
majority of our outstanding common stock. As a result of their beneficial
ownership, our directors and executive officers, acting alone or with others,
are able to control most matters requiring stockholder approval, including the
election of directors and approval of significant transactions. This
concentration of ownership may also have the effect of delaying or preventing a
change in control


                                      23.
<PAGE>   24

of Eloquent. This could prevent our stockholders from realizing a premium over
the market price for their shares or from bringing about a change in management.

THE LARGE NUMBER OF SHARES THAT MAY BE RESOLD IN THE PUBLIC MARKET COULD CAUSE
OUR STOCK PRICE TO DECLINE.

As our shares become eligible for public resale, the market price of our common
stock may drop if the holders of these shares sell them or are perceived by the
market as intending to sell them. Most of the shares we have outstanding or
issuable upon exercise of options or warrants will become eligible for public
resale 180 days after the closing of our initial public offering, in August
2000. For a more detailed description of the eligibility of the outstanding
shares of our common stock for resale in the public market, see our Registration
Statement filed with the SEC, SEC File No. 333-89537.

ADDITIONAL DISCUSSION OF THESE AND OTHER RISK FACTORS IS DISCLOSED IN OUR
REGISTRATION STATEMENT ON FORM S-1, AS AMENDED, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, SEC FILE NO. 333-89537.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Our exposure to market risk is limited to interest income sensitivity, which is
affected by changes in the general level of U.S. interest rates, particularly
because the majority of our investments are in short-term debt securities issued
by corporations. We place our investments with high-quality issuers and limit
the amount of credit exposure to any one issuer. Due to the nature of our
short-term investments, we believe that we are not subject to any material
market risk exposure. We do not have any foreign currency or other derivative
financial instruments.


                                      24.
<PAGE>   25

PART II:   OTHER INFORMATION

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

Use of Proceeds from Sales of Registered Securities. We commenced our initial
public offering on February 16, 2000 pursuant to a Registration Statement on
Form S-1 (the "Registration Statement") (File No. 333-89537). The managing
underwriters of the public offering were U.S. Bancorp Piper Jaffray, Banc of
America Securities LLC and Thomas Weisel Partners (the "Underwriters"). In the
offering, we sold an aggregate of 5,175,000 shares of our common stock for an
initial price of $16.00 per share. The aggregate proceeds from the offering were
$82.8 million. We paid expenses of approximately $7.1 million, of which
approximately $5.8 million represented underwriting discounts and commissions
and approximately $1.3 million represented expenses related to the offering. Net
proceeds from the offering were $75.7 million. Of the net proceeds, as of
September 30, 2000, approximately $3.0 million has been used to repay existing
indebtedness owed under our existing credit facility, approximately $20.0
million has been used to repay the subordinated notes we issued in October 1999,
approximately $3.0 million has been invested in a strategic partner and the
remainder has been used for working capital and for general corporate purposes.
The use of the proceeds from the offering does not represent a material change
in the use of proceeds described in our Registration Statement. As of September
30, 2000, we had invested the remainder of the net proceeds in short-term,
interest-bearing, investment grade securities.

ITEM 5.  OTHER INFORMATION

On November 2, 2000, the Company announced that its founder and current
Chairman, Cliff Reid, was returning as the company's Chief Executive Officer
effective November 1, 2000. Reporting to Cliff Reid there will be a newly formed
"Office of the President" consisting of Alan Atlas, Senior Vice President of
Products and Operations, John Curson, Chief Financial Officer, David Glazer,
Chief Technology Officer and Gary Laney, Vice President of Sales. Abe Kleinfeld,
formerly Eloquent's President and Chief Executive Officer has resigned, in a
mutual agreement with the Board of Directors, to pursue other opportunities.

In October 2000, Eloquent's Board of Directors adopted a Stockholders Rights
Plan ("Rights Plan") under which all stockholders of record as of November 8,
2000 will receive rights to purchase shares of a new series of Preferred Stock.
The adoption of Rights Plan is intended as a means to guard against abusive
takeover tactics and is not in response to any particular proposal. The rights
will trade with Eloquent's Common Stock, unless and until they are separated
upon the occurrence of certain future events. The rights will be exercisable
only if a person or group acquires 20% or more of Eloquent's Common Stock or
announces a tender offer for 20% or more of the Common Stock. If a person
acquires 20% or more of Eloquent's Common Stock, all rightsholders except the
buyer will be entitled to acquire Eloquent's Common Stock at a discount. The
rights distribution is not taxable to the stockholders. Eloquent's Board of
Directors may terminate the Rights Plan at any time or redeem the rights prior
to the time a person acquires more than 20% of Eloquent's Common Stock.

In October 2000, Eloquent and Rebop Media, Inc. ("Rebop"), a new live Web
conferencing company, entered into a strategic relationship whereby Eloquent
invested approximately $1.5 million in Rebop. Eloquent also holds the right,
subject to Eloquent's stockholders approval, to acquire Rebop if Rebop
successfully installs its product in three customer sites. Rebop's Web
conferencing solution will be designed to integrate with Eloquent's ECS. Cliff
Reid, Eloquent's Chief Executive Officer, serves as President and Chief
Executive Officer of Rebop. In the quarter ended September 30, 2000, as the
investment and acquisition agreements were being negotiated, Eloquent provided
operating funds to Rebop under terms of various notes. Upon consummation of the
investment, the notes were repaid. As Eloquent is the primary investor in
Rebop, Rebop's results of operations and financial position will be
consolidated with Eloquent's financial results in future periods. Although
Eloquent's investment in Rebop was not consummated until October, given the
nature of the companies' relationship. Eloquent has recognized the operating
expenses incurred by Rebop as research and development expense in the three
months ended September 30, 2000.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

       (a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER            DESCRIPTION
------            -----------
<S>       <C>
1.01*     Form of Underwriting Agreement.

3.01*     Amended and Restated Certificate of Incorporation.

3.02*     Amended and Restated Bylaws.

3.03*     Form of Amended and Restated Certificate of Incorporation to be filed
          upon completion of this offering.

3.04*     Form of Amended and Restated Bylaws to be effective upon completion of
          this offering.

4.01*     Form of Specimen Stock Certificate.

4.02*     Fourth Amended and Restated Investors' Rights Agreement, dated October
          20, 1999, among Eloquent and certain investors named therein.

4.03*     Securities Purchase Agreement, dated October 20, 1999, by and among
          Eloquent and certain investors named therein.

5.01*     Opinion of Cooley Godward LLP regarding legality of the securities
          being registered.

10.01*    Form of Indemnity Agreement entered into by Eloquent with each of its
          directors and executive officers.

10.02*    Equity Incentive Plan.

10.03*    Form of Stock Option Agreement under the Equity Incentive Plan.

10.04*    1997 Equity Incentive Plan.

10.05*    Form of Stock Option Agreement under the 1997 Equity Incentive Plan.

10.06*    1999 Equity Incentive Plan.

10.07*    Form of Stock Option Agreement under the 1999 Equity Incentive Plan.
</TABLE>


                                      25.
<PAGE>   26

<TABLE>
<S>       <C>
10.08*    Form of Nonstatutory Stock Option Agreement for Non-Employee Director
          Grants under the 1999 Equity Incentive Plan.

10.09*    1999 Employee Stock Purchase Plan.

10.10*    Form of 1999 Employee Stock Purchase Plan Offering.

10.11*    Employment Agreement, dated December 23, 1998, between Eloquent and
          Abraham Kleinfeld.

10.12*    Office Lease, dated November 19, 1996, between Eloquent and California
          Casualty Indemnity Exchange, as amended.

10.13*    OEM Agreement, dated May 30, 1997, between Eloquent and Verity, Inc.

10.14*    Software License Agreement, dated June 30, 1997, between Eloquent and
          Voxware, Inc.

10.15*    Co-location Service Agreement, dated March 30, 1998, between Eloquent
          and Concentric Network Corporation.

10.16*    Sublease Agreement, dated June 1, 1999, between Eloquent and
          California Casualty Indemnity Exchange.

10.17*    ISV Software License Agreement, dated August 1, 1999, between Eloquent
          and WebXpress, Inc.

10.18*    Assignment of Sublease, dated November 24, 1999, between Eloquent and
          California Casualty Management Company.

23.01*    Consent of Cooley Godward LLP (included in Exhibit 5.01).

23.02*    Consent of PricewaterhouseCoopers LLP.

24.01*    Power of Attorney. Reference is made to page II-7.

27.01     Financial Data Schedule.

99.1**    2000 Non-Qualified Stock Plan.

99.2      Agreement and Plan of Merger and Reorganization, dated October 31,
          2000 among Eloquent, Inc., Rebop Acquisition Corp., Rebop Media,
          Inc., and Certain Shareholders of Rebop Media, Inc.


</TABLE>

*  Incorporated by reference to the same numbered exhibit previously filed with
the Company's Regulation Statement on Form S-1 (SEC File No. 333-89537).

** Incorporated by reference to the same numbered exhibit previously filed with
the Company's Registration Statement on Form S-8 (SEC File No. 333-34182).

       (b) Reports on Form 8-K

        On October 26, 2000, Eloquent filed a report on Form 8-K reporting the
        adoption of a stockholder rights plan.

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


Date: November 13, 2000



                                      ELOQUENT, INC.

                                      By: /s/ R. John Curson
                                          --------------------------------------
                                          R. John Curson
                                          Chief Financial Officer, Secretary and
                                          Treasurer (Principal Accounting and
                                          Financial Officer)
<PAGE>   27
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                  DESCRIPTION
-------                                 -----------
<S>             <C>
27.01           Financial Data Schedule

99.2            Agreement and Plan of Merger and Reorganization, dated October
                31, 2000 among Eloquent, Inc., Rebop Acquisition Corp., Rebop
                Media, Inc., and Certain Shareholders of Rebop Media, Inc.
</TABLE>