<PAGE>

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                      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, 1998

                                      OR

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

For the transition period from __________ to __________

                        COMMISSION FILE NUMBER 0-22718




                                 RACOTEK, INC.
            (Exact name of Registrant as specified in its charter)



                DELAWARE                                   #41-1636021
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                    Identification No.)


           7301 OHMS LANE, SUITE 200, MINNEAPOLIS, MINNESOTA, 55439
         (Address of principal executive offices, including zip code)



                                (612) 832-9800
             (Registrant's telephone number, including area code)

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


Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.



                                                     Outstanding at
                       Class                         March 31, 1998
                       -----                         --------------
            Common Stock, $0.01 par value              25,015,558

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THIS REPORT CONSISTS OF 13 SEQUENTIALLY NUMBERED PAGES.



<PAGE>

                                 RACOTEK, INC.

                                     INDEX

                        PART I -- Financial Information


<TABLE>
<CAPTION>


                                                                        PAGE NO.
                                                                        --------
<S>                                                                     <C>
Item 1.   Financial Statements

            Statements of Operations for the
              Three Months Ended March 31, 1998, and 1997                   3

            Balance Sheets as of
              March 31, 1998, and December 31, 1997                         4

            Statements of Cash Flows for the
              Three Months Ended March 31, 1998, and 1997                   5

            Notes to Financial Statements                                   6


Item 2.     Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                     8

Item 3.     Not Applicable


                         PART II -- Other Information

Items
1-5.        Not applicable                                                 12

Item 6.     Exhibits and Reports on Form 8-K                               12

Signatures                                                                 13

</TABLE>


                                       2

<PAGE>

                        PART I.  FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS


                                 RACOTEK, INC.
                           STATEMENTS OF OPERATIONS
                                  (Unaudited)

(In thousands, except per share data)

<TABLE>
<CAPTION>

                                                           THREE MONTHS ENDED
                                                                MARCH 31,
                                                          ---------------------
                                                           1998           1997
                                                          ------        -------
<S>                                                       <C>           <C>
Net revenues:
  Services                                                $1,334         $1,550
  Products                                                    70            189
                                                          ------        -------
                                                           1,404          1,739


Cost and expenses:
  Cost of services                                           776          1,080
  Cost of products                                             6            179
  Research and development                                   432          1,025
  Sales and marketing                                        522          1,529
  General and administrative                                 240            478
                                                          ------        -------
Loss from operations                                        (572)        (2,552)
Interest income                                               76            127
                                                          ------        -------
Net loss                                                   ($496)       ($2,425)
                                                          ------        -------
                                                          ------        -------
Net loss per share- basic and diluted                     ($0.02)        ($0.10)
                                                          ------        -------
                                                          ------        -------
Weighted average shares outstanding                       25,001         24,863
                                                          ------        -------
                                                          ------        -------


</TABLE>

             The accompanying financial statements are an integral
                       part of the financial statements.


                                       3


<PAGE>

                                 RACOTEK, INC.
                                 BALANCE SHEETS

(In thousands, except per share data)

<TABLE>
<CAPTION>


                    ASSETS

                                                         MARCH 31,      DECEMBER 31,
                                                           1998             1997
                                                        -----------     ------------
                                                        (UNAUDITED)
<S>                                                     <C>             <C>
Current assets:
  Cash and cash equivalents                                $2,343           $3,103
  Short-term investments                                    2,558            2,233
  Accounts receivable, net                                    522              561
  Prepaid expenses and other current assets                   197              195
                                                        -----------     ------------
          Total current assets                              5,620            6,092

Property and equipment, net                                   677              786
Restricted cash                                               355              355
Other long-term assets                                          3                4
                                                        -----------     ------------
          Total assets                                     $6,655           $7,237
                                                        -----------     ------------
                                                        -----------     ------------

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Accounts payable                                           $149               $6
  Accrued expenses                                            573              651
  Deferred revenue                                            124              303
                                                        -----------     ------------
          Total current liabilities                           846              960
                                                        -----------     ------------

Commitments

Stockholders' equity:
  Common stock, $0.01 par value, 35,000 shares
    authorized, 25,016 and 24,999 issued and
    outstanding at March 31, 1998 and December 31, 1997,
    respectively                                              250              250
  Additional paid-in capital                               71,293           71,265
  Accumulated deficit                                     (65,584)         (65,088)
  Promissory note receivable from stockholder                (150)            (150)
                                                        -----------     ------------
          Total stockholders' equity                        5,809            6,277
                                                        -----------     ------------
     Total liabilities and stockholders' equity            $6,655           $7,237
                                                        -----------     ------------
                                                        -----------     ------------

</TABLE>

             The accompanying financial statements are an integral
                       part of the financial statements.


                                       4


<PAGE>

                                 RACOTEK, INC.
                           STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

(In thousands)

<TABLE>
<CAPTION>

                                                             THREE MONTHS ENDED
                                                                  MARCH 31,
                                                            ---------------------
                                                             1998           1997
                                                            ------        -------
<S>                                                         <C>           <C>
Cash flows from operating activities:
  Net loss                                                   ($496)       ($2,425)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                              118            237
    Provision for bad debts                                      -             30
    Amortization of premiums (discounts) on investments          2            (16)
    Stock issued for consulting services                         -             41
    Changes in operating assets and liabilities:
      Accounts receivable                                       39             87
      Inventories                                                -             31
      Prepaid expenses and other current assets                 (2)            25
      Current liabilities                                     (114)          (115)
                                                            ------        -------
         Net cash used in operating activities                (453)        (2,105)

Cash flows from investing activities:
  Purchase of investments                                   (1,927)        (1,000)
  Proceeds from maturity of investments                      1,600          4,000
  Purchase of equipment                                         (8)           (79)
                                                            ------        -------
         Net cash provided (used in) investing activities     (335)         2,921

Cash flows from financing activities:
  Proceeds from exercises of stock options                      28            231
                                                            ------        -------
         Net cash provided from financing activities            28            231
                                                            ------        -------
Net change in cash and cash equivalents                       (760)         1,047
Cash and cash equivalents, beginning of period               3,103          2,956
                                                            ------        -------
Cash and cash equivalents, end of period                    $2,343         $4,003
                                                            ------        -------
                                                            ------        -------

</TABLE>

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



                                       5

<PAGE>

                         NOTES TO FINANCIAL STATEMENTS

Note A.  Basis of Presentation:

The unaudited financial statements of Racotek, Inc. ("Racotek" or the 
"Company") as of March 31, 1998, and for the three month periods ended 
March 31, 1998, and 1997, reflect, in the opinion of management, all 
adjustments (which include only normal recurring adjustments) necessary to 
fairly state the financial position as of March 31, 1998, and the results of 
operations and cash flows for the reported periods.  The results of 
operations for any interim period are not necessarily indicative of the 
results to be expected for any other interim period or for the full year.  
The year-end balance sheet data was derived from audited financial 
statements, but does not include all disclosures required by generally 
accepted accounting principles.  These financial statements should be read in 
conjunction with the Company's audited financial statements and related notes 
for the year ended December 31, 1997, which were included in the Company's 
1997 Annual Report on Form 10-K.

Effective January 1, 1998, the Company adopted Statement of Position (SOP) 97-2,
"Software Revenue Recognition."  The adoption of SOP 97-2 has had no effect 
on the Company's revenue recognition practices or any impact on the Company's 
financial position or results of operations.  In addition, the adoption of 
SOP 97-2 would have had no impact on previously reported results of 
operations for the three months ended March 31, 1997.

Note B.  Selected Balance Sheet Information (in thousands):

<TABLE>
<CAPTION>

                                            March 31, 1998    December 31, 1997
                                            --------------    -----------------
                                             (Unaudited)
<S>                                         <C>               <C>
Accounts receivable, net:
  Accounts receivable                          $   755            $   785
  Less allowance for doubtful accounts            (233)              (224)
                                               -------            -------
                                               $   522            $   561
                                               -------            -------
                                               -------            -------

Property and equipment, net:
  Computer equipment                           $ 1,462            $ 1,453
  Furniture and equipment                          679                679
  Leasehold improvements                           106                106
                                               -------            -------
                                                 2,247              2,238

  Less accumulated depreciation and
    amortization                                (1,570)            (1,452)
                                               -------            -------
                                               $   677            $   786
                                               -------            -------
                                               -------            -------

</TABLE>

Note C. Net Loss per Share:

Effecive December 31, 1997, the Company adopted Statement of Financial 
Accounting Standards No. 128. "Earnings per Share," and has disclosed basic 
and diluted net loss per share for the quarters ended March 31, 1998 and 1997 
in accordance with this standard.



                                       6
<PAGE>

The Company incurred a net loss for the first quarter of 1998 and 1997, and
excluded common equivalent shares from the diluted loss per share computation,
as their effect is anti-dilutive. If the Company generates earnings in future
periods the impact of common equivalent shares may be dilutive. At March 31,
1998, the Company had 6,418,499 stock options outstanding, which may be
dilutive in future periods.


                                       7


<PAGE>

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

OVERVIEW

     Racotek, Inc. ("Racotek" or the "Company") provides solutions that 
enable its clients to deliver better service to their customers and improve the
productivity of their workforce. Clients of the Company are generally large 
companies with significant numbers of employees engaged in field service. The 
Company provides its clients with enterprise customer management system 
integration services, including business case evaluation, system planning and 
design, software development, training, installation, change management and 
network management support.

     The Company is also developing a wireless data technology that, in 
concept, will enable high-speed data transmission over existing cellular 
infrastructures at rates not possible with existing systems, without 
requiring dedicated frequencies or diminishing the capacity or quality of 
voice transmissions.  The Company refers to this technology as "NextNet" and 
received a United States patent registration for it in 1996.  The Company has 
since received several foreign patent registrations for the NextNet 
technology.

     Historically, the Company derived a substantial amount of its revenue 
from sales of proprietary hardware and software that originally enabled data 
communication over specialized mobile radio ("SMR") technology and, 
eventually, most types of wireless networks. During 1996, the Company began a 
process to expand the services it could offer to its clients by becoming a 
systems integrator focused on wireless data communication and ceased 
production of its proprietary hardware.  In 1997, the Company completed the 
exit from its SMR hardware operations, discontinuing support for SMR 
technologies, except on a time and materials basis, closing several 
facilities, disposing of assets no longer used in operations, hiring 
personnel with skills and experience in field service and enterprise customer 
management, and eliminating personnel with skills related to its previous 
operations.  These actions reduced the Company's payroll from approximately 
95 employees to approximately 40 employees and reduced the Company's 
operating costs significantly.  Also, during the second half of 1997 and the 
first quarter of 1998, the Company broadened its sales focus from providing 
systems integration services for field service workers to providing such 
services for all aspects of its clients' enterprises that affect their 
customers.  The Company continues to view field service as its primary target 
market and will still license its proprietary software to clients and develop 
custom software applications for use by its clients' field service employees. 
However, the Company expects to derive an increasing percentage of its 
revenues from integrating third party software and equipment for all aspects 
of its clients' enterprises, including call centers, help desks and dispatch.

     Although the Company has significantly reduced its operating costs and 
cash flows used in operations, the Company expects to continue to incur 
losses through 1998, as it attempts to grow its revenues by providing 
services in the area of enterprise 


                                       8

<PAGE>

customer management systems integration. There can be no assurance that these 
services will meet with market acceptance or that revenues from these 
services will be sufficient for the Company to obtain or sustain 
profitability.  The Company does not expect to derive revenue from its 
NextNet technology during 1998.

RESULTS OF OPERATIONS

     NET REVENUES

     Revenues for the quarter ended March 31, 1998, were $1,404,000 as 
compared to $1,739,000 in the first quarter of 1997. Service revenues were 
$1,334,000 for the quarter ended March 31, 1998, as compared to $1,550,000 
for the comparable period in 1997.  Product revenues were $70,000 and 
$189,000 for the quarters ended March 31, 1998, and 1997, respectively.  The 
overall decrease in revenues is directly related to the changes in the 
composition of the Company's revenues, as the Company has not yet replaced 
the revenues obtained from providing proprietary products and incidental 
services for those products with systems integration service revenues. The 
Company expects that service revenues will be an increasing percentage of its 
total revenues, and that product revenues will continue to decline. The 
Company derives a substantial percentage of its revenues from a small number 
of clients.  The timing and amount of integration services performed for 
these clients can fluctuate, causing the Company's service revenues to vary.  
The Company expects this volatility to continue during 1998.  As the Company 
increases its focus on enterprise customer management, product revenues, if 
any, will come from sourcing and reselling third party equipment to the 
Company's integration service clients.

     COST OF REVENUES

     The Company's total cost of revenues for the quarter ended March 31, 
1998, were $782,000, compared to $1,259,000 in the first quarter of 1997.  
Cost of service revenues were $776,000 for the first quarter of 1998, 
compared to $1,080,000 for the first quarter of 1997.   Service gross margins 
for the quarter ended March 31, 1998, were $558,000 or 42%, compared to 
$470,000 or 30% for the first quarter of 1997.  The increase in service gross 
margins resulted primarily from the cost reduction measures taken in 1997.  
The Company expects that gross margin percentages for the remainder of 1998 
will be similar to those realized in the first quarter.  Cost of product 
revenues were $6,000 and $179,000 for the quarters ended March 31, 1998, and 
1997, respectively.  The decrease from 1997 to 1998 is primarily due to 
ending the production and distribution of SMR hardware in the third quarter 
of 1997. Cost of product revenues will continue to be significantly lower 
during 1998 as compared to 1997, as the Company focuses on deriving revenues 
from enterprise customer management systems integration services.

     RESEARCH AND DEVELOPMENT

     Research and development expenses were $432,000 and $1,025,000 for the 
quarters ended March 31, 1998, and 1997, respectively.  The Company is now 
focused on systems integration services instead of product sales, and the 
reduction in research and development expenses in the first quarter is due 
to the reduction of research and development activities subsequent to the 
third quarter of 1997.  Research and development costs associated with 
NextNet were $341,000 during the first quarter of 1998.  Research and 
development costs associated with NextNet were not significant in 


                                       9

<PAGE>

the first quarter of 1997. Research and development expenses are expected to 
show similar amounts of decline on a comparable quarter basis for the second 
and third quarters.

     SALES AND MARKETING

     Sales and marketing expenses were $522,000 and $1,529,000 for the 
quarters ended March 31, 1998, and 1997, respectively.  The decrease in these 
costs resulted primarily from the cost reduction measures taken in the third 
and fourth quarters of 1997. Sales and marketing expenses are expected to 
increase gradually during 1998 over the amounts recorded in the first 
quarter, as the Company incurs costs to market enterprise customer management 
systems integration services. 

     GENERAL AND ADMINISTRATIVE

     General and administrative expenses were $240,000 and $478,000 for the 
quarters ended March 31, 1998, and 1997, respectively.  The decrease in these 
costs resulted primarily from the cost reduction measures implemented by the 
Company in 1997.  The Company expects quarterly general and administrative 
costs to remain fairly constant for the remainder of 1998.

     INTEREST INCOME

     Interest income was $76,000 and $127,000 for the quarters ended March 31, 
1998, and 1997, respectively.  The decrease is primarily the result of a 
decrease in cash and cash equivalents.

LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 1998, the Company had no significant capital spending or 
purchase commitments and had cash, cash equivalents, and investments totaling 
$4,901,000 and working capital of $4,774,000. The Company believes it has 
sufficient capital resources to fund its enterprise customer management 
systems integration operations into 1999, but is seeking strategic partners 
to help fund the development of its NextNet technology.  For the three months 
ended March 31, 1998, the Company used $453,000 of cash in its operating 
activities, compared to $2,105,000 of cash used in operations for the three 
months ended March 31, 1997. The amount of cash used in operating activities 
decreased primarily due to cost reduction measures implemented in 1997.  
The impact of the 1997 cost reduction measures on the Company's use of cash 
are expected to continue throughout 1998. During the three months ended 
March 31, 1998, the Company used $335,000 of cash in investing activities, 
primarily for the purchase of investments, net of proceeds from investments 
that matured during the quarter.  No significant financing activities 
occurred during the three months ended March 31, 1998.


                                       10

<PAGE>

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISION OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

     The foregoing Management's Discussion and Analysis of Financial 
Condition and Results of Operations contains various "forward-looking 
statements" within the meaning of Section 27A of the Securities Act of 1933, 
as amended, and Section 21E of the Securities Exchange Act of 1934, as 
amended.  Forward-looking statements represent the Company's expectations or 
beliefs concerning future events, including the following: any statements 
regarding future sales and profit percentages, any statements regarding the 
continuation of historical trends, and any statements regarding the 
sufficiency of the Company's cash balances and cash generated from operating 
and financing activities for the Company's future liquidity and capital 
resource needs.  The Company cautions that any forward-looking statements 
made by the Company in this Form 10-Q or in any other announcements made by 
the Company are further qualified by important factors that could cause 
actual results to differ materially from the forward-looking statements, 
including, without limitation, the ability of the Company to obtain 
large-scale consulting services contracts, the Company's ability to use these 
consulting services to obtain additional support services revenues, the 
ability of the Company to hire and retain qualified personnel, the levels of 
promotion and marketing required to promote the Company's services, the 
ability of the Company to develop and market NextNet, its developmental 
technology for high speed wireless data communication, the ability of the 
Company to successfully obtain the funding necessary for the development of 
NextNet and other factors identified in this Form 10-Q and the Company's 
other filings with the Securities and Exchange Commission.


                                       11

<PAGE>

                          PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     None

ITEM 2.  CHANGES IN SECURITIES.

     None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     None

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

     The Annual Meeting of the Company's shareholders was held on April 30, 
1998.  The shareholders considered two proposals.  The first proposal 
considered at the meeting were to elect five directors of the Company, each 
to hold office until the next Annual Meeting of the Stockholders and until 
his successor has been elected and qualified or until his earlier resignation 
or removal.  The following persons were nominated for election as directors: 
Joseph B. Costello, Dixon R. Doll, Michael A. Fabiaschi, James L. Osborn, and 
Norman D. Smith. All five of the nominated directors were elected.  Votes cast 
in favor and against the nominees were, respectively: Mr. Costello, 22,494,571 
and 229,763; Mr. Doll, 22,477,571 and 246,763; Mr. Fabiaschi, 21,491,771 and 
1,232,563; Mr. Osborn, 22,478,271 and 246,063; and Mr. Smith, 22,494,171 and 
230,163.  Prior to the Annual Meeting, Mr. Smith had resigned from the Board.  
The second proposal was to ratify the selection of Coopers & Lybrand L.L.P. as 
independent accountants for the Company for the current fiscal year.  This 
proposal passed, with 21,927,489 votes cast in favor, 23,395 votes cast 
against, 51,450 votes abstaining, and 722,000 broker non-votes.

ITEM 5.  OTHER INFORMATION

     None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits - None

(b)  Reports on Form 8-K
     No reports on Form 8-K were filed during the quarter ended March 31, 1998.


                                       12


<PAGE>

                                  SIGNATURES

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


                                       RACOTEK, INC.

                                       By:  Michael A. Fabiaschi
                                            -----------------------------------
                                            Michael A. Fabiaschi
                                            President, Chief Executive Officer
                                            and Acting Chief  Financial Officer


                                       Dated:  May 15, 1998


                                       13