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 December 31, 1995

                                       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: 0-12317

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

            DELAWARE                                     75-1558550
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                 Identification No.)

                               5080 Spectrum Drive
                                   Suite 400E
                               Dallas, Texas 75248
                    (Address of principal executive offices)
                                   (Zip code)

                                 (214) 386-0020
            (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 [ ]

As of January 31, 1996, there were 15,290,764  shares of the  registrant's  $.01
par value common stock outstanding.


<PAGE>





                         HOGAN SYSTEMS, INC.


                                INDEX

                    PART I. FINANCIAL INFORMATION


                                                                      Page No.
                                                                      --------

Item 1.     Financial Statements:

            Condensed Consolidated Balance Sheets -
              December 31, 1995 and March 31, 1995                      2-3

            Condensed Consolidated Statements of Income -
              Three months and Nine months ended
              December 31, 1995 and 1994                                 4

            Condensed Consolidated Statements of Cash Flows -
              Nine months ended December 31, 1995 and 1994               5

            Notes to Condensed Consolidated Financial Statements         6

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                       7-8



                  PART II. OTHER INFORMATION



Item 6(a).  Exhibits                                                     9

Item 6(b).  Reports on Form 8-K                                          9

Signatures                                                              10



Note: Items 1, 2, 3, 4 and  5 of Part II are omitted because they are not
      applicable.

                             - 1 -

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<TABLE>




                               HOGAN SYSTEMS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                     ASSETS
                                     ------
<CAPTION>
                                                                                     December 31,            March 31,
                                                                                         1995                   1995
                                                                                     ------------            ---------
<S>                                                                               <C>                        <C>
Current assets:
    Cash and cash equivalents                                                        $     5,043            $   7,764
    Accounts receivable, net of
      allowance for doubtful accounts of $993 and $911                                    43,748               40,577
    Deferred income taxes                                                                    905                  905
    Prepaid expenses and other current assets                                              1,645                1,685
                                                                                     -----------            ---------

      Total current assets                                                                51,341               50,931

Long-term receivables                                                                      1,370                  359
Property and equipment at cost, net of accumulated
    depreciation of $9,819 and $8,220                                                      6,459                7,236
Capitalized software costs, net of accumulated
    amortization of $15,794 and $10,894                                                   31,711               32,149
Intangible assets                                                                          4,731                5,136
Other assets                                                                               1,406                  870
                                                                                     -----------            ---------

    Total assets                                                                     $    97,018            $  96,681
                                                                                     ===========            =========

See accompanying notes to these condensed consolidated financial statements.

</TABLE>

                              - 2 -

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<TABLE>



                               HOGAN SYSTEMS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
<CAPTION>

                                                                                      December 31,           March 31,
                                                                                          1995                  1995
                                                                                      ------------           ---------
<S>                                                                                 <C>                 <C>
Current  liabilities:
    Accounts payable                                                                 $      4,533        $       5,666
    Accrued salary and employee benefits                                                    7,104                7,795
    Working capital line of credit                                                          1,500                1,920
    Deferred maintenance revenue                                                            8,493               11,741
    Deferred support revenue                                                                  628                1,011
    Other                                                                                   5,301                4,027
                                                                                     ------------        -------------
       Total current liabilities                                                           27,559               32,160

Deferred maintenance revenue                                                                2,841                3,092
Deferred income taxes                                                                       4,647                4,502
Other long-term liabilities                                                                    62                  257
                                                                                     ------------        -------------
       Total liabilities                                                                   35,109               40,011

Shareholders' equity:
    Preferred stock, no par value -
       authorized 1,000 shares - none issued
    Common stock, par value $.01 - authorized 50,000
       shares - issued  15,951  shares at December 31, 1995 and 15,078 shares at
       March 31, 1995 - outstanding
       15,263 and 14,390, respectively                                                        160                  151
    Capital in excess of par value                                                         49,219               44,618
    Foreign currency translation adjustments                                               (1,143)                (886)
    Retained earnings                                                                      23,410               18,636
                                                                                     ------------        -------------
                                                                                           71,646               62,519

       Less:  Treasury stock at cost, 688 shares                                           (5,849)              (5,849)
              Notes receivable from officers                                               (3,888)                   -
                                                                                     ------------        -------------
              Shareholders' equity                                                         61,909               56,670
                                                                                     ------------        -------------
       Total liabilities and shareholders' equity                                    $     97,018        $      96,681
                                                                                     ============        =============


See accompanying notes to these condensed consolidated financial statements.
</TABLE>

                              - 3 -

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<TABLE>



                               HOGAN SYSTEMS, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)

<CAPTION>
                                                                      Three                               Nine
                                                                   Months Ended                       Months Ended
                                                                   December 31,                       December 31,
                                                              1995             1994              1995             1994
                                                              ----             ----              ----             ----
<S>                                                    <C>              <C>              <C>              <C>

Revenues:
    Professional service fees                           $    17,039      $   15,481       $    51,324      $    44,753
    License fees                                                900             717             8,930            6,859
    Maintenance fees                                          5,204           4,118            14,015           11,897
                                                        -----------      ----------       -----------      -----------
        Total revenues                                       23,143          20,316            74,269           63,509

Expenses:
    Professional services                                    10,949          11,732            33,380           35,877
    Development and product support                           4,964           2,381            13,970            7,754
    Selling and marketing                                     3,966           3,544            12,540           10,702
    General and administrative                                2,347           2,012             6,759            6,030
                                                        -----------      ----------       -----------      -----------
        Total expenses                                       22,226          19,669            66,649           60,363
                                                        -----------      ----------       -----------      -----------

Operating income                                                917             647             7,620            3,146
Interest income(expense), net                                   104             (69)               80                5
                                                        -----------      ----------       -----------      -----------

Income before taxes                                           1,021             578             7,700            3,151
Provision for income taxes                                      357             271             2,926            1,421
                                                        -----------      ----------       -----------      -----------

Net income                                              $       664      $      307       $     4,774      $     1,730
                                                        ===========      ==========       ===========      ===========

Net income per common share                                   $0.04           $0.02             $0.31            $0.12
                                                              =====           =====             =====            =====

    Weighted average number
        of common shares                                     15,600          14,631            15,600           14,837
                                                        ===========      ==========       ===========      ===========

See accompanying notes to these condensed consolidated financial statements.

</TABLE>
                              - 4 -

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<TABLE>



                                    HOGAN SYSTEMS, INC.
                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (In thousands)

<CAPTION>
                                                                                                 Nine Months
                                                                                               Ended December 31,
                                                                                          1995                 1994
                                                                                          ------               -----
<S>                                                                                  <C>                  <C>
Cash flow from operating activities:
Net income                                                                           $      4,774         $      1,730
Adjustments to reconcile net income to cash used by operating activities:
    Depreciation and amortization                                                           6,905                3,979
    Provision for losses on accounts receivable                                                82                   90
    Foreign currency translation                                                             (257)                 229
    Changes in assets and liabilities:
        Accounts receivable                                                                (4,264)               4,004
        Prepaid expenses and other current assets                                              40                  (12)
        Accounts payable                                                                   (1,133)                 635
        Accrued salary and employee benefits                                                 (691)                (683)
        Deferred maintenance revenue                                                       (3,499)              (1,654)
        Deferred support revenue                                                             (383)                 538
        Deferred income taxes                                                                 145                  666
        Other assets                                                                         (536)                  56
        Other liabilities                                                                   1,027                  243
                                                                                     ------------         ------------
                                                                                            2,210                9,821
                                                                                     ------------         ------------
Cash flow from investing activities:
    Purchase of property and equipment                                                       (860)              (4,518)
    Additions to capitalized software                                                      (4,373)             (10,626)
                                                                                     ------------         ------------
                                                                                           (5,233)             (15,144)
                                                                                     ------------         ------------
Cash flow from financing activities:
    Cash dividend                                                                               -               (2,443)
    Exercise of stock options                                                                 722                   28
    Proceeds from working capital line of credit                                             (420)                   -
                                                                                     ------------         ------------
                                                                                              302               (2,415)
                                                                                     ------------         ------------
Net decrease in cash and cash equivalents                                                  (2,721)              (7,738)

Cash and cash equivalents at beginning of period                                            7,764               10,374
                                                                                     ------------         ------------
Cash and cash equivalents at end of period                                           $      5,043         $      2,636
                                                                                     ============         ============


See accompanying notes to these condensed consolidated financial statements.
</TABLE>

                              - 5 -
<PAGE>



                               HOGAN SYSTEMS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)     In the  opinion  of  management,  the  unaudited  financial  information
        contained herein reflects all adjustments  which are necessary to fairly
        state the Company's consolidated financial position and the consolidated
        results of its operations and cash flows for the periods presented.  All
        such adjustments are of a normal recurring  nature.  This report on Form
        10-Q should be read in conjunction with the Company's 1995 Annual Report
        on Form  10-K.  The  Company  presumes  that  users of the  accompanying
        interim  financial  information  have read or have access to the audited
        financial  statements  for  the  preceding  fiscal  year.   Accordingly,
        disclosure of  information  included in the Company's 1995 Annual Report
        on Form 10-K has been omitted. The results of operations for the quarter
        ended December 31, 1995, are not  necessarily  indicative of results for
        the fiscal year ending March 31, 1996.

(2)     On November 28, 1995 several of the Company's senior officers  exercised
        options to purchase the Company's common stock. The Company entered into
        loan agreements  with each of the officers for their  respective cost of
        exercise.  The  issuance  of  common  stock  and  the  associated  notes
        receivable from the officers are reflected in the  shareholders'  equity
        section of the condensed consolidated balance sheet.

(3)     On  December  13,  1995 the  Company  filed a report on Form 8-K for the
        purpose of  announcing  that on December  10, 1995 the Company  signed a
        definitive  agreement  to merge with The  Continuum  Company,  Inc.  The
        merger,  expected  to be  completed  in March,  1996,  is subject to the
        approval of the stockholders of each company.


                              - 6 -
<PAGE>



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


Results of Operations (In thousands, except per share data)
-----------------------------------------------------------

Revenues for the quarter ended December 31, 1995, aggregated $23,143 compared to
$20,316  for the  comparable  quarter  of the prior  fiscal  year.  The  Company
reported  net income of $664 ($.04 per share) as  compared to net income of $307
($.02 per share) for the quarter ended December 31, 1994.

For the nine-month  period ended  December 31, 1995,  revenues  totaled  $74,269
compared to $63,509 in the same period of the prior fiscal year,  an increase of
$10,760 (17%).  Net income of $4,774 ($.31 per share) for the nine-month  period
ended  December  31, 1995  compares to net income of $1,730 ($.12 per share) for
the nine-month period ended December 31, 1994.

Professional  service  revenues  for the current  fiscal  quarter  increased  to
$17,039 from $15,481 in the comparable  quarter of last fiscal year, an increase
of 10 percent.  For the nine-month period ended December 31, 1995,  professional
service revenues  increased 15 percent to $51,324 from $44,753 in the comparable
period a year ago.  These  increases  are  primarily  attributable  to increased
consulting  rates and current  period  additions  to the number and scope of new
service  contracts  associated with the license  agreements  entered into by the
Company during fiscal 1995 and 1996.

License fees increased by $183 and $2,071 for the quarter and nine-month  period
ended December 31, 1995, respectively,  as compared to the comparable periods of
the prior  fiscal  year.  These  increases  are  attributable  to the  number of
software products delivered in the respective fiscal periods. These products are
sophisticated  software products that typically  require a significant  purchase
commitment by customers,  and therefore,  result in a lengthy and variable sales
cycle.

Maintenance  fees  increased  by $1,086  (26%) and $2,118 (18%) during the three
month and nine-month periods ended December 31, 1995, respectively,  as compared
to the comparable  periods of the prior fiscal year, as the Company continued to
benefit  from  maintenance  agreements  related to license  sales made in fiscal
years 1995 and 1996.

Professional  service  expenses  decreased from $11,732 during the quarter ended
December  31,  1994,  to $10,949  during the quarter  ended  December  31, 1995,
resulting  in an increase  in services  margin  (ratio of  professional  service
revenues  exceeding   professional  service  expenses  to  professional  service
revenues)  from 24% to 36%. For the  nine-month  periods ended December 31, 1994
and 1995 this  expense  decreased  from  $35,877 to $33,380  while the  services
margin  increased  from  20%  to  35%.  The  overall  expense  decreases  result
principally from cost reduction steps  (including  decreased  subcontractor  and
personnel costs) taken by the management team as well as improved utilization of
personnel.

As compared to the comparable periods for the prior fiscal year, development and
product  support  expenses  increased  by $2,583 and $6,216 for the  quarter and
nine-month  period ended December 31, 1995,  respectively.  These  increases are
attributable  to  a  significant  increase  in  software   amortization  expense
resulting from new product  releases  during the latter part of fiscal year 1995
and the shift of activity from  capitalizable  projects to product support.  The
remaining increases are related to ongoing research and development efforts.

                              -7-

<PAGE>


Results of Operations (Continued)
---------------------------------

Selling  and  marketing   expenses   increased  $422  (12%)  and  $1,838  (17%),
respectively,  for the current quarter and the nine-month  period ended December
31, 1995, as compared to the comparable  periods a year ago. This change results
from  increased  compensation  expense  due  to an  increase  in the  number  of
personnel  required to meet the Company's planned  world-wide sales force goals.
The total sales and  marketing  cost as a percentage of revenues has remained at
approximately 17% in each of the corresponding quarters and nine-month periods.

General  and  administrative  expense  increases  of 17 percent  and 12 percent,
respectively, for the quarter and nine-month period ended December 31, 1995 have
resulted  primarily from increases in  compensation  and outside audit and legal
expenses related to the proposed merger with The Continuum Company.

Liquidity and Capital Resources (In thousands)
----------------------------------------------

The Company's  principal  sources of liquidity have  historically  resulted from
cash flow from operations,  the issuance of common stock, existing cash balances
and its line of credit.  During the  nine-month  period ended December 31, 1995,
the Company's cash flow from  operations was negatively  impacted by an increase
in accounts  receivable  of $4,264.  This  increase is  attributable  to several
factors,  including market conditions,  contractual issues and timing of product
deliveries.  The  timing  of  collections  of  accounts  receivable  can also be
impacted  by local  economic  and  political  conditions  which are  outside  of
management's control.

During the second fiscal quarter,  one of the Company's South American customers
was placed under government control. Subsequently, an agreement in principle was
reached with a major  Brazilian  bank to purchase the customer bank and continue
its operations. The Company will continue to monitor the situation.

The Company  believes that its working capital,  capital  equipment and software
development  expenditures  for the foreseeable  future,  including those for the
current product  marketing and development  plans, will be met by cash flow from
operations and available  borrowing  capacity  under its $20,000  revolving bank
line of credit.

Seasonality (In thousands)
--------------------------

Operating  results do not usually  follow a  predictable  seasonal  pattern.  As
discussed   earlier,   the  software   products  and  services   delivered   are
sophisticated  in  nature  and  require a  significant  purchase  commitment  by
customers. Therefore, this process results in a lengthy and variable sales cycle
resulting in quarterly  revenues  and net income  which have  historically  been
variable.

                              - 8 -
<PAGE>




                           PART II. OTHER INFORMATION


Items 1, 2, 3, 4 and 5 are not applicable.

Item 6(a):    Exhibits

              Exhibit 11 -  Calculation  of  weighted  average  number of common
              shares  and  common   share   equivalents   outstanding   for  the
              three-month  and  nine-month  periods ended  December 31, 1995 and
              1994.

Item 6(b):    Reports on Form 8-K

              On December  13,  1995 the Company  filed a report on Form 8-K for
              the  purpose  of  announcing   that  on  December  10,  1995,  the
              Registrant  signed  a  definitive  agreement  to  merge  with  The
              Continuum  Company,  Inc. On December 11, 1995 the Company and The
              Continuum  Company,  Inc. issued a joint press release  describing
              the transaction. The Form 8-K filing incorporated by reference the
              Agreement  and Plan of Merger as Exhibit 2.1 and the press release
              as Exhibit 99.1.


                              - 9 -
<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.

February 7, 1996




                  HOGAN SYSTEMS, INC.
------------------------------------------------------------
                       (Registrant)




                 /s/MICHAEL H. ANDERSON
------------------------------------------------------------
                   Michael H. Anderson
                 Chairman, President and
                 Chief Executive Officer
              (Principal Executive Officer
                      and Director)



                  /s/DAVID R. BANKHEAD
------------------------------------------------------------
                    David R. Bankhead
                Senior Vice President and
                 Chief Financial Officer
              (Principal Financial Officer)



                              - 10 -

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