<PAGE>   1
UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

        For the quarterly period ended MARCH 31, 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

================================================================================

                              NETGENESIS CORP.
             (Exact name of registrant as specified in its charter)

                DELAWARE                                 04-3236862
     (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                  Identification No.)

                            150 CAMBRIDGEPARK DRIVE
                              CAMBRIDGE, MA 02140
          (Address of principal executive offices, including zip code)

                                 (617) 665-9200
              (Registrant's telephone number, including area code)

================================================================================

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

                          Yes    [ ]      No    [X]


        As of MAY 8, 2000, there were 21,058,610 shares of the registrant's
Common Stock outstanding.


<PAGE>   2

                                NETGENESIS CORP.

                                      INDEX

                                                                           Page

PART I. FINANCIAL INFORMATION

    ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
             CONDENSED BALANCE SHEETS
                 AT MARCH 31, 2000 AND DECEMBER 31, 1999                     3

             STATEMENTS OF OPERATIONS
                 FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999          4

             STATEMENTS OF CASH FLOW
                 FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999          5

             NOTES TO UNAUDITED FINANCIAL STATEMENTS                         6

    ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS                         7

    ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     15

PART II. OTHER INFORMATION

    ITEM 1.  LEGAL PROCEEDINGS                                              15

    ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                      15

    ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                16

    ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            16

    ITEM 5.  OTHER INFORMATION                                              16

    ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                               16

SIGNATURES                                                                  17



                                       2
<PAGE>   3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                NETGENESIS CORP.

                            CONDENSED BALANCE SHEETS

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 MARCH 31,     DECEMBER 31,
                                                                   2000           1999
                                                                 ---------     ------------
<S>                                                              <C>            <C>
      ASSETS
      Current assets:
        Cash and cash equivalents...........................     $ 20,536       $  9,643
        Restricted cash.....................................          404           404
        Short-term investments and marketable securities....       52,530          1,184
        Accounts receivable, net............................        3,783          2,457
        Prepaid expenses and other current assets...........          576            137
                                                                 --------       --------
          Total current assets..............................       77,829         13,825
      Marketable securities.................................        9,028            --
      Fixed assets, net.....................................        5,464          3,697
      Other assets..........................................          326            270
                                                                 --------       --------
          Total assets......................................     $ 92,647       $ 17,792
                                                                 ========       ========
      LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
        STOCKHOLDERS' EQUITY (DEFICIT)

      Current liabilities:
        Current portion of capital lease obligations........          184            163
        Current portion of long-term debt...................        1,218          1,163
        Accounts payable....................................        1,269            800
        Accrued expenses....................................        2,718          2,963
        Deferred revenue....................................        1,278          1,383
                                                                 --------       --------
          Total current liabilities.........................        6,667          6,472
      Long-term portion of capital lease obligations........          825            323
      Long-term debt........................................        1,048          1,569
                                                                 --------       --------
          Total liabilities.................................        8,540          8,364
                                                                 --------       --------
      Redeemable convertible preferred stock................           --         36,575
                                                                ---------       --------
      Stockholders' equity (deficit):
        Convertible preferred stock, Series A-1, $.001 par
         value; 200,000 shares authorized, issued and
         outstanding at December 31, 1999...................           --             49
        Convertible preferred stock, Series A-2, $.001 par
         value; 101,430 shares authorized, issued and
         outstanding at December 31, 1999...................           --            137
        Convertible preferred stock, Series A-3, $.001 par
         value; 624,000 shares authorized, issued and
         outstanding at December 31, 1999...................           --          1,531
        Common stock, $.001 par value; 100,000,000 shares
         authorized; 21,046,612 and 3,141,883 issued and
         outstanding at March 31, 2000 and December 31,
         1999, respectively.................................           24              3
        Additional paid-in capital..........................      128,558          6,606
        Deferred compensation...............................       (7,522)        (5,723)
        Note receivable from stockholder....................          (96)           (96)
        Accumulated deficit.................................      (36,943)       (30,838)
        Accumulated other comprehensive income..............           86          1,184
                                                                 --------       --------
          Total stockholders' equity (deficit)..............       84,107        (27,147)
                                                                 --------       --------
          Total liabilities, redeemable convertible preferred
             stock and stockholders' equity (deficit).......     $ 92,647       $ 17,792
                                                                 ========       ========
</TABLE>

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



                                       3
<PAGE>   4


                                NETGENESIS CORP.
                            STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                            ---------------------
                                                            MARCH 31,   MARCH 31,
                                                              2000        1999
                                                            ---------   ---------
<S>                                                         <C>          <C>
     Revenue:
       Product revenue ................................     $ 2,082      $   468
       Service revenue ................................       1,682          354
                                                            -------      -------
          Total revenue ...............................       3,764          822
                                                            -------      -------
     Cost of revenue:
       Cost of product revenue ........................         128           31
       Cost of service revenue (excluding stock-based
         compensation  of $95 and $1 for  the  three
         months ended March 31, 2000 and 1999,
         respectively) ................................       1,802          417
                                                            -------      -------
         Total cost of revenue ........................       1,930          448
                                                            -------      -------
     Gross profit .....................................       1,834          374
                                                            -------      -------
     Operating expenses:
       Sales and marketing (excluding stock-based
         compensation  of $489 and $8 for the three
         months ended March 31, 2000 and 1999,
         respectively) ................................       4,080        1,600
     Research and development (excluding
         stock-based compensation  of $83 and $4 for the
         three months ended March 31, 2000 and 1999,
         respectively) ................................       2,477          789
     General and administrative (excluding
         stock-based compensation  of $102 and $0 for
         the three months ended March 31, 2000 and 1999
         respectively) ................................       1,682          497
     Stock-based compensation .........................         769           13
                                                            -------      -------
          Total operating expenses ....................       9,008        2,899
                                                            -------      -------
     Loss from operations .............................      (7,174)      (2,525)
     Other income (loss):
       Interest and other income (loss), net ..........         363          (53)
       Gain on sale of short-term investments and
       marketable securities ..........................       1,148         --
                                                            -------      -------
     Net loss .........................................     $(5,663)     $(2,578)
                                                            -------      -------
     Dividends and accretion of redeemable preferred
       stock ..........................................        (442)        (220)
                                                            -------      -------
     Net loss available to common stockholders ........     $(6,105)     $(2,798)
                                                            =======      =======
     Basic and diluted net loss available to common
       stockholders per share .........................     $ (0.73)     $ (3.34)
                                                            =======      =======
     Shares used in computing  basic and diluted net
       loss available to common stockholders per share        8,366          837

     Pro forma basic and diluted net loss per common
       share...........................................     $ (0.34)     $ (0.30)
                                                            =======      =======
     Shares used in computing pro forma basic and
       diluted net loss per common share...............      16,709        8,735
</TABLE>


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



                                       4
<PAGE>   5


                                NETGENESIS CORP.
                            STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                                           -----------------------
                                                           MARCH 31,     MARCH 31,
                                                             2000          1999
                                                           ---------     ---------
<S>                                                        <C>           <C>
     CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss ........................................     $ (5,663)     $(2,578)
     Adjustments  to  reconcile  net  loss to net cash
     used in operating activities:
       Depreciation and amortization .................          399          102
       Gain  on  sale of  short-term  investments  and
           marketable securities .....................       (1,148)         --
       Non-cash interest expense .....................           21           21
       Stock-based compensation expense ..............          769           13
       Increase (decrease) resulting from changes in
          operating assets and liabilities:
          Accounts receivable ........................       (1,326)         (16)
          Prepaid expenses and other assets ..........         (439)         (45)
          Other assets ...............................          (56)         --
          Deferred revenue ...........................         (105)          16
          Accounts payable ...........................          469           26
          Accrued expenses ...........................         (245)          83
                                                           --------      -------
            Net cash used in operating activities ....       (7,324)      (2,378)
                                                           --------      -------

     CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of fixed assets .....................       (2,166)        (347)
       Purchases of short-term investments and
          marketable securities ......................      (61,472)         --

       Proceeds from sales of  short-term  investments
          and marketable securities ..................        1,148          --
                                                           --------      -------
            Net cash used in investing activities ....      (62,490)        (347)
                                                           --------      -------

     CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds  from  sale  and  leaseback  of  fixed
          assets .....................................          547          --
       Principal payments of capital lease obligations          (24)         --
       Repayment of debt .............................         (488)          (9)
       Proceeds from the issuance of common stock ....       80,653          --
       Proceeds from issuance of redeemable
          convertible preferred stock ................         --          3,000
       Proceeds from exercise of stock options .......           30            4
       Repurchase of restricted common stock .........          (11)        --
                                                           --------      -------
            Net cash provided by financing activities        80,707        2,995
                                                           --------      -------
     Net increase in cash and cash equivalents .......       10,893          269
     Cash and cash equivalents, beginning of period ..        9,643        2,261
                                                           --------      -------
     Cash and cash equivalents, end of period ........     $ 20,536      $ 2,530
                                                           ========      =======

     SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
       Dividends and accretion of preferred stock ....     $    442      $   220

     SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
       FINANCING ACTIVITIES:
       Additions  to  capital  lease  obligations  for
          sale and leaseback of fixed assets .........          547          --

       Convertible preferred stock warrants issued and
          recorded as debt discount ..................         --            255

       Conversion of redeemable convertible preferred
          stock to common stock......................        36,575          --

       Conversion of convertible preferred stock
          to common stock............................         1,717          --

</TABLE>


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



                                       5
<PAGE>   6

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements reflect all
adjustments (consisting only of normal recurring adjustments) which, in the
opinion of management, are necessary for a fair presentation of the financial
results for the periods shown.

The accompanying unaudited financial statements have been prepared in accordance
with the instructions for Form 10-Q and therefore do not include all information
and footnotes necessary for a complete presentation of operations, the financial
position, and cash flows of the Company, in conformity with generally accepted
accounting principles. These unaudited financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Registration Statement on Form S-1 (File No. 333-93335) filed with the
Securities and Exchange Commission.

The results of operations for the current interim period are not necessarily
indicative of results to be expected for the entire current year or other future
interim periods.

NOTE 2 - NET LOSS AVAILABLE TO COMMON STOCKHOLDERS PER COMMON SHARE AND PRO
FORMA NET LOSS PER COMMON SHARE

Basic and diluted net loss available to common stockholders per share is
computed using the weighted average number of common shares outstanding. Options
and warrants were not included in the computation of diluted net loss available
to common stockholders per share because the effect would be anti-dilutive.

Pro forma net loss per share has been computed as described above except that it
gives effect to the conversion of preferred stock outstanding as if the
conversion took place at the beginning of the period presented:

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
                                                                            ---------------------
                                                                            MARCH 31,   MARCH 31,
                                                                              2000        1999
                                                                            ---------   ---------
<S>                                                                         <C>          <C>
     Net loss .........................................................     $(5,663)     $(2,578)
     Dividends and accretion of redeemable preferred stock ............        (442)        (220)
                                                                            -------      -------
     Net loss available to common stockholders ........................     $(6,105)     $ 2,798)
          Weighted average shares .....................................      17,816        1,535
          Weighted average unvested common shares subject to repurchase      (1,107)        (698)
                                                                            -------      -------
     Shares used in computing basic and diluted net loss available to
       common stockholders per share ..................................       8,366          837
     Net loss available to common stockholders per share:
          Basic and diluted ...........................................     $ (0.73)     $ (3.34)
                                                                            =======      =======

    Conversion of convertible preferred stock..........................       8,343        7,898
    Pro forma shares used in computing basic and diluted net loss
      per share........................................................      16,709        8,735
    Pro forma net loss per share:
          Basic and diluted............................................     $ (0.34)      $(0.30)
                                                                            =======       ======
</TABLE>


NOTE 3 - EQUITY TRANSACTIONS

For the three months ended March 31, 2000 and 1999, the Company recorded
unearned stock-based compensation expense of $2.2 million and $210,000,
respectively, for the difference at the grant date between the exercise price of
options granted and the deemed fair value of the common stock underlying the
options granted during that period. Amortization of deferred stock-based
compensation recognized for the three months ended March 31, 2000 and 1999 was
$418,000 and $13,000, respectively. In addition, during the three months ended
March 31, 2000, the Company recorded stock-based compensation expense of
$351,000 related to a separation agreement entered into with a former employee.

On February 29, 2000, the Company completed an initial public offering of
common stock. Under the offering, 4,887,500 shares were sold at $18.00 per
share. Net proceeds to the Company were $80.3 million after $6,158,000 in
aggregate underwriting discounts and commissions and $1,544,000 in other
offering expenses.

NOTE 4 - SIGNIFICANT CUSTOMER AND GEOGRAPHIC INFORMATION

Revenue by geographic region is as follows (in thousands):


                                       6
<PAGE>   7


<TABLE>
<CAPTION>
                          THREE MONTHS ENDED
                         --------------------
                         MARCH 31,  MARCH 31,
                           2000       1999
                          -------   ---------
<S>                       <C>        <C>
     United States        $3,246     $  655

     Europe                  372        161

     Australia                53          6

     Other                    93       --
                          ------     ------

     Total                $3,764     $  822
                          ======     ======

</TABLE>

One customer accounted for more than 10% of revenue for the quarter ended March
31, 2000. A different customer accounted for more than 10% of revenue for the
quarter ended March 31, 1999.

NOTE 5 - COMPREHENSIVE LOSS

The components of comprehensive loss, net of income taxes, are as follows:


<TABLE>
<CAPTION>

(in thousands)                                          Three months ended March 31,
                                                           2000            1999
                                                         -------         -------
<S>                                                      <C>             <C>
 Net loss                                                ($5,663)        ($2,578)
 Unrealized gain on short-term investments and
  marketable securities                                       50            --
                                                         -------         -------
 Comprehensive loss                                      ($5,613)        ($2,578)
                                                         -------         -------

</TABLE>


NOTE 6 - SUBSEQUENT EVENT

In April 2000, the Company entered into an agreement to lease approximately
58,000 square feet of office space for its headquarters for approximately
$174,000 per month plus other occupancy costs. The Company expects to begin
occupancy of this space in August 2000.

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

The following information should be read in conjunction with the condensed
historical financial information and the notes thereto included in this report
and Management's Discussion and Analysis of Financial Condition and Results of
Operations and related financial information contained in the Company's
Registration Statement on Form S-1 (File No. 333-93335).

THIS REPORT 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, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S
EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES THAT ARE SIGNIFIED BY THE
WORDS "EXPECTS", "ANTICIPATES", "INTENDS", "BELIEVES", OR SIMILAR LANGUAGE. ALL
FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED ON INFORMATION
AVAILABLE TO THE COMPANY ON THE DATE HEREOF, AND THE COMPANY ASSUMES NO
OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. IN
EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE INFORMATION SET FORTH BELOW UNDER THE CAPTION "RISK FACTORS" IN
ADDITION TO THE OTHER INFORMATION SET FORTH HEREIN. THE COMPANY CAUTIONS
INVESTORS THAT ITS BUSINESS AND FINANCIAL PERFORMANCE ARE SUBJECT TO SUBSTANTIAL
RISKS AND UNCERTAINTIES.

OVERVIEW

    We offer e-customer intelligence software that enables companies to
understand and improve their online businesses. We license our NetAnalysis
software product to customers for a fee and also provide related maintenance and
support services. In addition, we provide professional consulting services.
These services include analytic consulting, product implementation, application
integration, customization of e-customer analysis reporting and training.



                                       7
<PAGE>   8

    We license NetAnalysis and our other software products to our customers
primarily on a perpetual, non-exclusive and non-transferable basis. Our pricing
model is based on the number of the customer's managed servers, the platform
supported and the number of end users of our software, allowing for additional
revenue as a customer's requirements grow. Support and maintenance contracts,
which are purchased with initial product licenses and are renewable annually
thereafter, entitle customers to telephone, e-mail and web-based support and to
routine product upgrades, when and if available. The price for our support and
maintenance services is based on a percentage of the then-current list price of
the software. Consulting fees for implementation services and training are
charged either on a time-and-materials basis or on a fixed-fee basis in the case
of packaged services, such as our FastPath implementation package.

    Service revenue consists of fees from professional services and from
software maintenance and support. Professional services include analytic
consulting, product implementation, application integration, report
customization, training and support. We recognize professional services fees as
we perform the services.

    Customers typically purchase maintenance and support agreements annually. We
recognize revenue from maintenance and support agreements ratably over the term
of the agreement, typically one year. We record cash receipts from clients and
billed amounts due from clients in excess of revenue recognized as deferred
revenue. The timing and amount of cash receipts from clients can vary
significantly depending on specific contract terms and can therefore have a
significant impact on the amount of deferred revenue in any given period.

    Since our inception, we have incurred substantial costs to develop our
technology and products, to recruit and train personnel for our engineering,
sales and marketing and professional services departments, and to establish our
administrative organization. As a result, we have incurred net losses in each
fiscal quarter since December 31, 1994 and, as of March 31, 2000, had an
accumulated deficit of $36.9 million. We anticipate that our operating expenses
will increase substantially in future quarters as we increase sales and
marketing operations, develop new distribution channels, fund greater levels of
research and development, broaden professional consulting services and support,
and improve operational and financial systems. We expect that these operating
expenses, as well as anticipated capital expenditures, will constitute a
material use of our cash resources. We expect to incur additional losses and
continued negative cash flow from operations. We may not achieve or sustain
profitability or positive cash flow from operations.

    We have recorded deferred stock-based compensation related to grants of
stock options. This amount represents the difference between the exercise price
of these stock option grants and the amount subsequently determined to be the
fair market value of the underlying common stock for financial reporting
purposes at the time of grant. Of this amount, we amortized approximately
$418,000 in the quarter ended March 31, 2000. In addition, we recorded
stock-based compensation expense of $351,000 related to a severance agreement
entered into with a former employee. We will amortize $7.5 million of
stock-based compensation ratably over the remaining vesting periods of the
options, generally four years or less, which will affect our reported results of
operations through 2003. All of these amounts appear on our statements of
operations as stock-based compensation.

RESULTS OF OPERATIONS


    Total Revenue. Total revenue increased by $2.9 million, or 358%, to $3.8
million for the quarter ended March 31, 2000 from $822,000 for the quarter ended
March 31, 1999. One customer accounted for more than 10% of revenue for the
quarter ended March 31, 2000. A different customer accounted for more than 10%
of revenue for the quarter ended March 31, 1999.

    Product Revenue. Product revenue increased by $1.6 million, or 345%, to $2.1
million for the quarter ended March 31, 2000 from $468,000 for the quarter ended
March 31, 1999. Substantially all of the growth in product revenue was due to
increases in the average dollar size of licenses, attributable to larger
implementations and price increases. Product revenue as a percentage of total
revenue decreased to 55% for the quarter ended March 31, 2000 from 57% for the
quarter ended March 31, 1999. We anticipate that revenue from licenses of
NetAnalysis will continue to represent a majority of our revenues in the future.
We expect that because of our small historical revenue base, the recent
percentage growth rates of our product revenue will not be sustainable in the
future.

    Service Revenue. Service revenue increased by $1.3 million, or 375%, to $1.7
million for the quarter ended March 31, 2000 from $354,000 for the quarter ended
March 31, 1999. Approximately $1.1 million of the increase in the dollar amount
of service revenue was attributable to increased implementation and consulting
services in connection with increased product license sales. The balance


                                       8
<PAGE>   9

of the increase was attributable to greater sales of maintenance contracts
associated with higher dollar value sales of NetAnalysis licenses.

    Cost of Product Revenue. Cost of product revenue consists primarily of
royalties associated with third-party software embedded in our software products
and software product costs, such as user manuals, packaging and media costs.
Cost of product revenue increased by $97,000, or 313%, to $128,000 for the
quarter ended March 31, 2000 from $31,000 for the quarter ended March 31, 1999.
The increase was attributable to an increase in license fees for third-party
software embedded in our NetAnalysis product. Cost of product revenue as a
percentage of product revenue declined to 6% for the quarter ended March 31,
2000 from 7% for the quarter ended March 31, 1999.

    Cost of Service Revenue. Cost of service revenue consists primarily of
salaries, benefits and associated overhead costs of our professional services
organization. Cost of service revenue increased by $1.4 million, or 332%, to
$1.8 million for the quarter ended March 31, 2000 from $417,000 for the quarter
ended March 31, 1999. Substantially all of the increase was attributable to an
increased number of personnel in our professional services organization. This
growth has required that we invest in hiring and training personnel and building
a management and operational infrastructure. This investment has resulted in the
cost of service revenue exceeding our service revenue. Cost of service revenue
as a percentage of service revenue decreased to 107% for the quarter ended March
31, 2000 from 118% for the quarter ended March 31, 1999. We expect that in
dollar amount our cost of service revenue will continue to exceed our service
revenue through at least the second quarter of 2000.

    Sales and Marketing Expenses. Sales and marketing expenses consist primarily
of personnel costs, including related overhead costs and commissions, as well as
travel and entertainment expenses, trade show and other promotional expenses,
advertising, and other marketing costs. Sales and marketing expenses increased
by $2.5 million, or 155%, to $4.1 million for the quarter ended March 31, 2000
from $1.6 million for the quarter ended March 31, 1999. Approximately $1.9
million of the increase was due to increased personnel in our sales and
marketing departments. Approximately $160,000 of the increase was due to
increased commissions earned by sales personnel on higher dollar sales. The
balance of the increase was attributable to increased marketing communications
expenditures associated with product introductions and efforts to create
increased awareness of our products and services. Sales and marketing expenses
as a percentage of total revenue declined to 108% for the quarter ended March
31, 2000 from 195% for the quarter ended March 31, 1999 due primarily to the
Company's ability to better leverage the existing resources within the
department compared to the prior year period. We expect that sales
and marketing expenses will continue to increase in dollar amount to support
marketing programs for new product launches, promotion of awareness of our
corporate and brand names, international expansion and increased sales efforts..

    Research and Development Expenses. Research and development expenses consist
primarily of salaries, benefits and related overhead costs attributable to our
research and development organization, as well as the cost of consultants.
Research and development expenses increased by $1.7 million, or 214%, to $2.5
million for the quarter ended March 31, 2000 from $789,000 for the quarter ended
March 31, 1999. Approximately $1.2 million of the increase was attributable to
increased staffing and associated support for software engineers required to
expand and enhance our product offerings. Approximately $350,000 of the increase
was attributable to increased consulting costs related to the development and
enhancement of our products. Research and development expenditures are charged
to operations as incurred. Research and development expenses as a percentage of
total revenue declined to 66% for the quarter ended March 31, 2000 from 96% for
the quarter ended March 31, 1999 due primarily to the Company's ability to
better leverage the existing resources within the department compared to the
prior year period. We believe that research and development expenses will
continue to increase in dollar amount as we add additional research and
development personnel.

    General and Administrative Expenses. General and administrative expenses
consist primarily of salaries, benefits and overhead costs associated with our
executive, finance, human resource, legal, accounting and internal information
system functions. General and administrative expenses increased by $1.2 million,
or 238%, to $1.7 million for the quarter ended March 31, 2000 from $497,000 for
the quarter ended March 31, 1999. Approximately $860,000 of the increase was the
result of increased staffing and associated expenses necessary to manage and
support our growth. General and administrative expenses as a percentage of total
revenue declined to 45% for the quarter ended March 31, 2000 from 60% for the
quarter ended March 31, 1999 due primarily to the Company's ability to better
leverage the existing resources within the department compared to the prior year
period. We expect that general and administrative expenses will continue to
increase in dollar amount as we expand our operations and infrastructure to
support our planned future growth and transition to operating as a public
company.

    Stock-based Compensation. We incurred stock-based compensation expense of
$769,000 and $13,000 for the quarters ended March 31, 2000 and 1999,
respectively. The expense includes $351,000 related to the extension of options
in connection with employee severance. It also includes $418,000 for
amortization of the deferred expense attributable to the issuance of stock
options with exercise prices less than the amount subsequently determined to be
the fair market value of the underlying stock for financial reporting purposes
on the date of grant. These options generally vest over four years or less. The
remaining deferred compensation expense of approximately $7.5 million will be
amortized ratably over the remaining vesting periods of the options, and will
affect


                                       9
<PAGE>   10
periods ending after March 31, 2000.

    Other Income (Loss). Other income (loss) consists of interest income,
interest expense, other income, other expenses, and realized gain on the sale of
marketable securities. Other income increased by $1.6 million to $1.5 million
for the quarter ended March 31, 2000 from a loss of $53,000 in the quarter
ended March 31, 1999. Approximately $1.1 million of the increase was due to
realized gains on marketable securities we sold in the quarter ended March 31,
2000. The balance of the increase was due to higher interest income incurred on
larger average outstanding cash and investment balances attributable to our
initial public offering during the quarter ended March 31, 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

    In March 2000, the Financial Accounting Standard Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation -- an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 to certain issues including: the
definition of an employee for purposes of applying APB Opinion No. 25; the
criteria for determining whether a plan qualifies as a noncompensatory plan; the
accounting consequence of various modifications to the terms of previously fixed
stock options or awards; and the accounting for the exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain conclusions in FIN 44 are applicable retroactively to specific
events occurring after either December 15, 1998 or January 12, 2000. The Company
does not expect the application of FIN 44 to have a material impact on the
Company's financial position or results of operations.

LIQUIDITY AND CAPITAL RESOURCES

    Since our inception, we have financed our operations primarily through
private sales of preferred stock, with net proceeds of $35.0 million, and with
the net proceeds of $80.3 million from our initial public offering completed in
February of 2000. To a lesser extent, we have financed our operations through
debt and lease financing. As of March 31, 2000, we had $20.5 million in cash and
cash equivalents, an increase of $10.9 million from $9.6 million as of December
31, 1999 and $52.5 million of short-term investments and marketable securities,
an increase of $51.3 million from $1,184,000 as of December 31, 1999.

    We used $7.3 million of cash in operations in the quarter ended March 31,
2000 compared to $2.4 million in operations in the quarter ended March 31, 1999.
We used cash primarily to fund our net losses from operations. For the quarter
ended March 31, 2000, cash used by operating activities was primarily
attributable to our net loss of $5.7 million and an increase in accounts
receivable of $1.3 million. The increase in accounts receivable was a result of
higher sales of our products and services. Cash provided by financing activities
was $80.7 million for the quarter ended March 31, 2000 and $3.0 million for the
quarter ended March 31, 1999. The principal source of financing for the quarter
ended March 31, 2000 was the Company's initial public offering, completed in
February 2000, which yielded net proceeds of $80.3 million. Our investing
activities resulted in net cash used of $62.5 million for the quarter ended
March 31, 2000 and $347,000 for the quarter ended March 31, 1999. For the
quarter ended March 31, 2000, approximately $61.5 million of cash was used for
the purchase of investments and marketable securities and approximately $2.2
million was used for investment in capital expenditures.

    Capital expenditures were $2.2 million for the quarter ended March 31, 2000,
and $347,000 for the quarter ended March 31, 1999. Our capital expenditures
consist primarily of purchases of property and equipment, including computer
equipment and software. We expect that our capital expenditures will continue to
increase in the future.

    We have a subordinated debt agreement with Comdisco, Inc. under which we
have obtained a term loan of $3.0 million and an equipment line of credit of up
to $1.0 million. The term loans and the equipment line are payable in 36 monthly
payments and bear interest at rates of 13.5% and 9%, respectively. As of March
31, 2000, we had $2.3 million outstanding under the term loan agreement and
$939,000 outstanding under the equipment line. No additional amounts are
available for borrowing under the term loan agreement. In order to lease
additional equipment under the equipment line of credit, we must not be in
default under the equipment line or under any other agreement, and there must
not have been a material change in our credit standing or in our ability to
perform our obligations under the equipment line. We believe we were in
compliance with these conditions as of March 31, 2000.

    We expect to experience significant growth in our operating expenses in the
future in order to execute our business plan, particularly research and
development and sales and marketing expenses. As a result, we anticipate that
our operating expenses, as well as planned capital expenditures, will constitute
a material use of our cash resources. In addition, we may utilize cash resources
to fund acquisitions or investments in complementary businesses, technologies or
product lines. We believe that the net proceeds from the sale of common stock in
our initial public offering will be sufficient to meet our working capital and
capital expenditure requirements for at least the next 12 months. Thereafter, we
may find it necessary to obtain additional equity or debt financing. Any needed
financing may not be available to us on commercially reasonable terms, if at
all.

YEAR 2000 STATUS

    The "year 2000" issue refers generally to the problems that some software
may have in determining the correct century for the year, which may result in
failures or the creation of erroneous results. Many computer systems and
software products originally could

                                       10
<PAGE>   11

not reliably distinguish dates beginning on January 1, 2000 from earlier dates.
It is possible that some companies' software and computer systems have not been
upgraded or replaced in order to correctly process dates beginning in 2000.

    To date, we are not aware that any year 2000 issues have affected our
business. Nonetheless, it may be too early to conclude that year 2000 issues
will not adversely affect our operations. Our business depends on the operation
of numerous systems that could be affected by year 2000 related problems. Those
systems include:

    -   hardware and software systems we use to deliver services to our
        customers, including our proprietary software systems as well as
        hardware and software supplied by third parties;

    -   communications networks, such as the Internet and private intranets,
        which we depend on to communicate both internally and with our customers
        and potential customers;

    -   the internal systems of our customers and suppliers;

    -   the hardware and software systems we use internally to manage our
        business; and

    -   non-information technology systems and services we use in our business,
        such as telephone systems and building systems.

    Any year 2000 problems that affect these systems could adversely affect our
operations. We did not undertake a study of our customers' year 2000 readiness
nor did we undertake a study of the environments in which our software may be
deployed. Our testing and review procedures may not have been adequate to
identify all potential year 2000 issues with these systems. With regard to our
software products and services, our testing of NetAnalysis version 4.0 and later
releases revealed no year 2000 issues that have not been remedied. Despite
testing by us and by current and potential clients, and assurances from
developers of products incorporated into our products, our products may contain
undetected errors or defects associated with year 2000 date functions. Known or
unknown errors or defects in our products could result in delay or loss of
revenue, diversion of development resources, damage to our reputation, or
increased service and warranty costs, any of which could seriously harm our
business. Some commentators have predicted significant litigation regarding year
2000 compliance issues, and we are aware of such lawsuits against other software
vendors. Because of the unprecedented nature of such litigation, it is uncertain
whether or to what extent we may be affected by it.

    We did not incur any material expenditures in connection with identifying or
evaluating year 2000 compliance issues. We neither developed nor intend to
develop a year 2000 contingency plan.

RISK FACTORS

The following is a discussion of certain factors that currently impact or may
impact our business, operating results and/or financial condition. Anyone making
an investment decision with respect to our capital stock or other securities is
cautioned to carefully consider these factors, along with the factors discussed
under the heading "Risk Factors" in the Company's Registration Statement on Form
S-1 (File No. 333-93335).

    OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO PREDICT OUR FUTURE
    OPERATIONS

    Although we were formed in 1994, our current business operations have a
limited history. We introduced the first version of our NetAnalysis software in
January 1996 and recorded our first revenue from this product and related
services in February 1996. To date, we have generated only limited amounts of
revenue from the sale of NetAnalysis and related products and services.
Accordingly, you have limited information about our company with which to
evaluate our business and prospects. Before buying our common stock, you should
consider the risks and difficulties frequently encountered by early stage
companies in new and rapidly evolving markets, particularly those companies
whose businesses depend on the Internet.

   WE HAVE A HISTORY OF LOSSES, EXPECT TO INCUR SUBSTANTIAL LOSSES AND NEGATIVE
   OPERATING CASH FLOWS AND MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY IN THE
   FUTURE

    We have not achieved profitability since 1994. We expect to continue to
incur substantial losses for the foreseeable future and may



                                       11
<PAGE>   12

never become profitable. We incurred net losses of $3.1 million in 1997, $5.8
million in 1998 and $16.0 million in 1999. As a result of ongoing operating
losses, we had an accumulated deficit of $36.9 million at March 31, 2000. As we
grow our business, we expect operating expenses and capital expenditures to
increase significantly, and we expect to continue to incur losses and negative
cash flow from operations. As a result, we will need to generate significant
revenue to achieve and maintain profitability. We do not believe that we can
sustain the percentage rates at which our revenue has grown in recent quarters.
We may not be able to sustain or increase profitability or cash flows from
operations on a quarterly or annual basis in the future. Our failure to achieve
or maintain profitability may materially and adversely affect the market price
of our common stock.

   WE EXPECT OUR REVENUE AND RESULTS OF OPERATIONS TO FLUCTUATE. THE MARKET
   PRICE OF OUR COMMON STOCK WOULD LIKELY FALL IF OUR QUARTERLY RESULTS ARE
   LOWER THAN THE EXPECTATIONS OF SECURITY ANALYSTS OR STOCKHOLDERS

    We have experienced substantial fluctuations in both our annual and
quarterly revenue and results of operations, and we expect those fluctuations to
continue for the foreseeable future. We believe the following factors are those
most likely to cause our revenue and results of operations to fluctuate:

    -   uncertain demand for our products and services

    -   unanticipated changes in the market for e-customer intelligence software

    -   the timing of sales and delivery of our products and services

    -   the timing of customer implementations of our products

    -   the mix of revenue derived from our products and services

    -   timing of introductions of new products and services by us or our
        competitors

    -   seasonal trends in our customers' business activity

    -   timing of hiring of personnel and changes in productivity of our
        professional services personnel and direct sales personnel

If our revenue or results of operations fall below the expectations of
securities analysts or investors, the market price of our common stock would
likely fall, and you could lose some or all of your investment. We budget our
expenses in part according to the revenue we forecast. A significant percentage
of our expenses, particularly salaries and rent, are relatively fixed. As a
result, if our revenue falls below our expectations, we may be unable to curtail
our expenses quickly enough to avoid losses greater than expected. As a result,
our results of operations may be volatile and difficult to predict. We do not
believe that period-to-period comparisons of our revenue and operating results
are necessarily meaningful. You should not rely on the results of one quarter as
an indication of future performance.

   MOST OF OUR REVENUE EACH QUARTER IS DERIVED FROM A SMALL NUMBER OF LARGE
   ORDERS. IF WE FAIL TO COMPLETE ONE OR MORE LARGE ORDERS IN ANY QUARTER, OUR
   REVENUE COULD BE SIGNIFICANTLY LOWER THAN EXPECTED

    We derive a significant portion of our revenue in each quarter from a small
number of large orders. For example, during the three months ended March 31,
2000, one customer accounted for more than 10% of our total revenue. Our
quarterly operating results could be adversely affected if we were unable to
complete one or more large orders in any quarter.

   OUR SALES CYCLES ARE LONG AND UNPREDICTABLE, MAKING IT DIFFICULT TO FORECAST
   OUR REVENUES AND BUDGET OUR EXPENSES

    Our sales cycles are long and unpredictable, in part because we generally
need to educate potential customers about the benefits of e-customer
intelligence software. In addition, we believe that, for many of our potential
customers, the purchase of our software and services can represent a significant
portion of their web site budget and a substantial commitment of personnel
resources. As a result, we experience widely varying sales cycles that typically
range from two to six months. Our long and varying sales cycles make it
difficult to predict the quarter in which particular sales may occur and,
therefore, to forecast our revenue and budget our expenses. Moreover, we believe
that, as our business develops, a significant portion of our sales will
increasingly fall within the last month of a quarter, making it difficult to
predict revenue until late in the quarter and to adjust expenses accordingly.




                                       12
<PAGE>   13


   OUR ABILITY TO INCREASE REVENUE DEPENDS ON EXPANDING OUR DIRECT SALES FORCE,
   WHICH MAY BE DIFFICULT BECAUSE OF THE SHORTAGE OF QUALIFIED SALES PERSONNEL
   AND BECAUSE IT TAKES TIME FOR NEW HIRES TO BECOME PRODUCTIVE

    If we are unable to significantly expand our direct sales force, we may not
increase our market share or revenue, which could seriously harm our business.
To date, we have derived the substantial majority of our revenue from the
efforts of our direct sales force. We believe we must increase the size of our
direct sales force in order to increase revenue. Competition for qualified sales
personnel is intense, and we may not be able to hire a sufficient number of
sales people with the skills we need. Moreover, the technical nature of our
products lengthens the time it takes for our new sales people to become
productive, typically three to six months. This lag in productivity may make it
more difficult to meet our sales growth targets. Further, we may not generate
sufficient sales to offset the increased expense resulting from growing our
sales force, and we may be unable to manage a larger sales force.

   BECAUSE THERE IS INTENSE COMPETITION FOR QUALIFIED PERSONNEL IN OUR INDUSTRY,
   WE MAY NOT BE ABLE TO RECRUIT OR RETAIN THE PERSONNEL WE NEED, WHICH COULD
   ADVERSELY AFFECT OUR ABILITY TO ACHIEVE OUR BUSINESS OBJECTIVES

    Our ability to achieve our business objectives could be adversely affected
if we cannot identify, attract, hire, train, retain and motivate a substantial
number of additional personnel. In particular, we are seeking to hire highly
skilled systems engineers and other technical and engineering personnel and
employees for our professional services organization. Because of the technical
nature of our products, it typically takes several months to train our
professional service personnel to provide services effectively. If we are unable
to expand and train our professional services staff, we could be unable to meet
customer demand for our services, which could cause customer dissatisfaction and
lost sales. Our headquarters are located in the metropolitan Boston,
Massachusetts area, and competition for qualified personnel in this area, as
well as the other areas where we need personnel, is intense. Competition is
particularly strong for qualified systems engineers and other software
development and technical personnel. Many other employers are able to offer
significantly more attractive compensation and benefits than we do. We may be
unable to recruit and retain the personnel we need. Our business would be
seriously harmed if we are unable to retain our existing employees or to hire
the other highly qualified personnel we need.

   THE EXPANSION OF OUR BUSINESS HAS PLACED, AND CONTINUES TO PLACE, A
   SIGNIFICANT STRAIN ON OUR MANAGEMENT, OPERATING SYSTEMS AND RESOURCES AND
   COULD SERIOUSLY HARM US

    Our failure to properly manage the expansion of our business could seriously
harm us. Our business has recently experienced a period of significant and rapid
expansion that has placed, and continues to place, a significant strain on our
management, operating systems and resources. For example, Brian Zanghi, our
Executive Vice President and Chief Operating Officer, joined us in January 2000,
and several other members of our management team joined us in 1999. During the
three months ended March 31, 2000, the number of our employees grew from 150 to
201, and we plan to continue to expand our business by hiring additional
personnel. To the extent that our business continues to grow rapidly, we must
implement and improve our operating systems, including our administrative,
financial, customer service and operational systems, procedures and controls. We
are currently implementing a new software system for human resources management,
including payroll and benefits. Our financial accounting and enterprise resource
planning software system implementions were completed in January 2000. We could
be seriously harmed if our current and anticipated personnel, systems,
procedures and controls are inadequate to support our future operations, or if
we are unable to complete the necessary improvements to our systems, procedures
and controls on a timely basis.

   WE MAY NEED TO ACQUIRE COMPLEMENTARY PRODUCTS, SERVICES, BUSINESSES OR
   TECHNOLOGIES TO REMAIN COMPETITIVE. ACQUISITIONS MAY BE UNAVAILABLE TO US OR
   MAY EXPOSE US TO RISKS THAT COULD NEGATIVELY AFFECT OUR OPERATING RESULTS

    We believe our customers will increasingly demand additional product
capabilities, features and services. Our internal resources may be inadequate to
meet those demands on a timely basis. As a result, we may need to acquire
products, services, businesses, technologies or other capabilities in order to
remain competitive. Our failure to meet customer demands could seriously harm
our business. We may be unable to successfully identify or acquire on
commercially reasonable terms the products, services, businesses, technologies
or capabilities that we need. Many of our competitors have greater financial
resources and more well-established industry relationships than we do, and may
therefore compete more effectively for acquisition opportunities. If we make an
acquisition, we may be exposed to additional risks that could seriously harm our
business, including the following:

    -   acquired products, businesses, services, technologies and capabilities
        may not meet customer needs or may not achieve or sustain widespread
        market acceptance



                                       13
<PAGE>   14


    -   we may encounter difficulties in assimilating acquired products,
        services, businesses, technologies and capabilities

    -   we may encounter difficulties in integrating acquired personnel and
        operations

    -   acquired products, services, businesses, technologies and capabilities
        may result in decreased revenue from our existing products and services

    Acquisitions could disrupt our ongoing business, distract our employees,
increase our expenses and adversely affect our results of operations. We could
issue equity securities to pay for an acquisition, which could dilute the equity
interests of our existing stockholders. In addition, acquisitions may involve
investment-related or other charges and amortization of acquired technology,
goodwill and other intangible assets, which may adversely affect our results of
operations.

   OUR BUSINESS AND PROSPECTS WOULD SUFFER IF WE ARE UNABLE TO PROTECT OUR
   INTELLECTUAL PROPERTY RIGHTS

    Our success depends in large part on our intellectual property, particularly
our software. If we fail to successfully enforce our intellectual property
rights, other companies might copy our technology or introduce products or
services that compete with ours. This could reduce our revenues and weaken our
competitive position. We rely solely on a combination of copyright, trademark
and trade secrets law, assignment of invention and confidentiality agreements,
confidentiality procedures and licensing arrangements to establish and protect
our intellectual property rights. We have no patents. We have filed a
provisional patent application relating to our NetActivator technology. We have
registered the trademarks NetGenesis and NetAnalysis in the United States and
claim trademark rights in CartSmarts, Design for Analysis, DFA, NetDashboard,
NetInstrument, NetStream and ReportSite. Our efforts to protect our intellectual
property may be inadequate. Existing trade secret, copyright and trademark laws
offer only limited protection, and we may be unsuccessful in obtaining that
protection, or our efforts to obtain that protection may be opposed by others.
For example, we have been advised that our application to register the mark
NetGenesis in the European Union has been opposed by a large Spanish insurance
company that owns a number of marks incorporating the word "Genesis." In
addition, the laws of some foreign countries where we market our products and
services do not protect intellectual property rights to the same extent as do
the laws of the United States. We may be required to spend significant resources
to monitor infringement of and enforce our intellectual property rights.

    Third parties could copy or otherwise obtain and use our products or
technology without our authorization. They could also independently develop
similar technology that may infringe our intellectual property rights. We may
not be able to detect infringement and may lose our competitive position in the
market before we do so. Competitors may also design around our technology or
develop competing technologies. If this occurs, our business and prospects would
be materially and adversely affected.

   OTHERS MAY BRING INFRINGEMENT CLAIMS AGAINST US WHICH COULD HARM OUR
   BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION

    Reliance on intellectual property rights is pervasive in our industry, and
we expect that as competition intensifies, companies will continue to pursue
vigorous enforcement of their intellectual property rights through litigation
and other means. As a result, third parties may claim that our products or
services infringe their intellectual property rights. Any such claim could
seriously harm our business, results of operations and financial condition. We
have not performed a comprehensive analysis of patents that may limit our
ability to do business. An increasing number of companies are seeking and
obtaining patents regarding methods of doing business on the Internet, and valid
patents that apply to our methods of doing business may have been issued or may
be issued in the future. Defending any claim of intellectual property
infringement, regardless of merit, is expensive and time-consuming and may
distract our management's attention away from our business. As a result of any
claim or anticipated claim, we may agree or be forced to:

    -   pay substantial damages

    -   cease selling or using products and services that incorporate the
        infringed intellectual property

    -   obtain a license for the infringed intellectual property, which might
        not be available on commercially reasonable terms or which could
        adversely affect our results of operations and financial condition

    -   attempt to modify our products and services to avoid infringing others'
        intellectual property rights, which we might be unable to do at all or
        quickly enough to prevent serious harm to our competitive position in
        the market


                                       14
<PAGE>   15


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to the impact of interest rate changes, foreign currency
fluctuation, and changes in the market values of its investments.

INTEREST RATE RISK

The Company's exposure to market rate risk for changes in interest rates relate
primarily to the Company's investment portfolio. The Company has not used
derivative financial instruments in its investment portfolio. The Company
invests its excess cash in debt instruments of the U.S. Government and its
agencies, and in high-quality corporate issuers. The Company protects and
preserves its invested funds by seeking to limit default, market and
reinvestment risk.

Investment in both fixed rate and floating rate interest-earning instruments
carries a degree of interest rate risk. The fair market value of fixed rate
securities may be adversely affected by a rise in interest rates, while floating
rate securities may produce less income than expected if interest rates fall.
Due in part to these factors, the Company's future investment income may fall
short of expectations due to changes in interest rates or the Company may suffer
losses in principal if forced to sell securities that have declined in market
value due to changes in interest rates.

FOREIGN CURRENCY RISK

To date, international sales are made by our direct sales force or through
international alliances and are primarily transacted in U.S. dollars. As we
continue to increase our international business we could be subject to risks
typical of an international business, including but not limited to differing
economic conditions, changes in political climate, differing tax structures,
other regulations and restrictions, and foreign exchange rate volatility.
Accordingly, the Company's future results could be materially adversely affected
by changes in these or other factors.

The Company does not use derivative financial instruments for speculative
trading purposes, nor does the Company hedge any foreign currency exposure in a
manner that entirely offsets the effects of changes in foreign exchange rates.

PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

The Company is not involved in any legal proceedings that are material to its
business or financial condition.

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS

a.      Not applicable

b.      Not applicable

c.      Recent Sales of Unregistered Securities

The sales of the securities listed below were exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act") in reliance on Section
4(2) of the Securities Act or Rule 701 promulgated under section 3(b) of the
Securities Act as transactions by an issuer not involving a public offering or
transactions pursuant to compensatory benefit plans and contracts relating to
compensation as provided under such Rule 701. The recipients of securities in
each such transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates issued in such transactions. All recipients had adequate access,
through their relationships with the Company, to information about the Company.

        (i) During the quarter ended March 31, 2000, the Company granted options
        to purchase an aggregate of 1,043,875 shares of Common Stock to an
        aggregate of 94 employees pursuant to the Company's 1999 Stock Option
        Plan.


                                       15
<PAGE>   16


        (ii) During the quarter ended March 31, 2000, options to purchase an
        aggregate of 162,095 shares of Common Stock were exercised by an
        aggregate of 33 employees pursuant to the Company's 1995 Stock Option
        Plan.

d.      Use of Proceeds from Sale of Registered Securities.

On February 29, 2000 we completed an initial public offering of our Common
Stock, $0.001 par value. The managing underwriters in the offering were Chase
Securities, Inc., Deutsche Bank Securities, Inc., and U.S. Bancorp Piper
Jaffray, Inc. (the "Underwriters"). The shares of Common Stock sold in the
offering were registered under the Securities Act on a Registration Statement on
Form S-1 (the "Registration Statement") (File No. 333-93335) that was declared
effective by the Securities and Exchange Commission on February 28, 2000. The
offering commenced on February 29, 2000, on which date the 4,887,500 shares of
Common Stock registered under the Registration Statement (including 637,500
shares issued upon exercise of the underwriters' over-allotment option) were
sold at a price of $18.00 per share. The aggregate underwriting discounts and
commissions to the Underwriters were $6,158,000 and the aggregate net proceeds
to the Company were approximately $80.3 million after deducting offering
expenses of $1,544,000. Through March 31, 2000, we have applied the net proceeds
of the offering approximately as follows: $1,136,000 for working capital;
$1,420,000 for purchases of fixed assets; and, $262,000 for the repayment of
principal on our indebtedness and capital lease obligations. The balance of the
net proceeds, in the amount of $61,472,000 has been invested in temporary
investments, consisting primarily of high-grade government agency and corporate
bonds, pending their future application.

The Company currently expects to use the balance of net proceeds primarily for
working capital and general corporate purposes, including funding product
development and expanding the sales and marketing organization. The amounts and
timing of these expenditures will vary depending on a number of factors,
including the amount of cash generated by our operations, competitive and
technological developments and the rate of growth, if any, of our business. In
addition, we may use a portion of the net proceeds for further development of
our product lines through acquisitions of products, technologies and businesses.

None of our offering expenses or the net proceeds of the offering were paid
directly or indirectly to any director, officer, general partner of NetGenesis
or their associates, persons owning 10% or more of any class of equity
securities of NetGenesis, or any affiliate of NetGenesis.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


ITEM 5. OTHER INFORMATION

None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a.      Exhibits:

        * 3.3      Amended and Restated Certificate of Incorporation

        * 3.5      Amended and Restated By-Laws

         10.19     Lease dated April 4, 2000 between NetGenesis Corp. and New
                   Boston Alewife Limited Partnership

         27.1      Financial Data Schedule

        *          Incorporated by reference to the similarly numbered exhibit
                   filed as part of our Registration Statement on Form S-1,
                   File No. 333-93335.

b.       Reports on Form 8-K


                                       16
<PAGE>   17

         None.


                                   SIGNATURES

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

                              NETGENESIS CORP.


                              By: /s/ JOHN P. DELEA
                                  --------------------------------------
                                  JOHN P. DELEA
                                  CHIEF FINANCIAL OFFICER
                                  (PRINCIPAL ACCOUNTING AND FINANCE OFFICER)

Date: MAY 12, 2000


                                INDEX TO EXHIBIT


Exhibit number                     Description
--------------                     -----------
   *    3.3            Amended and Restated Certificate of Incorporation
   *    3.5            Amended and Restated By-Laws
        10.19          Lease dated April 4, 2000 between NetGenesis Corp. and
                       New Boston Alewife Limited Partnership
        27.1           Financial Data Schedule
--------------

*    Incorporated by reference to the similarly numbered exhibit filed as part
     of our Registration Statement on Form S-1, File No. 333-93335.


                                       17