<PAGE>

--------------------------------------------------------------------------------


                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                    ______________________________________

                                   FORM 10-Q

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

                For the Quarterly Period Ended August 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 0-16006

                              COGNOS INCORPORATED
            (Exact Name Of Registrant As Specified In Its Charter)

              CANADA                               98-0119485
  (State Or Other Jurisdiction Of       (IRS Employer Identification No.)
   Incorporation Or Organization)

         3755 Riverside Drive,
       P.O. Box 9707, Station T,
        Ottawa, Ontario, Canada                      K1G 4K9
(Address Of Principal Executive Offices)            (Zip Code)

                                (613) 738-1440
             (Registrant's Telephone Number, Including Area Code)


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

The number of shares outstanding of the registrant's only class of Common Stock
as of September 30, 2000, was 88,070,202.

--------------------------------------------------------------------------------
<PAGE>

                              COGNOS INCORPORATED

                                     INDEX

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>                                                                          <C>
                        PART I - FINANCIAL INFORMATION

Item 1.   Consolidated Financial Statements

          Consolidated Statements of Income for the three and six months
           ended August 31, 2000 and August 31, 1999........................  3

          Consolidated Balance Sheets as of August 31, 2000
           and February 29, 2000............................................  4

          Consolidated Statements of Cash Flows for the six months
           ended August 31, 2000 and August 31, 1999........................  5

          Condensed Notes to the Consolidated Financial Statements..........  6

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

Item 3.   Quantitative and Qualitative Disclosure about Market Risk......... 20

                          PART II - OTHER INFORMATION

Item 1.   Legal Proceedings................................................. 21

Item 2.   Changes in Securities............................................. 21

Item 4.   Submission of Matters to a Vote of Security Holders............... 22

Item 6.   Exhibits and Reports on Form 8-K.................................. 22

Signature .................................................................. 23
</TABLE>


                                       2
<PAGE>

PART I - FINANCIAL INFORMATION
------------------------------

Item 1.  Consolidated Financial Statements


                              COGNOS INCORPORATED

                       CONSOLIDATED STATEMENTS OF INCOME

                   (US$000s except share amounts, U.S. GAAP)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                     Three months ended               Six months ended
                                                          August 31,                      August 31,
---------------------------------------------------------------------------------------------------------
                                                     2000            1999            2000            1999
---------------------------------------------------------------------------------------------------------
<S>                                           <C>             <C>             <C>             <C>
Revenue
   Product license                               $ 61,485         $44,487        $118,218        $ 83,358
   Product support                                 35,692          28,247          68,975          55,766
   Services                                        21,036          15,394          39,718          30,649
---------------------------------------------------------------------------------------------------------
Total revenue                                     118,213          88,128         226,911         169,773
---------------------------------------------------------------------------------------------------------

Operating expenses
   Cost of product license                          1,713           1,001           3,442           2,055
   Cost of product support                          4,071           3,336           8,345           6,431
   Selling, general, and administrative            75,931          54,593         148,556         106,401
   Research and development                        16,507          12,845          32,361          25,042
---------------------------------------------------------------------------------------------------------
Total operating expenses                           98,222          71,775         192,704         139,929
---------------------------------------------------------------------------------------------------------

Operating income                                   19,991          16,353          34,207          29,844
Interest expense                                     (156)           (201)           (310)           (333)
Interest income                                     3,097           1,674           5,679           3,405
---------------------------------------------------------------------------------------------------------

Income before taxes                                22,932          17,826          39,576          32,916
Income tax provision                                6,421           4,991          11,081           9,216
---------------------------------------------------------------------------------------------------------
Net income                                       $ 16,511         $12,835        $ 28,495        $ 23,700
=========================================================================================================

Net income per share
 Basic                                              $0.19           $0.15           $0.33           $0.27
=========================================================================================================
 Diluted                                            $0.18           $0.15           $0.31           $0.27
=========================================================================================================

Weighted average number of shares (000s)
 Basic                                             87,706          85,970          87,349          86,320
=========================================================================================================
 Diluted                                           92,345          86,808          91,935          87,320
=========================================================================================================
</TABLE>


                           (See accompanying notes)

                                       3
<PAGE>

                              COGNOS INCORPORATED

                          CONSOLIDATED BALANCE SHEETS

                             (US$000s, U.S. GAAP)
<TABLE>
<CAPTION>
                                                              August 31,        February 29,
                                                                   2000                2000
--------------------------------------------------------------------------------------------
Assets                                                        (Unaudited)
<S>                                                         <C>               <C>
Current assets
 Cash and cash equivalents                                      $175,536            $132,435
 Short-term investments                                           47,716              64,284
 Accounts receivable                                             107,032             107,823
 Inventories                                                         773                 806
 Prepaid expenses                                                 10,211               7,840
--------------------------------------------------------------------------------------------
                                                                 341,268             313,188
Fixed assets                                                      61,819              44,835
Intangible assets                                                 19,727              21,863
--------------------------------------------------------------------------------------------
                                                                $422,814            $379,886
============================================================================================

Liabilities

Current liabilities
 Accounts payable                                               $ 22,117            $ 22,908
 Accrued charges                                                  21,564              17,540
 Salaries, commissions, and related items                         21,789              24,024
 Income taxes payable                                              6,189               3,548
 Current portion of long-term debt                                 2,091               2,176
 Deferred revenue                                                 74,769              76,537
--------------------------------------------------------------------------------------------
                                                                 148,519             146,733
Long-term liabilities                                              2,940               2,699
Deferred income taxes                                             14,941              15,150
--------------------------------------------------------------------------------------------
                                                                 166,400             164,582
--------------------------------------------------------------------------------------------

Stockholders' Equity
Capital stock
 Common shares  (August 31, 2000 - 87,923,232;
               February 29, 2000 - 86,657,578 )                  122,752             106,936
Retained earnings                                                141,121             114,601
Accumulated comprehensive items                                   (7,459)             (6,233)
--------------------------------------------------------------------------------------------
                                                                 256,414             215,304
--------------------------------------------------------------------------------------------
                                                                $422,814            $379,886
============================================================================================
</TABLE>

                           (See accompanying notes)

                                       4
<PAGE>

                              COGNOS INCORPORATED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (US$000s, U.S. GAAP)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                             Six months ended
                                                                                August 31,
--------------------------------------------------------------------------------------------------
                                                                               2000           1999
--------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>
Cash provided by (used in) operating activities
 Net income                                                                $ 28,495       $ 23,700
 Non-cash items
  Depreciation and amortization                                              11,384          8,980
  Deferred income taxes                                                          18          1,640
  Loss on disposal of fixed assets                                              213             56
--------------------------------------------------------------------------------------------------
                                                                             40,110         34,376
 Change in non-cash working capital
  Increase in accounts receivable                                            (1,814)        (1,244)
  Decrease (increase) in inventory                                               19           (124)
  Increase in prepaid expenses                                               (2,595)        (1,625)
  Decrease in accounts payable                                                 (166)        (3,127)
  Increase (decrease) in accrued charges                                      4,333           (117)
  Decrease in salaries, commissions, and related items                       (1,644)        (5,569)
  Increase (decrease) in income taxes payable                                 2,689         (3,941)
  Increase (decrease) in deferred revenue                                       (63)         1,571
--------------------------------------------------------------------------------------------------
                                                                             40,869         20,200
--------------------------------------------------------------------------------------------------
Cash provided by (used in) investing activities
 Additions to fixed assets                                                  (26,594)       (11,848)
 Maturity of short-term investments                                          91,820        116,024
 Purchase of short-term investments                                         (75,599)       (75,965)
 Acquisition costs                                                             (854)        (2,562)
--------------------------------------------------------------------------------------------------
                                                                            (11,227)        25,649
--------------------------------------------------------------------------------------------------
Cash provided by (used in) financing activities
 Issue of common shares (net)                                                15,882          2,301
 Repurchase of shares                                                        (2,041)       (18,488)
 Repayment of long-term debt                                                    223           (464)
 Long-term payments                                                             163             90
--------------------------------------------------------------------------------------------------
                                                                             14,227        (16,561)
--------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash                                        (768)           687
--------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                    43,101         29,975
Cash and cash equivalents, beginning of period                              132,435         93,617
--------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                    175,536        123,592
Short-term investments, end of period                                        47,716         16,147
--------------------------------------------------------------------------------------------------
Cash, cash equivalents, and short-term investments, end of period          $223,252       $139,739
==================================================================================================
</TABLE>


                           (See accompanying notes)

                                       5
<PAGE>

                              COGNOS INCORPORATED

           CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
        (All amounts in United States dollars, unless otherwise stated)


1. Basis of Presentation

   The accompanying unaudited consolidated financial statements have been
   prepared by the Corporation in United States (U.S.) dollars and in accordance
   with generally accepted accounting principles (GAAP) in the U.S., applied on
   a consistent basis. These unaudited condensed notes to the consolidated
   financial statements should be read in conjunction with the audited financial
   statements and notes included in the Corporation's Annual Report for the
   fiscal year ended February 29, 2000.

   The preparation of these unaudited consolidated financial statements in
   conformity with GAAP requires management to make estimates and assumptions
   that affect the amounts reported in the consolidated financial statements and
   the accompanying notes. In the opinion of Management, these unaudited
   consolidated financial statements reflect all adjustments (which include only
   normal, recurring adjustments) necessary to state fairly the results for the
   periods presented. Actual results could differ from these estimates and the
   operating results for the interim periods presented are not necessarily
   indicative of the results expected for the full year.

   All information is presented in U.S. dollars, unless otherwise stated.


2. Revenue Recognition

   The Corporation recognizes revenue in accordance with Statement of Position
   (SOP) 97-2, Software Revenue Recognition, issued by the American Institute of
   Certified Public Accountants.

   Substantially all of the Corporation's product license revenue is earned from
   licenses of off-the-shelf software requiring no customization. Revenue from
   these licenses is recognized when all of the following criteria are met:
   persuasive evidence of an arrangement exists, delivery has occurred, the fee
   is fixed or determinable, and collectibility is probable. If a license
   includes the right to return the product for refund or credit, revenue is
   recognized net of an allowance for estimated returns provided all the
   requirements of SOP 97-2 have been met.

   Revenue from product support contracts is recognized ratably over the life of
   the contract. Incremental costs directly attributable to the acquisition of
   product support contracts are deferred and expensed in the period the related
   revenue is recognized.

   Revenue from education, consulting, and other services is recognized at the
   time such services are rendered.

   For contracts with multiple obligations (e.g. deliverable and undeliverable
   products, support obligations, education, consulting and other services), the
   Corporation allocates revenue to

                                       6
<PAGE>

                              COGNOS INCORPORATED

           CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
        (All amounts in United States dollars, unless otherwise stated)


   each element of the contract based on objective evidence, specific to the
   Corporation, of the fair value of the element.


3. Income Taxes

   The Corporation provides for income taxes in its quarterly unaudited
   financial statements based on the estimated effective tax rate for the full
   fiscal year.


4. Net Income per Share

   The reconciliation of the numerator and denominator for the calculation of
   basic and diluted net income per share is as follows: (000s, except per-share
   amounts)

<TABLE>
<CAPTION>
                                                        Three months ended                 Six months ended
                                                            August 31,                        August 31,
                                                  -----------------------------    -------------------------------
                                                      2000            1999              2000             1999
                                                  -------------    ------------    --------------    -------------
<S>                                                 <C>              <C>             <C>               <C>
Basic Net Income per Share
 Net income                                             $16,511         $12,835           $28,495          $23,700
                                                  =============    ============    ==============    =============
 Weighted average number of shares outstanding
                                                         87,706          85,970            87,349           86,320
                                                  =============    ============    ==============    =============
 Basic net income per share                             $  0.19         $  0.15           $  0.33          $  0.27
                                                  =============    ============    ==============    =============

Diluted Net Income per Share
 Net income                                             $16,511         $12,835           $28,495          $23,700
                                                  =============    ============    ==============    =============
 Weighted average number of shares outstanding
                                                         87,706          85,970            87,349           86,320
 Dilutive effect of stock options                         4,639             838             4,586            1,000
                                                  -------------    ------------    --------------    -------------
 Adjusted weighted average number of shares
  outstanding                                            92,345          86,808            91,935           87,320

                                                  =============    ============    ==============    =============
 Diluted net income per share                           $  0.18         $  0.15           $  0.31          $  0.27
                                                  =============    ============    ==============    =============
</TABLE>

                                       7
<PAGE>

                              COGNOS INCORPORATED

           CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
        (All amounts in United States dollars, unless otherwise stated)


5. Comprehensive Income

   Comprehensive Income includes net income and "other comprehensive income."
   Other comprehensive income refers to changes in the balances of revenues,
   expenses, gains and losses that are recorded directly as a separate component
   of Stockholders' Equity and excluded from net income.

   For the quarter ended August 31, 2000, the Corporation had other
   comprehensive income of $578,000 compared to other comprehensive expense of
   $544,000 for the quarter ended August 31, 1999. These amounts relate to
   foreign currency translation adjustments from those subsidiaries not using
   the U.S. dollar as their functional currency. Total comprehensive income was
   $17,089,000 and $12,291,000 for the quarters ended August 31, 2000 and 1999,
   respectively.

   The Corporation had other comprehensive expense of $1,226,000 for the six
   months ended August 31, 2000 and other comprehensive income of $576,000 for
   the six months ended August 31, 1999. Total comprehensive income was
   $27,269,000 and $24,276,000 for the six months ended August 31, 2000 and
   1999, respectively.


6. Segmented Information

   The Corporation has one reportable segment--computer software products.


7. Acquisition

   On June 1, 2000, the Corporation acquired Powerteam OY, the Corporation's
   distributor in Finland. The Corporation currently estimates that the
   shareholders of Powerteam OY will receive approximately $2.3 million in cash
   over two years and could also receive, in contingent consideration, an amount
   not to exceed $0.5 million over the next three years.

   The acquisition has been accounted for using the purchase method. The results
   of the acquired company are combined with those of the Corporation from the
   date of the acquisition.


8. Two-for-one Stock Split

   On April 6, 2000 the Board of Directors of the Corporation authorized a two-
   for-one stock split, effected in the form of a stock dividend, payable on or
   about April 27, 2000, to shareholders of record at the close of business on
   April 20, 2000. All share and per-share amounts have been adjusted for the
   split.

                                       8
<PAGE>

                              COGNOS INCORPORATED

           CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
        (All amounts in United States dollars, unless otherwise stated)


9.  Subsequent Event

    On September 21, 2000, the Corporation acquired NoticeCast Software Ltd.,
    based in Twickenham, United Kingdom. NoticeCast's Enterprise Event
    Management Software monitors business processes and delivers timely business
    intelligence notifications to business users across the enterprise via e-
    mail on their personal computer, hand-held or wireless device. The
    Corporation currently estimates that the shareholders of NoticeCast Software
    Ltd. will receive approximately $9 million in cash on closing and 148,468
    shares of the Corporation's common stock valued at approximately $6 million
    over two years. The shares are being held in escrow by the Corporation and
    will be released on the second anniversary of the closing of the
    transaction. Upon closing, this acquisition is expected to result in a
    charge against after-tax income of approximately $3 million, or $0.03 per
    share, as a write-off of in-process research and development under U.S.
    Generally Accepted Accounting Principles.

    The acquisition will be accounted for using the purchase method. The results
    of the acquired company will be combined with those of the Corporation from
    the date of the acquisition.


10. Accounting Pronouncements

    In June 1998, the FASB issued Statement No. 133, Accounting for Derivative
    Instruments and Hedging Activities, which establishes standards for
    derivative instruments and hedging activities. It requires that all
    derivatives be recognized as either assets or liabilities on the Balance
    Sheet and be measured at fair value. This Statement is effective for fiscal
    years beginning after June 15, 2000, which is the fiscal year beginning
    March 1, 2001 for the Corporation. Prior periods should not be restated. The
    Corporation has not yet quantified the impact, if any, of this pronouncement
    on its consolidated financial statements.

    In December 1999, the Securities and Exchange Commission (SEC) issued Staff
    Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial
    Statements, which was amended in March 2000 by SAB 101A, and in June 2000 by
    SAB 101B. The SAB summarizes certain of the SEC staff views in applying
    generally accepted accounting principles to revenue recognition in financial
    statements. This SAB is effective beginning the Corporation's fourth fiscal
    quarter of fiscal 2001. The Corporation does not expect the adoption of this
    SAB to have a material impact on its results of operations or financial
    position.

                                       9
<PAGE>

Item 2.
                              COGNOS INCORPORATED

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 (in United States dollars, unless otherwise indicated, and in accordance with
                                  U.S. GAAP)


The following information should be read in conjunction with the unaudited
Consolidated Financial Statements and Notes included in Item 1 of this Quarterly
Report and can also be read in conjunction with the audited Consolidated
Financial Statements and Notes, and Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Corporation's
Annual Report for the fiscal year ended February 29, 2000 (fiscal 2000).


RESULTS OF OPERATIONS
---------------------

Revenue for the quarter ended August 31, 2000 was $118.2 million, a 34% increase
from revenue of $88.1 million for the same quarter last year. Pretax income for
the quarter ended August 31, 2000 was $22.9 million compared to pretax income of
$17.8 million in the same quarter last year. Net income for the current quarter
was $16.5 million compared to net income of $12.8 million for the same quarter
last year. Diluted net income per share was $0.18 for the current quarter,
compared to $0.15 for the same quarter last year. Basic net income per share was
$0.19 and $0.15 for quarters ending August 31, 2000 and August 31, 1999,
respectively.

Revenue for the six months ended August 31, 2000 was $226.9 million, a 34%
increase from revenue of $169.8 million for the same period last year. Pretax
income for the six months ended August 31, 2000 was $39.6 million compared to
pretax income of $32.9 million in the same period last year. Net income for the
current six months was $28.5 million compared to net income of $23.7 million for
the same period last year. Diluted net income per share was $0.31 for the
current six months, compared to $0.27 for the same period last year. Basic net
income per share was $0.33 and $0.27 for the six month periods ending August 31,
2000 and August 31, 1999, respectively.

Total operating expenses for the quarter ended August 31, 2000 were $98.2
million, a 37% increase from operating expenses of $71.8 million for the same
quarter last year. Operating margins for the quarter ended August 31, 2000 were
17%, compared to 19% for the same quarter last year.

Total operating expenses for the six months ended August 31, 2000 were $192.7
million, a 38% increase from operating expenses of $139.9 million for the same
period last year. Operating margins for the six months ended August 31, 2000
were 15%, compared to 18% for the same period last year.

                                       10
<PAGE>

The following table sets out, for the periods indicated, the percentage that
each income and expense item bears to revenue, and the percentage change of each
item as compared to the indicated prior period.

<TABLE>
<CAPTION>
                                                Percentage of Revenue                           Percentage Change
                                    ------------------------------------------              -------------------------
                                    Three months ended        Six months ended              Three              Six
                                        August 31,               August 31,                 months            months
                                    ------------------        ----------------
                                                                                                ended August 31,
                                     2000        1999          2000      1999                     1999 to 2000
                                    ------      ------        ------    -------             -------------------------
<S>                                 <C>         <C>           <C>       <C>                 <C>               <C>
Revenue.....................        100.0%       100.0%       100.0%     100.0%             34.1%             33.7%
                                    -----        -----        -----      -----
Operating expenses
Cost of product license.....          1.5          1.1          1.5        1.2              71.1              67.5
Cost of product support.....          3.4          3.8          3.7        3.8              22.0              29.8
Selling, general, and
 administrative.............         64.2         61.9         65.4       62.7              39.1              39.6

Research and development....         14.0         14.6         14.3       14.7              28.5              29.2
                                    -----        -----        -----      -----
Total operating expenses....         83.1         81.4         84.9       82.4              36.9              37.7
                                    -----        -----        -----      -----

Operating income............         16.9         18.6         15.1       17.6              22.3              14.6
Interest expense............         (0.1)        (0.2)        (0.1)      (0.2)            (22.4)             (6.9)
Interest income.............          2.6          1.8          2.5        2.0              85.0              66.8
                                    -----        -----        -----      -----
Income before taxes.........         19.4         20.2         17.5       19.4              28.6              20.2
Income tax provision........          5.4          5.6          4.9        5.4              28.7              20.2
                                    -----         ----        -----      -----
Net income..................         14.0%        14.6%        12.6%      14.0%             28.6%             20.2%
                                    =====         ====        =====      =====
</TABLE>



Revenue

The Corporation's total revenue was $118.2 million for the quarter ended August
31, 2000, an increase of $30.1 million or 34%, compared to the quarter ended
August 31, 1999. The Corporation's total revenue was $226.9 million for the six
months ended August 31, 2000, an increase of $57.1 million or 34%, compared to
the six months ended August 31, 1999. The Corporation operates internationally,
with a substantial portion of its business conducted in foreign currencies.
Accordingly, the Corporation's results are affected by year-over-year exchange
rate fluctuations of the United States dollar relative to various European
currencies, to the Canadian dollar, and to a lesser extent, other foreign
currencies. Foreign exchange rate fluctuations reduced the overall revenue
increase by five and four percentage points for the quarter and the six months
ended August 31, 2000, respectively.

The Corporation's growth in total revenue was derived primarily from the
increased revenue attributable to the licensing, supporting and servicing of the
Corporation's business intelligence products, PowerPlay(R), Impromptu(R), Cognos
Query, Cognos Visualizer, DecisionStream(TM), Scenario(TM), Cognos Suite,
4Thought(TM), Cognos Finance, Cognos NovaView(TM), Cognos e-Applications and
Cognos Accelerator(TM) for SAP. Total revenue (license, support, and services
revenue) derived from these products was $106.8 million in the quarter ended
August 31, 2000, an increase of $32.9 million or 44%, and was $202.0 million for
the six months ended August 31, 2000 an increase of $62.7 million or 45% when
compared to the corresponding periods in the

                                       11
<PAGE>

prior fiscal year. Total revenue from these business intelligence products was
90% and 84% of total revenue for the quarters ended August 31, 2000 and August
31, 1999, respectively, whereas these percentages on a year-to-date basis were
89% and 82%, respectively.

The Corporation believes that its business intelligence products address the
current market need for distributing corporate information to the end user's
desktop in an extended enterprise environment of corporate intranets, extranets,
and client/server networks. In earlier years the Corporation addressed this
opportunity with the release of Web-based products: PowerPlay Web, Impromptu Web
Reports and Cognos Query. While the Corporation believes that there is a market
opportunity for Web-based decision support solutions, there can be no assurance
of the rate or extent of growth of this market, or that the Corporation will be
successful in continuing to develop products that will effectively address this
market.

Total revenue (license, support, and services revenue) from the Corporation's
application development tools, PowerHouse and Axiant, was $11.4 million for the
quarter ended August 31, 2000, a decrease of $2.8 million or 19% from the
corresponding period in the prior fiscal year, and was $24.9 million for the six
months ended August 31, 2000, a decrease of $5.5 million or 18% when compared to
the corresponding six month period in fiscal 2000. The Corporation believes
that, in the long-term, revenues from these products will continue to decline.

The growth in total revenue from the three revenue categories in the quarter
ended August 31, 2000 from August 31, 1999 was as follows: a 38% increase in
product license revenue, a 26% increase in product support revenue, and an 37%
increase in services revenue. The growth for the same categories for the six
months was as follows: 42%, 24% and 30%, respectively.


Product License Revenue
-----------------------

Product license revenue was $61.5 million in the quarter ended August 31, 2000,
an increase of $17.0 million or 38%, and was $118.2 million for the six months
ended August 31, 2000, an increase of $34.9 million or 42% compared to the
corresponding periods in the prior fiscal year. The increase in product license
revenue for both periods was predominantly due to the performance of the
Corporation's business intelligence products. Product license revenue accounted
for 52% of total revenue in the quarter ended August 31, 2000, compared to 50%
for the corresponding quarter in the prior fiscal year, and accounted for 52% of
total revenue for the six months ended August 31, 2000, compared to 49% for the
corresponding period in the prior fiscal year.

Product license revenue from the business intelligence products was $58.8
million for the quarter ended August 31, 2000, an increase of $18.2 million or
45%, and was $111.1 million for the six months ended August 31, 2000, an
increase of $37.0 million or 50% compared to the corresponding periods in the
prior fiscal year. Product license revenue from these business intelligence
products accounted for 96% and 91% of total product license revenue for the
quarters ended August 31, 2000 and 1999, respectively. On a year-to-date basis,
the Corporation derived 94% of product license revenue from these products,
compared to 89% in the corresponding period last year.

Product license revenue from the application development tools was $2.7 million
for the quarter ended August 31, 2000, a decrease of $1.2 million or 32%, and
was $7.1 million for the six months ended August 31, 2000, a decrease of $2.2
million or 23% compared to the

                                       12
<PAGE>

corresponding periods in the prior fiscal year. Over several of the past fiscal
years, the Corporation has been experiencing a decline in product license
revenue in this market which is consistent, in the Corporation's view, with the
market trend away from proprietary systems and host-based computing toward
industry-standard systems, corporate intranets, extranets, client/server
technology and packaged applications products. The Corporation expects that, in
the long term, the trend of decreasing product license revenue from these
products will continue.

There can be no assurance that increases in total product license revenue will
continue to occur, or occur to the same extent to which they have historically
occurred.


Product Support Revenue
-----------------------

Product support revenue was $35.7 million in the quarter ended August 31, 2000,
an increase of $7.4 million or 26%, and was $69.0 million for the six months
ended August 31, 2000, an increase of $13.2 million or 24% compared to the
corresponding periods in the prior fiscal year. The increase in the dollar
amounts was the result of the expansion of the Corporation's customer base, as
well as the renewal of support contracts. The product support revenue associated
with the expansion of the Corporation's customer base has exceeded the rate of
non-renewals of support contracts.

Product support revenue accounted for 30% and 32% of the Corporation's total
revenue for each of the quarters ended August 31, 2000, and 1999, respectively
and accounted for 30% of total revenue for the six months ended August 31, 2000
and 33% for the corresponding period in the prior fiscal year.

Total product support revenue from the business intelligence products comprised
77% and 65% of the total product support revenue for the quarters ended August
31, 2000, and August 31, 1999, respectively and comprised 75% and 64% of the
total product support revenue for the six months ended August 31, 2000 and
August 31, 1999, respectively. Total support revenue from the business
intelligence products increased by 48% in the quarter ended August 31, 2000, and
total support revenue from the application development tools decreased by 15%,
compared to the corresponding quarter in the prior fiscal year. For the six
months ended August 31, 2000, total support revenue from the business
intelligence products increased by 46%, whereas total support revenue from the
application development tools decreased by 16%, compared to the corresponding
period in the prior fiscal year.

There can be no assurance that increases in total product support revenue will
continue to occur, or occur to the same extent to which they have historically
occurred.


Services Revenue
----------------

Services revenue (training, consulting, and other revenue) was $21.0 million in
the quarter ended August 31, 2000, an increase of $5.6 million or 37%, and was
$39.7 million, an increase of $9.1 million or 30% for the six months ended
August 31, 2000 compared to the corresponding periods in the prior fiscal year.
Services revenue accounted for 18% of the Corporation's total revenue for both
the quarter and six months ended August 31, 2000, compared to 17% and 18% for
the quarter and six months ended, respectively, in the prior fiscal year. The
increase in the dollar amounts was primarily attributable to an increase in
consulting revenue, and, to a lesser extent,

                                       13
<PAGE>

education revenue associated with the Corporation's business intelligence
products, consistent with the trend in product license revenue for these
products.

In the quarter ended August 31, 2000, services revenue associated with the
business intelligence products contributed $20.6 million, an increase of $5.7
million or 38%, and contributed $39.0 million, an increase of $9.3 million or
31% for the six months ended August 31, 2000 compared to the corresponding
periods in the prior fiscal year. This increase was offset by a decline of $0.1
million or 15% and $0.2 million or 21%, respectively, in total services revenue
associated with the Corporation's application development tools for the same
periods. Services revenue associated with the business intelligence products
contributed 98% of the total services revenue for both the quarter and six
months ended August 31, 2000 compared to 97% for both the corresponding periods
in the prior fiscal year.

There can be no assurance that increases in total services revenue will continue
to occur, or occur to the same extent to which they have historically occurred.


Cost of Product License

The cost of product license consists primarily of royalties for technology
licensed from third parties, as well as the costs of materials and distribution
related to licensed software.

The cost of product license revenue was $1.7 million, an increase of $0.7
million or 71% in the quarter ended August 31, 2000, compared to the
corresponding period in the prior fiscal year and was $3.4 million, for the six
months ended August 31, 2000, a 67% increase from the corresponding period in
the prior fiscal year. These costs represented 3% of product license revenue for
the three and six months ended August 31, 2000, as compared to 2% for the three
and six months ended August 31, 1999. The increases in both the quarter and the
six months ended August 31, 2000 were the result of an increase in royalty
expense.

Cost of Product Support

The cost of product support includes the costs associated with resolving
customer inquiries and other telesupport activities, royalties in respect of
technological support received from third parties, and the cost of materials
delivered in connection with enhancement releases.

The cost of product support revenue was $4.1 million, an increase of $0.7
million or 22% in the quarter ended August 31, 2000, and was $8.3 million, an
increase of $1.9 million or 30% for the six months ended August 31, 2000,
compared to the corresponding periods in the prior fiscal year. The increase in
the dollar amounts for both periods was primarily due to increases in
telesupport costs, and to a lesser extent, release costs.

The cost of product support represented 11% and 12% of total product support
revenue for the three and six months ended August 31, 2000, respectively,
compared to 12% for both the corresponding periods in the prior fiscal year.

                                       14
<PAGE>

Selling, General, and Administrative

Selling, general, and administrative (SG&A) expenses were $75.9 million, an
increase of $21.3 million or 39% in the quarter ended August 31, 2000, and were
$148.6 million, an increase of $42.2 million or 40% for the six months ended
August 31, 2000, compared to the corresponding periods in the prior fiscal year.
These costs increased as a percentage of revenue, representing 64% and 65% for
the three and six months ended August 31, 2000, respectively compared to 62% and
63% for the corresponding periods in the prior fiscal year.

The increase in these expenses was predominantly because of increased staffing
and related compensation expenses. The increase in the average number of
employees within SG&A was 31% for both the three and six months ended August 31,
2000, when compared to the corresponding periods in the prior fiscal year. The
Corporation has stepped up its investments in its products, distribution and
service strength to focus its actions on opportunities for revenue growth.


Research and Development

Gross research and development (R&D) costs were $16.6 million, an increase of
$3.7 million or 28% in the quarter ended August 31, 2000, and were $32.7
million, an increase of $7.3 million or 29% for the six months ended August 31,
2000, compared to the corresponding periods in the prior fiscal year. The
increase was predominantly the result of increases associated with higher
staffing levels and related compensation expenses, as well as increases in
services purchased externally. The increase in the average number of employees
within R&D was 13% and 15% for the three and six months ended August 31, 2000,
respectively, when compared to the corresponding periods in the prior fiscal
year.

During the six months ended August 31, 2000 the Corporation continued to invest
in R&D activities for its business intelligence solutions, including further
development of e-Application packages and continued investment in the existing
Cognos enterprise business intelligence platform. During the quarter ended
August 31, 2000 the Corporation released DecisionStream 6.5, the data mart
creation component of the BI platform which unites data from disparate sources
and consolidates it into data marts. In addition to the e-Application packages
currently available for Sales Analysis, Inventory Analysis and Financial
Analysis the Corporation announced the e-Commerce Analysis application for the
IBM WebSphere Commerce Suite during the quarter ended August 31, 2000. During
the quarter ended August 31, 2000, the Corporation also announced version 5.0 of
Cognos Finance, a solution that delivers integrated budgeting, forecasting,
consolidation and financial reporting and analysis in one comprehensive system,
and version 1.5 of Cognos Visualizer which has significant enhancements for
scorecarding and key performance indicator applications displaying these metrics
in a single presentation and supports Web deployment in a UNIX based
environment. As indicated in the preceding discussion on Revenue, the
Corporation believes that its business intelligence products address the current
market need for distributing corporate information to the end user's desktop in
an extended enterprise environment of corporate intranets, extranets and
client/server networks.

Net R&D expenses were $16.5 million, an increase of $3.7 million or 29% in the
quarter ended August 31, 2000, and were $32.4 million, an increase of $7.4
million or 29% for the six months

                                       15
<PAGE>

ended August 31, 2000, compared to the corresponding periods in the prior fiscal
year. The increase was the result of the increased gross R&D expenses as
outlined above.

Software development costs are expensed as incurred unless they meet generally
accepted accounting criteria for deferral and amortization. Software development
costs incurred prior to the establishment of technological feasibility do not
meet these criteria, and are expensed as incurred. Capitalized costs are
amortized over a period not exceeding 36 months. No costs were deferred in
either quarter. Costs were not deferred in the period because either no projects
met the criteria for deferral or the period between (i) achieving technological
feasibility and (ii) the general availability of the product was short, and the
associated costs were immaterial.

The following table sets out the components of the Corporation's research and
development, as well as the percentages of revenue, for the periods indicated.


<TABLE>
<CAPTION>
                                                       Three months ended        Six months ended
                                                           August 31,                August 31,
                                                       -------------------      -------------------
                                                        2000        1999         2000        1999
                                                       -------     -------      -------     -------
                                                                       (US$000s)
       <S>                                             <C>         <C>          <C>         <C>
       Gross research and development costs........    $16,647     $12,978      $32,653     $25,309
       Government allowance........................       (140)       (133)        (292)       (267)
       Amortization of capitalized R&D.............          -           -            -           -
                                                       -------     -------      -------     -------
       Research and development expenses...........    $16,507     $12,845      $32,361     $25,042
                                                       =======     =======      =======     =======

       Percentage of total revenue
        Gross research and development.............         14%         15%          14%         15%
        Research and development...................         14%         15%          14%         15%
</TABLE>


Interest Income and Expense

Net interest income was $2.9 million in the quarter ended August 31, 2000, an
increase of $1.5 million or 100% for the quarter, and was $5.4 million, an
increase of $2.3 million or 75% for the six months ended August 31, 2000,
compared to the corresponding periods in the prior fiscal year. The average
portfolio balances were higher in both current fiscal periods and effective
interest rates were higher as compared to the corresponding periods in the prior
fiscal year.

Income Tax Provision

The Corporation's tax rate is affected by the relative profitability of its
operations in various geographic regions. In the three and six months ended
August 31, 2000, the Corporation recorded an income tax provision of $6.4
million and $11.1 million respectively, which represents an effective income
tax rate of 28%. This effective rate is consistent with the effective rate used
in the three and six months ended August 31, 1999.

                                       16
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

As of August 31, 2000 the Corporation had $223.3 million in cash, cash
equivalents, and short-term investments, a increase of $26.5 million from
February 29, 2000. In addition, the Corporation has an unsecured credit facility
that includes an operating line and foreign exchange conversion facilities. The
operating line permits the Corporation to borrow funds or issue letters of
credit or guarantee up to Cdn$15.0 (US$10.2) million, subject to certain
covenants. As of August 31, 2000, there were no direct borrowings under this
operating line. As discussed further below, the Corporation has foreign exchange
conversion facilities that allow it to hold foreign exchange contracts of
approximately Cdn$130.0 (US$88.3) million outstanding at any one time.

As of August 31, 2000, the Corporation had a total of $5.0 million of long-term
indebtedness (including the current portion of long-term debt), consisting of a
mortgage and other long-term liabilities. As of August 31, 2000, working capital
was $192.7 million, an increase of $26.3 million from February 29, 2000,
primarily because of increases in cash and prepaid expenses, and decreases in
salaries, commissions and related items, and deferred product support revenue,
which were partially offset by an decreases in short-term investments and
increases in accrued charges and income taxes payable. The change in working
capital for the six months ended August 31, 2000 included the use, by the
Corporation, of $2.0 million in cash for the repurchase of 50,000 of its common
shares of stock during the period.

Cash provided by operating activities (after changes in non-cash working capital
items) for the six months ended August 31, 2000 was $40.9 million, a $20.7
million increase when compared to the corresponding period in the prior fiscal
year. This increase as compared to the prior period was primarily due to the
increase in net income, and an decrease in the level of non-cash working capital
requirements during the current six month period.

Cash used in investing activities was $11.2 million for the six months ended
August 31, 2000 compared to $25.6 million provided by investing activities for
the corresponding period in the prior fiscal year. During the current six month
period, the Corporation received $16.2 million related to the activity in short-
term investments (net of maturities) compared to $40.1 million in the
corresponding period in the prior fiscal year. There were acquisition costs
totaling $0.9 million in the six months ended August 31, 2000 relating to the
Corporation's purchase of its distributor in Finland.  In the corresponding
period in the prior fiscal year, the Corporation spent $2.6 million related to
the purchase of the Corporation's distributor in Switzerland and the purchase of
the entire outstanding minority interest in the Corporation's subsidiary in
Singapore.

During fiscal 2000 the Corporation began the construction of a second building
on the site of its corporate headquarters in Ottawa. This expansion will
accommodate the continued growth of the Corporation and will allow for the
consolidation of a number of corporate operations in the Ottawa area. The
Corporation has invested approximately $14.9 million in the current year and
prior fiscal year and it is anticipated that costs will total $21 million when
the construction of this new facility is substantially complete in fiscal 2001.

The Corporation issued 1,315,000 common shares, valued at $13.9 million, during
the six months ended August 31, 2000 compared to the issuance of 324,000 shares
valued at $2.2 million for the same period in the prior fiscal year. The
issuance of shares in both periods was pursuant to the Corporation's stock
purchase plan and the exercise of stock options by employees, officers, and
directors. The Corporation's financing activities for both six month

                                       17
<PAGE>

periods also included the repurchase of its own common shares in the open
market. During the six months ended August 31, 2000, the Corporation repurchased
50,000 of its own shares at a cost of $2.0 million compared to 1,686,000 shares
repurchased at a cost of $18.5 million in the corresponding period in the prior
fiscal year.

The share repurchases made in the current six month period were part of an open
market share repurchase program. The program adopted in October 1999 expired on
October 8, 2000. This program enables the Corporation to purchase up to
4,200,000 (not more than 5% of those issued and outstanding) common shares
between October 9, 1999 and October 8, 2000. This program does not commit the
Corporation to make any share repurchases. Any purchases made, will be made on
The Nasdaq Stock Market at prevailing open market prices and paid out of general
corporate funds. All repurchased shares will be cancelled. Under this program
the Corporation repurchased 50,000 of its shares for $2.0 million in the six
months ended August 31, 2000.  During the term of the program the Corporation
repurchased a total of 150,000 of its shares for $3.4 million; all repurchased
shares were cancelled. In October 2000, the Corporation adopted a new program
that will enable it to purchase up to 4,403,510 common shares (not more than 5%
of those issued and outstanding) between October 9, 2000 and October 8, 2001.
Purchases will be made on the Nasdaq Stock Market at prevailing open market
prices and paid out of general corporate funds. This program does not commit the
Corporation to make any share repurchases. All repurchased shares will be
cancelled.

The Corporation's policy with respect to foreign currency exposure is to manage
its financial exposure to certain foreign exchange fluctuations with the
objective of neutralizing some of the impact of foreign currency exchange
movements. To achieve this objective, the Corporation enters into foreign
exchange forward contracts to hedge portions of the net investment in its
various subsidiaries. The Corporation enters into these foreign exchange forward
contracts with major Canadian chartered banks, and therefore does not anticipate
non-performance by these counterparties. The amount of the exposure on account
of any non-performance is restricted to the unrealized gains in such contracts.
As of August 31, 2000, the Corporation had foreign exchange forward contracts,
with maturity dates ranging from September 28, 2000 to December 21, 2000, to
exchange various foreign currencies in the amount of $11.1 million.

The Corporation anticipates that over the next twelve months its operations will
be financed by current cash balances and funds from operations. If the
Corporation were to require funds in excess of its current cash position to
finance its longer-term operations, the Corporation would expect to obtain such
funds from, one or a combination of, the expansion of its existing credit
facilities, or from public or private sales of equity or debt securities.


EUROPEAN ECONOMIC AND MONETARY UNION
------------------------------------

The euro currency was introduced on January 1, 1999, and the transition to this
new currency has associated with it many potential implications for businesses
operating in Europe including, but not limited to, products, information
technology, pricing, currency exchange rate risk and derivatives exposure,
continuity of material contracts, and potential tax consequences.

The new euro currency is to be introduced in stages over the course of a 3 1/2
year transition period. The Corporation believes the transition to the euro will
have limited longer-term implications on the Corporation's business. The
Corporation has taken steps in the transition to

                                       18
<PAGE>

the euro in the area of its internal processes and systems through identifying,
modifying, and testing these processes and systems to handle transactions
involving the euro in accordance with the regulations. The Corporation's
financial application systems represent the most significant internal systems
that are affected by the transition to the euro. The Corporation upgraded these
systems to a version that enables it, together with certain process changes and
modifications provided by the application vendor to its supported customers, to
handle the initial requirements for transactions involving the euro. The
Corporation continues to identify and, where necessary, modify its systems and
processes in order to handle the various stages of the euro implementation. The
Corporation is continuing to monitor its pricing in Europe, giving consideration
to the transition to the euro.

The Corporation believes that the costs relating to the conversion of its
internal systems and processes incurred to date, along with any future costs
relating to such conversions, will not have a material adverse effect on its
business, results of operations, or financial condition.


CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
----------------------------------------------

This Form 10-Q contains forward-looking statements relating to: our expectations
concerning future revenues and earnings, including future rates of growth, from
the licensing of our business intelligence and application development products
and related product support and services; the sufficiency of capital to meet our
working capital and capital expenditure requirements; future prospects of our
current and future products and our ability to compete in an intensely
competitive marketplace.

Forward-looking statements are subject to risks and uncertainties that may cause
future results to differ materially from those expected. There can be no
guarantee that future results will turn out as expected. Factors that may cause
such differences include, but are not limited to: our ability to continue to
grow at historical growth rates or to anticipate a decline in revenue from any
of our products; fluctuations in quarterly and annual operating results based on
historical patterns, which may cause our stock price to fluctuate or decline;
the rapid technological change and new product introductions and enhancements
that characterize the software markets we target; our reliance on partners and
other distribution channels to market and distribute our products and any
failure of these parties to do so; unauthorized use of our intellectual
property; the loss of rights to use software licensed to us by third parties;
the actions of our competitors in an intensely competitive marketplace; risks
inherent in international operations; our ability to identify, hire, train,
motivate and retain highly qualified management and other key personnel; our
ability to identify, pursue and complete acquisitions which could divert
management attention and financial resources and not produce desired business
results; our ability to address issues relating to the transition to the euro;
and volatility and fluctuation of our stock price. As a result of these, and
other factors, we may experience material fluctuations in future operating
results on a quarterly and annual basis, which could materially and adversely
affect our business, financial condition, operating results and stock price. We
typically realize a larger percentage of our annual revenue and earnings in the
fourth quarter of each fiscal year, and lower revenue and earnings in the first
quarter of the next fiscal year. A detailed discussion of each of these risk
factors is contained under the heading "Certain Factors That May Affect Future
Results" in our most recent Annual Report on Form 10-K filed with the United
States Securities and Exchange Commission.

                                       19
<PAGE>

Item 3.   Quantitative and Qualitative Disclosure about Market Risk
          ---------------------------------------------------------

Market risk represents the risk of loss that may impact our financial position
due to adverse changes in financial market prices and rates. Our market risk
exposure is primarily a result of fluctuations in interest rates and foreign
currency exchange rates. We do not hold or issue financial instruments for
trading purposes.


Interest Rate Risk

Our exposure to market rate risk for changes in interest rates relates primarily
to our investment portfolio. The investment of cash is regulated by our
investment policy of which the primary objective is security of principal. Among
other selection criteria, the investment policy states that the term to maturity
of investments cannot exceed one year in length. We do not use derivative
financial instruments in our investment portfolio.

Interest income on our cash, cash equivalents, and short-term investments is
subject to interest rate fluctuations, but we believe that the impact of these
fluctuations does not have a material effect on our financial position due to
the short-term nature of these financial instruments. The amount of our long-
term debt is immaterial. Our interest income and interest expense are most
sensitive to the general level of interest rates in Canada and the United
States. Sensitivity analysis is used to measure our interest rate risk. For the
quarter and six months ended August 31, 2000, a 100 basis-point adverse change
in interest rates would not have had a material effect on our consolidated
financial position, earnings, or cash flows.


Foreign Currency Risk

We operate internationally; accordingly, a substantial portion of our financial
instruments are held in currencies other than the United States dollar. Our
policy with respect to foreign currency exposure is to manage financial exposure
to certain foreign exchange fluctuations with the objective of neutralizing some
of the impact of foreign currency exchange movements. To achieve this objective,
we enter into foreign exchange forward contracts to hedge portions of the net
investment in various subsidiaries. The forward contracts are typically between
the United States dollar and the British pound, the German mark, and the
Australian dollar. Sensitivity analysis is used to measure our foreign currency
exchange rate risk. As of August 31, 2000, a 10% adverse change in foreign
exchange rates versus the U.S. dollar would not have had a material effect on
our reported cash, cash equivalents, and short-term investments.

                                       20
<PAGE>

PART II - OTHER INFORMATION
---------------------------

Item 1.  Legal Proceedings
         -----------------

On May 5, 2000 an action was filed in the United States District Court for the
Northern District of California against the Corporation and its subsidiary,
Cognos Corporation (collectively "Cognos") by Business Objects S.A.
("Complainant"), for alleged patent infringement. The complaint alleges that the
Corporation's Impromptu product infringes the Complainant's United States Patent
No. 5,555,403 entitled "Relational Database Access System using Semantically
Dynamic Objects". The complaint seeks relief in the form of an injunction
against the Corporation and unspecified damages. The Corporation believes the
complaint is without merit and intends to vigorously contest it. As this action
is at a very preliminary stage, the Corporation cannot estimate the financial
impact, if any, at this time.

In addition, the Corporation and its subsidiaries may, from time to time be
involved in other legal proceedings, claims, and litigation that arise in the
ordinary course of business which the Corporation believes would not reasonably
be expected to have a material adverse effect on the financial condition of the
Corporation.

Item 2.  Changes in Securities
         ---------------------

c)   On September 21, 2000, the Corporation acquired NoticeCast Software Ltd.,
     based in Twickenham, United Kingdom. NoticeCast's Enterprise Event
     Management Software monitors business processes and delivers timely
     business intelligence notifications to business users across the enterprise
     via e-mail on their personal computer, hand-held or wireless device. The
     Corporation currently estimates that the shareholders of NoticeCast
     Software Ltd. will receive approximately $9 million in cash on closing and
     148,468 shares of the Corporation's common stock valued at approximately $6
     million over two years. The shares are being held in escrow by the
     Corporation and will be released on the second anniversary of the closing
     of the transaction. The shares were issued in reliance upon an exemption
     from registration pursuant to Section 4(2) of the Securities Act of 1933.
     Upon closing, this acquisition is expected to result in a charge against
     after-tax income of approximately $3 million, or $ 0.03 per share, as a
     write-off of in-process research and development under U.S. Generally
     Accepted Accounting Principles.

     The acquisition will be accounted for using the purchase method. The
     results of the acquired company will be combined with those of the
     Corporation from the date of the acquisition.

                                       21
<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

(a)  The Corporation held its Annual Meeting of Shareholders on June 21, 2000.

(b)  At the meeting, it was resolved that those persons nominated as indicated
     below be elected as directors of the Corporation and that Ernst & Young LLP
     be reappointed as the Corporation's Auditors for the fiscal year ended
     February 28, 2001. The voting results of the meeting are presented in the
     following table:

                                Voting Results
                        Annual Meeting of Shareholders
                                 June 21, 2000

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                                         BROKER
-----------------------------------------------------------------------------------------------------------------------
                                               FOR               WITHHELD              NON VOTE               TOTAL
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Election of Directors
-----------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                       <C>                    <C>             <C>
John E. Caldwell                        60,728,015                 21,903                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
Douglas C. Cameron                      60,724,831                 25,087                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
Pierre Y. Ducros                        60,723,831                 26,087                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
Douglas J. Erwin                        60,722,025                 27,893                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
Robert W. Korthals                      60,722,185                 27,733                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
Candy M. Obourn                         60,725,515                 24,403                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
James M. Tory                           60,726,231                 23,687                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------
Renato Zambonini                        60,730,799                 19,119                      -         60,749,918
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
Reappointment of Auditors               60,735,749                 11,474                                60,747,223
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


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

(a)  Exhibits

          27 -  Financial Data Schedule
          99 -  Selected Consolidated Financial Statements in U.S. Dollars and
                   in accordance with Canadian Generally Accepted Accounting
                                  Principles

(b)  Reports on Form 8-K

There were no reports on Form 8-K filed during the three months ended August 31,
2000.

                                       22
<PAGE>

                                   SIGNATURE


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.


                                             COGNOS INCORPORATED
                                               (Registrant)


      October 12, 2000                            /s/ Donnie M. Moore
------------------------------             -------------------------------------
           Date                              Donnie M. Moore
                                             Senior Vice President, Finance and
                                             Administration (Principal Financial
                                             Officer and Chief Accounting
                                             Officer)

                                       23
<PAGE>

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT NO.                                   DESCRIPTION                                         PAGE
-----------                                   -----------                                         ----
<S>               <C>                                                                             <C>
       27         Financial Data Schedule

       99         Selected Consolidated Financial Statements in U.S. Dollars and in
                  accordance with Canadian Generally Accepted Accounting Principles              25-27
</TABLE>