<PAGE>   1
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                 FORM 10-Q/A


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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996

                                       OR

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

                         Commission file number 0-26934

                           ARBOR SOFTWARE CORPORATION
             (Exact name of registrant as specified in its charter)


             DELAWARE                                          77-0277772
   (State or other jurisdiction of                          (I.R.S. Employer
   incorporation or organization)                        Identification Number)


                            1325 CHESAPEAKE TERRACE
                          SUNNYVALE, CALIFORNIA 94089
                    (Address of principal executive offices)


                                 (408) 727-5800
              (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 October 31, 1996 there were 11,026,874 shares of the Registrant's
common stock outstanding.
<PAGE>   2
                           ARBOR SOFTWARE CORPORATION

                                    FORM 10-Q

                                      INDEX


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

          Condensed Consolidated Balance Sheets

          At September 30, 1996 and March 31, 1996...................................................        3

          Condensed Consolidated Statements of Operations

          For the three months and six months ended September 30, 1996 and 1995......................        4

          Condensed Consolidated Statements of Cash Flows

          For the six months ended September 30, 1996 and 1995.......................................        5

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

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

          Operations.................................................................................        7


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings..........................................................................       17

Item 6.   Exhibits and Reports on Form 8-K...........................................................       18

SIGNATURES...........................................................................................       19
</TABLE>




                                       2
<PAGE>   3
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                           ARBOR SOFTWARE CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                SEPTEMBER 30,    MARCH 31,
                                                                                    1996           1996
                                                                                    ----           ----
                                                                                 (UNAUDITED)
<S>                                                                                <C>           <C>     
                                 ASSETS

Current assets:
    Cash and cash equivalents ..............................................       $ 7,793       $ 10,698
    Short-term investments .................................................        28,825         25,965
    Accounts receivable, net of allowances of $564 and $388 ................         7,307          4,505
    Deferred tax assets ....................................................           900            900
    Prepaid expenses and other current assets ..............................           846            485
                                                                                   -------       --------
       Total current assets ................................................        45,671         42,553

Property and equipment, net ................................................         4,351          2,923
Other assets ...............................................................           603            407
                                                                                   -------       --------
                                                                                   $50,625       $ 45,883
                                                                                   =======       ========

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable .......................................................       $ 1,470       $  1,109
    Accrued expenses and other current liabilities .........................         6,062          4,883
    Deferred revenue .......................................................         4,157          3,781
    Current portion of lease obligations ...................................           779            711
                                                                                   -------       --------
       Total current liabilities ...........................................        12,468         10,484

Lease obligations, long-term ...............................................           656          1,093

Stockholders' equity:
    Common stock, $0.001 par value; 50,000,000 and 25,000,000 shares
       authorized;  10,978,000 and 10,859,000 shares issued and outstanding             11             11
    Additional paid-in capital .............................................        37,387         36,813
    Retained earnings (accumulated deficit) ................................            92         (2,519)
    Cumulative translation adjustment ......................................            11              1
                                                                                   -------       --------
       Total stockholders' equity ..........................................        37,501         34,306
                                                                                   -------       --------
                                                                                   $50,625       $ 45,883
                                                                                   =======       ========
</TABLE>




     See accompanying notes to Condensed Consolidated Financial Statements.




                                       3
<PAGE>   4
                           ARBOR SOFTWARE CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (IN THOUSANDS, EXCEPT PER SHARE DATA; UNAUDITED)




<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED              SIX MONTHS ENDED
                                                        SEPTEMBER 30,                 SEPTEMBER 30,
                                                        -------------                 -------------
                                                    1996           1995            1996            1995  
                                                  --------        -------        --------        --------
<S>                                               <C>             <C>            <C>             <C>     
Revenues:
   License ................................       $  8,942        $ 4,673        $ 16,684        $  8,910
   Maintenance, support and other .........          1,853            709           3,381           1,238
                                                  --------        -------        --------        --------
      Total revenues ......................         10,795          5,382          20,065          10,148
                                                  --------        -------        --------        --------

Cost of revenues:
   License ................................            251            113             423             208
   Maintenance, support and other .........            849            189           1,564             384
                                                  --------        -------        --------        --------
      Total cost of revenues ..............          1,100            302           1,987             592
                                                  --------        -------        --------        --------

Gross profit ..............................          9,695          5,080          18,078           9,556
                                                  --------        -------        --------        --------

Operating expenses:
   Sales and marketing ....................          5,126          3,120           9,824           5,788
   Research and development ...............          1,632            859           2,953           1,633
   General and administrative .............          1,101            595           2,004           1,220
                                                  --------        -------        --------        --------
      Total operating expenses ............          7,859          4,574          14,781           8,641
                                                  --------        -------        --------        --------

Income from operations ....................          1,836            506           3,297             915

Interest and other income .................            409             34             858              54
Interest expense ..........................            (65)           (77)           (138)           (140)
                                                  --------        -------        --------        --------

Income before income taxes ................          2,180            463           4,017             829
Provision for income taxes ................           (763)          (110)         (1,406)           (166)
                                                  --------        -------        --------        --------

Net income ................................       $  1,417        $   353        $  2,611        $    663
                                                  ========        =======        ========        ========

Net income per share ......................       $    .12        $   .04        $    .22        $    .07
                                                  ========        =======        ========        ========

Shares used to compute net income per share         11,715          9,721          11,709           9,720
                                                  ========        =======        ========        ========
</TABLE>




     See accompanying notes to Condensed Consolidated Financial Statements.




                                       4
<PAGE>   5
                           ARBOR SOFTWARE CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (IN THOUSANDS; UNAUDITED)

<TABLE>
<CAPTION>
                                                                                SIX MONTHS ENDED
                                                                                  SEPTEMBER 30,
                                                                                  -------------
                                                                              1996           1995
                                                                            --------        -------
<S>                                                                         <C>             <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income .....................................................       $  2,611        $   663
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation, amortization and other .......................            879            421
         Provision for doubtful accounts ............................             59             49
         Changes in assets and liabilities:
              Accounts receivable ...................................         (2,861)          (283)
              Prepaid expenses and other current assets .............           (361)          (367)
              Other assets ..........................................           (196)           (14)
              Accounts payable ......................................            361            (16)
              Accrued expenses and other current liabilities ........          1,179            939
              Deferred revenue ......................................            376          1,162
                                                                            --------        -------
                  Net cash provided by operating activities .........          2,047          2,554
                                                                            --------        -------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of short-term investments, net .......................         (2,860)            --
     Acquisition of property and equipment ..........................         (2,279)          (239)
                                                                            --------        -------
                  Net cash used in investing activities .............         (5,139)          (239)
                                                                            --------        -------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock, net ....................            546            171
     Proceeds from issuance of preferred stock, net .................             --            100
     Repayment of capital lease obligations .........................           (369)          (336)
                                                                            --------        -------
                  Net cash provided by (used in) financing activities            177            (65)
                                                                            --------        -------

Effect of exchange rate changes on cash and cash equivalents ........             10             (5)
                                                                            --------        -------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ................         (2,905)         2,245
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................         10,698          2,739
                                                                            --------        -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..........................       $  7,793        $ 4,984
                                                                            ========        =======

SUPPLEMENTAL DISCLOSURES:
     Cash paid for interest .........................................       $    138        $   140
     Cash paid for income taxes .....................................             --            221
NON-CASH INVESTING AND FINANCING ACTIVITIES:
     Acquisition of property and equipment through capital leases ...             --            933
</TABLE>




     See accompanying notes to Condensed Consolidated Financial Statements.




                                       5
<PAGE>   6
                           ARBOR SOFTWARE CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       Basis of Presentation

         The unaudited condensed consolidated financial statements included
herein reflect all adjustments, consisting only of normal recurring adjustments,
which in the opinion of management are necessary to fairly state the Company's
consolidated financial position, results of operations and cash flows for the
periods presented. These financial statements should be read in conjunction with
the Company's audited consolidated financial statements as included in the
Company's fiscal year 1996 Annual Report on Form 10-K. The consolidated results
of operations for the period ended September 30, 1996 are not necessarily
indicative of the results to be expected for any subsequent quarter or for the
entire fiscal year ending March 31, 1997. The March 31, 1996 balance sheet was
derived from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles.

2.       Net Income Per Share

         Net income per share is computed using the weighted average number of
common and common equivalent shares outstanding during the period. Common
equivalent shares consist of convertible preferred stock (using the if converted
method) and stock options and warrants (using the treasury method). Common
equivalent shares are excluded from the computation if their effect is
antidilutive, except that, pursuant to the Securities and Exchange Commission
Staff Accounting Bulletin, convertible preferred stock (using the if converted
method) and common equivalent shares (using the treasury method and the initial
public offering price) issued subsequent to March 31, 1994 through November 6,
1995, have been included in the computation as if they were outstanding through
the effective date of the Company's initial public offering.

3.       Accrued Expenses and Other Current Liabilities

         Accrued expenses and other current liabilities consist of the following
(in thousands):

<TABLE>
<CAPTION>
                                                  SEPTEMBER 30,          MARCH 31,
                                                       1996                1996
                                                       ----                ----
                                                   (UNAUDITED)
<S>                                                   <C>                 <C>   
Accrued commissions ....................              $1,141              $  907
Accrued income taxes ...................               1,140                 991
Accrued benefits .......................               1,026                 758
Accrued other ..........................               2,755               2,227
                                                      ------              ------
                                                      $6,062              $4,883
                                                      ======              ======
</TABLE>




                                       6
<PAGE>   7
ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS

         The discussion in this Report on Form 10-Q contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ materially from those discussed herein. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in "Risk Factors That May Affect Future Results" as well as those discussed in
this section and elsewhere in this Report, and the risks discussed in the "Risk
Factors That May Affect Future Results" section included in the Company's fiscal
year 1996 Annual Report on Form 10-K.

RESULTS OF OPERATIONS

         The following table sets forth certain items in the Company's condensed
consolidated statements of operations as a percentage of total revenues for the
periods indicated:

<TABLE>
<CAPTION>
                                            THREE MONTHS                 SIX MONTHS
                                         ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                         -------------------         -------------------
                                         1996          1995          1996          1995
                                         ----          ----          ----          ----
<S>                                     <C>           <C>           <C>           <C>  
Revenues:
  License .......................        82.8%         86.8%         83.1%         87.8%
  Maintenance, support and other         17.2          13.2          16.9          12.2
                                        -----         -----         -----         -----
     Total revenues .............       100.0         100.0         100.0         100.0
                                        -----         -----         -----         -----
Cost of revenues:
  License .......................         2.3           2.1           2.1           2.0
  Maintenance, support and other          7.9           3.5           7.8           3.8
                                        -----         -----         -----         -----
     Total cost of revenues .....        10.2           5.6           9.9           5.8
                                        -----         -----         -----         -----
Gross profit ....................        89.8          94.4          90.1          94.2
                                        -----         -----         -----         -----
Operating expenses:
  Sales and marketing ...........        47.5          58.0          49.0          57.1
  Research and development ......        15.1          16.0          14.7          16.1
  General and administrative ....        10.2          11.0          10.0          12.0
                                        -----         -----         -----         -----
     Total operating expenses ...        72.8          85.0          73.7          85.2
                                        -----         -----         -----         -----
Income from operations ..........        17.0           9.4          16.4           9.0
Interest and other income .......         3.8           0.6           4.3           0.6
Interest expense ................        (0.6)         (1.4)         (0.7)         (1.4)
                                        -----         -----         -----         -----
Income before income taxes ......        20.2           8.6          20.0           8.2
Provision for income taxes ......        (7.1)         (2.0)         (7.0)         (1.7)
                                        -----         -----         -----         -----
Net income ......................        13.1%          6.6%         13.0%          6.5%
                                        =====         =====         =====         =====
</TABLE>

REVENUES

         The Company's total revenues are derived from license revenues for its
Essbase software as well as software maintenance and support, training and
consulting revenues from Essbase licensees. Revenues for maintenance and support
services, training and consulting are charged separately from the license of
Essbase software. License revenues are recognized upon shipment of the product
if no significant vendor obligations remain and collection of the resulting
receivable is probable. In instances where a significant vendor obligation
exists, revenue recognition is delayed until such obligation has been satisfied.
Allowances for estimated future returns, which to date have been immaterial, are
provided for upon shipment. Maintenance and support revenues, including the
element of licensing fees attributable to the initial warranty period, consist
of ongoing support and product updates and are recognized ratably over the term
of the contract, which is typically twelve months. Revenues from training and
consulting are recognized when the services are performed.

                                       7
<PAGE>   8
         Revenues are gross revenues less allowances for estimated future
returns, which are estimated and provided for at the time of shipment of the
product. The Company's total revenues for the three months ended September 30,
1996 increased 101% to $10.8 million from $5.4 million for the three months
ended September 30, 1995, and for the six months ended September 30, 1996
increased 98% to $20.1 million from $10.1 million for the six months ended
September 30, 1995. License revenues for the three months ended September 30,
1996 increased 91% to $8.9 million from $4.7 million for the three months ended
September 30, 1995, and for the six months ended September 30, 1996 increased
87% to $16.7 million from $8.9 million for the six months ended September 30,
1995. The increase is attributable to an increase in the number of licenses sold
and average transaction size, reflecting increased acceptance of Essbase and
expansion of the Company's direct sales organization. Direct and indirect sales
for the three months ended September 30, 1996 increased by 102% and 72%,
respectively, when compared to the three months ended September 30, 1995, and
increased by 91% and 79%, respectively, when compared to the six months ended
September 30, 1995. Maintenance, support and other revenues for the three months
ended September 30, 1996 increased 161% to $1.9 million from $709,000 for the
three months ended September 30, 1995, and for the six months ended September
30, 1996 increased 173% to $3.4 million from $1.2 million for the six months
ended September 30, 1995. The increase is attributable to a larger installed
base requiring incremental maintenance and support. The percentage of the
Company's total revenues attributable to software licenses decreased to 83% for
the three months ended September 30, 1996 from 87% for the three months ended
September 30, 1995, and for the six months ended September 30, 1996 decreased to
83% from 88% for the six months ended September 30, 1995. The percentage
decrease is due to an increase in the Company's installed base, which resulted
in an increase in maintenance, support and other revenues.

        Sales derived through indirect channel partners accounted for
approximately 25%, 30%, 26% and 29% of the Company's total revenues for the
three months ended September 30, 1996 and 1995, and the six months ended
September 30, 1996 and 1995, respectively. In the three months ended September
30, 1996 and 1995, and the six months ended September 30, 1996 and 1995,
revenues attributable to Comshare, Incorporated ("Comshare"), the Company's
largest reseller, accounted for 24%, 30%, 25% and 29%, respectively, of the
Company's total revenues. License revenues from Comshare for the quarters ended
June 30, 1996, March 31, 1996, December 31, 1995 and September 30, 1995,
totaled approximately $2.5 million, $2.4 million, $2.1 million and $1.7
million, respectively, and were recorded by the Company during the quarters
ended September 30, 1996, June 30, 1996, March 31, 1996 and December 31, 1995,
respectively. Comshare does not report to the Company the revenues generated by
its sales of the Company's Essbase software for a particular quarter until 45
days after quarter-end; accordingly, the Company records such revenues in that
subsequent quarter. No assurance can be given in any event that revenues
derived from Comshare will not fluctuate significantly in subsequent periods or
terminate entirely. In addition, the Company has initiated litigation against
Comshare and has alleged breach of contract and fraud in connection with its
distribution contract. See "Legal Proceedings" in Item 1, Part II below. The
inability of the Company to prevail in this litigation could have a material
adverse effect on the Company's business, financial condition and operating
results. Even if the outcome of the litigation were favorable to the Company it
could result in substantial costs to the Company and consequently, an adverse
effect on the Company's revenues. See "Risk Factors That May Affect Future
Results," in particular, "Fluctuations in Quarterly Results; Future Operating
Results Uncertain" and "Dependence Upon Comshare and Other Indirect Channel
Partners."

         International revenues from the Company's direct sales force accounted
for 11%, 3%, 10% and 6% of total revenues for the three months ended September
30, 1996 and 1995, and the six months ended September 30, 1996 and 1995,
respectively. International license and service revenues increased to $1.1
million for the three months ended September 30, 1996 from $155,000 for the
three months ended September 30, 1995, and increased to $2.0 million for the six
months ended September 30, 1996 from $607,000 for the six months ended September
30, 1995, primarily due to expansion of the international direct sales force.
The Company records revenues from Comshare and other United States-based
indirect channel partners as domestic revenues, although such partners sell the
Company's products both domestically and internationally. Based on reports
received from Comshare, the Company believes approximately 71%, 42%, 63% and 47%
of revenues generated by Comshare during the three months ended September 30,
1996 and 1995 and the six months ended September 30, 1996 and 1995,
respectively, were derived from sales to international customers. 

                                       8
<PAGE>   9

COST OF REVENUES

         Cost of License Revenues. Cost of license revenues consists primarily
of product packaging, documentation and production costs. Cost of license
revenues for the three months ended September 30, 1996 increased as a percentage
of license revenues to 3% from 2% for the three months ended September 30, 1995,
and increased to 3% for the six months ended September 1996 from 2% for the six
months ended September 30, 1995, primarily as a result of the continued
shipments of the upgrade release of Essbase versions 4.0 and 4.0.2.

         Cost of Maintenance, Support and Other. Cost of maintenance, support
and other revenues consists primarily of customer support costs and direct costs
associated with providing other services such as consulting and training.
Customer support includes telephone question and answer services, newsletters,
on-site visits and other support. Cost of maintenance, support and other
revenues increased as a percentage of maintenance, support and other revenues to
46% for the three months ended September 30, 1996 from 27% for the three months
ended September 30, 1995, and increased to 46% for the six months ended
September 30, 1996 from 31% for the six months ended September 30, 1995. The
increase is primarily due to a shifting of operating expenses to cost of
services as a result of the establishment of the Customer Advocacy Group during
the first quarter of fiscal year 1997. This new organization is comprised of the
Technical Support, Field Services and Customer Services departments. The
Customer Advocacy Group's mission is to coordinate services for Arbor's
customers.


OPERATING EXPENSES

        Sales and Marketing. Sales and marketing expenses consist primarily of
personnel costs, including sales commissions of all personnel involved in the
sales process, as well as costs of advertising, public relations, seminars and
trade shows. Sales and marketing expenses increased to $5.1 million for the
three months ended September 30, 1996 from $3.1 million for the three months
ended September 30, 1995, and increased to $9.8 million for the six months
ended September 30, 1996 from $5.8 million for the six months ended September
30, 1995, representing 48%, 58%, 49% and 57% of total revenues for the three
months ended September 30, 1996 and 1995, and the six months ended September
30, 1996 and 1995, respectively. The increase in dollar amount was primarily
due to costs associated with the expansion of the direct sales force in the
U.S. and Europe, including new offices in France and Germany, and increased
hiring in the U.S. and the U.K. Other factors included personnel increases in
the marketing group, and increased costs associated with advertising, public
relations, seminars and trade shows. The decrease as a percentage of total
revenues was due primarily to growth in the Company's total revenues and
associated economies of scale, which do not have associated sales and marketing
costs. Additionally, in fiscal 1996 the Company incurred significant sales and
marketing expenses to help establish the OLAP market and to build
infrastructure. The Company expects to continue hiring additional sales and
marketing personnel and to increase promotion and advertising expenditures
for the remainder of fiscal 1997.

         Research and Development. Research and development expenses consist
primarily of salaries and other personnel-related expenses and outside
contractor expenses. Research and development expenses increased to $1.6 million
for the three months ended September 30, 1996 from $859,000 for the three months
ended September 30, 1995, and increased to $3.0 million for the six months ended
September 30, 1996 from $1.6 million for the six months ended September 30,
1995, representing 15%, 16%, 15% and 16% of total revenues for the three months
ended September 30, 1996 and 1995, and the six months ended September 30, 1996
and 1995, respectively . The increase in dollar amount was primarily due to an
increase in the number of software engineers, an increase in consulting fees
relating to applications and joint development projects and associated support
required to develop Essbase enhancements and the overall growth of the Company.
The decrease as a percentage of total revenues was

                                       9
<PAGE>   10
primarily due to growth in the Company's total revenues. The Company believes
that a significant level of investment for product research and development is
required to remain competitive. Accordingly, the Company anticipates that it
will continue to devote substantial resources to product research and
development and that research and development expenses will increase in absolute
dollars for the remainder of fiscal 1997. To date, all research and development
costs have been expensed as incurred.

        General and Administrative. General and administrative expenses consist
primarily of personnel costs for finance, MIS, human resources and general
management, as well as insurance and professional expenses. General and
administrative expenses increased to $1.1 million for the three months ended
September 30, 1996 from $595,000 for the three months ended September 30, 1995,
and increased to $2.0 million for the six months ended September 30, 1996 from
$1.2 million for the six months ended September 30, 1995, representing 10%,
11%, 10% and 12% of total revenues for the three months ended September 30,
1996 and 1995, and the six months ended September 30, 1996 and 1995,
respectively. The increase in dollar amount was primarily due to increased
staffing and professional fees necessary to manage and support the Company's
recent growth and to provide the infrastructure required for a public company.
The decrease as a percentage of total revenues was primarily due to growth in
the Company's total revenues. The Company believes that its general and
administrative expenses will increase in absolute dollar amounts for the
remainder of fiscal 1997 as the Company expands its administrative staff, adds
infrastructure, incurs additional legal costs related to pending litigation
with Comshare and Planning Sciences International plc and Planning Sciences,
Inc. (collectively "Planning Sciences")

INTEREST AND OTHER INCOME; INTEREST EXPENSE

         Interest and other income represents interest income earned on the
Company's cash, cash equivalents and short-term investments, and other items
including foreign exchange gains and losses. Foreign exchange gains and losses
were not significant during any of the periods presented. Interest and other
income increased to $409,000 for the three months ended September 30, 1996 from
$34,000 for the three months ended September 30, 1995, and increased to $858,000
for the six months ended September 30, 1996 from $54,000 for the six months
ended September 30, 1995, primarily due to higher cash balances resulting from
the infusion of cash from the initial public offering. Interest expense
represents foreign exchange losses which have been immaterial to date, and
interest expense on capital leases. Interest expense decreased to $65,000 for
the three months ended September 30, 1996 from $77,000 for the three months
ended September 30, 1995, and decreased to $138,000 for the six months ended
September 30, 1996 from $140,000 for the six months ended September 30, 1995.
The decrease is due to a decline in the outstanding balance of capital lease
obligations.


PROVISION FOR INCOME TAXES

         The provision for income taxes increased to $763,000 for the three
months ended September 30, 1996 from $110,000 for the three months ended
September 30, 1995, and increased to $1.4 million for the six months ended
September 30, 1996 from $166,000 for the six months ended September 30, 1995.
The Company's effective tax rate was 20% for fiscal 1996 due to the utilization
of prior years net operating loss carryovers. The Company exhausted all of these
net operating loss carryovers in fiscal 1996 and as a result estimates its
effective tax rate for fiscal 1997 to be approximately 35%.


 LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 1996, the Company had $36.6 million in cash, cash
equivalents and short-term investments. Net cash provided by operating
activities was $2.0 million for the six months ended September 30,

                                       10
<PAGE>   11
1996, and was primarily attributable to net income of $2.6 million and an
increase in accrued expenses and other current liabilities of $1.2 million,
offset by an increase in accounts receivable of $2.8 million.

         The Company's current line of credit, which is unsecured, allows for
borrowings of up to $5.0 million at the bank's prime rate and expires in October
1997. As of September 30, 1996, the Company had no outstanding borrowings under
its credit facility.

         As of September 30, 1996, the Company's principal commitments consisted
of obligations under operating and capital leases. As of September 30, 1996, the
Company had $1.4 million in outstanding borrowings under capital leases which
are payable through 1998.

        The Company expects to significantly increase its capital expenditures
by approximately $5.0 million during it's third fiscal quarter on capital
improvements relating to the Company's new corporate headquarters, which the
Company will occupy in December of 1996. Following the move into the new
facility, the Company expects increases in operating expenses going forward due
to increased depreciation charges and facility costs relating to the new        
corporate headquarters.

         The Company believes its current cash balances and the cash flows
generated from operations, if any, will be sufficient to meet its anticipated
cash needs for working capital and capital expenditures for at least the next 12
months.


RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

         The Company operates in a rapidly changing environment that involves a
number of risks, some of which are beyond the Company's control. The following
discussion highlights some of these risks. These risks should be read in
conjunction with the "Risk Factors That May Affect Future Results" section
included in the Company's fiscal year 1996 Annual Report on Form 10-K.

         Fluctuations in Quarterly Results; Future Operating Results Uncertain.
The Company's quarterly operating results have in the past varied significantly
and will likely in the future vary significantly depending on factors such as:
demand for the Company's Essbase software; the stability of it's distributors,
particularly Comshare; the level of price and product competition; changes in
pricing policies by the Company or its competitors; changes in the mix of
indirect channels through which Essbase is offered; the number, timing and
significance of product enhancements and new product announcements by the
Company and its competitors; the ability of the Company to develop, introduce
and market new and enhanced versions of Essbase on a timely basis; the size,
timing and structure of significant licenses; changes in the Company's sales
incentive strategy; the timing of revenue recognition under the Company's
agreements; the impact of acquisitions of competitors and indirect channel
partners; the level of the Company's international revenues; foreign currency
exchange rates; the renewal of maintenance and support agreements; product life
cycles; software defects and other product quality problems; personnel changes;
changes in Company strategy; changes in the level of operating expenses and
general domestic and international economic and political conditions, among
others. In addition, the operating results of many software companies reflect
seasonal trends, and the Company's business, operating results and financial
condition may experience comparatively slower growth in the first fiscal
quarter and summer months which overlap into the second fiscal quarter. Essbase
orders are typically shipped shortly after receipt, and, consequently order
backlog at the beginning of any quarter has in the past represented only a
small portion of that quarter's expected revenues. As a result, license
revenues in any quarter are substantially dependent on orders booked and
shipped in that quarter. In addition, a significant portion of each quarter's
revenues are derived from sales of the Company's Essbase software in the prior
quarter by Comshare. Revenues from Comshare accounted for 24% and 30% of the
Company's total revenues for the three months ended September 30, 1996 and
1995, respectively. Comshare does not report to the Company the revenues
generated by its sales of the Company's Essbase software for a  particular      
quarter until 45 days after quarter-end;

                                       11
<PAGE>   12
accordingly, the Company records such revenues in that subsequent quarter. In
addition, no assurance can be given in any event that revenues derived from
Comshare will not fluctuate significantly in subsequent periods or terminate
entirely. The Company has initiated litigation against Comshare and has alleged
breach of contract and fraud connection with its distribution contract. See
"Legal  Proceedings" in Item 1, Part II below.  See "Risk Factors That May
Affect Future Results," in particular, "Fluctuations in Quarterly Results;
Future Operating Results Uncertain" and "Dependence Upon Comshare and   Other
Indirect Channel Partners."


         Due to all of the foregoing, revenues for any future quarter are not
predictable with any significant degree of accuracy. Quarterly revenues are also
difficult to forecast because the Company's sales cycle, from initial evaluation
to license and maintenance and support purchases, varies substantially from
customer to customer. Accordingly, the Company believes that period-to-period
comparisons of its operating results are not necessarily meaningful and should
not be relied upon as indications of future performance. Although the Company
has recently experienced significant revenue growth, the Company does not
believe that such growth rates are sustainable. Accordingly, the rate at which
the Company has grown in the past should not be considered indicative of future
revenue growth, if any, or of future operating results.

         The Company's expense levels are based in significant part on the
Company's expectations of future revenues and therefore are relatively fixed in
the short run. If revenue levels are below expectations, net income is likely to
be disproportionately affected. There can be no assurance that the Company will
be able to achieve or maintain profitability on a quarterly or annual basis in
the future. In addition, it is possible that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors. In such event, or in the event that adverse conditions
prevail or are perceived to prevail generally or with respect to the Company's
business, the price of the Company's common stock would likely be materially
adversely affected.

         Dependence Upon Comshare and Other Indirect Channel Partners. In
addition to its direct sales force, the Company relies on indirect channel
partners such as original equipment manufacturers ("OEMs") and value added
resellers ("VARs") for licensing and support of its products in the United
States and internationally. The Company's indirect channel partners generally
offer products of several different companies, including, in some cases,
products that compete with Essbase. There can be no assurance that the Company's
current indirect channel partners will elect, or be able, to market or support
Essbase effectively, that the Company will be able to effectively manage channel
conflicts, that economic conditions or industry demand will not adversely affect
these or other indirect channel partners or that these indirect channel partners
will not devote greater resources to marketing and supporting the products of
other companies. The Company's largest reseller is Comshare, a leading provider
of executive information systems that currently markets a family of products
that are based upon, or can be used with, Essbase. Essbase distributed by
Comshare is supported by them and their agents and indirect channel partners
around the world. Under the Company's agreement with Comshare, Comshare is
granted a license to use, copy, distribute and sublicense Essbase worldwide. The
Company is paid a percentage of license fees generated by Comshare with minimum
commitments owed to the Company in order to maintain the scope of Comshare's
distribution rights. The agreement provides for standard confidentiality and
non-disclosure obligations and commits standard warranty and indemnification
rights to Comshare. Sales attributable to Comshare accounted for 24% and 30% of
the total revenue for the three months ended September 30, 1996 and 1995,
respectively. The Comshare License Agreement provides that, in the event that
certain competitors of Comshare were to acquire at least a twenty percent equity
interest in the Company, substantially all of the Company's assets or
substantially all of the intellectual property rights to the Company's Essbase
software, the license revenues payable by Comshare to the Company under the
agreement would be reduced by fifty percent, and Comshare could elect to
terminate the Comshare License Agreement. Accordingly, the possibility of
termination of the Comshare License Agreement or a fifty percent reduction in
license revenues from Comshare could discourage potential acquisition proposals
and could delay or prevent a change in control of the Company. In addition, the
Comshare License Agreement contains an exclusivity provision prohibiting the
Company from licensing its products to certain of Comshare's competitors, and
the elimination of any potential customers limits the Company's potential market
share to some degree. The Company has initiated litigation with Comshare
alleging that Comshare has breached its obligations under its distribution
agreement with the Company by underpaying royalties and that Comshare
fraudulently induced the Company into entering into the agreement. The action
seeks monetary and injunctive relief preventing Comshare from future
distribution of Essbase. Subsequently, Comshare filed its answer as well as
counterclaims against the Company alleging interference with prospective
economic advantage, unfair competition, defamation and disparagement, and
breach of contract. No assurance can be given that revenues derived from
Comshare will not fluctuate significantly in subsequent periods or terminate
entirely. The inability of the Company to prevail in the litigation with
Comshare could have a material adverse effect on the Company's business,
financial condition and operating results. Even if the outcome of the
litigation were favorable to the Company, it could result in substantial costs
to the Company and consequently, have an adverse effect on the Company's
revenues. In addition, given recent announcements by Comshare regarding their
quarterly earnings releases, there can be no assurance that the Company can
expect to receive timely sales reports or be able to rely on the sales reports
of Essbase by Comshare. See "Legal Proceedings" in Item 1, Part II below.


                                       12
<PAGE>   13
          Competition. The market in which the Company competes is intensely
competitive, highly fragmented and characterized by rapidly changing technology
and evolving standards. The Company's current and prospective competitors offer
a variety of planning and analysis software solutions and generally fall within
three categories: (i) vendors of multidimensional database and analysis
software such as Oracle (Express), Dun & Bradstreet (Pilot Lightship Server),
Planning Sciences (Gentia), Kenan (Acumate) and Microsoft through its recent
acquisition of OLAP technology from Panorama Software of Tel Aviv, Israel; (ii)
vendors of dedicated software applications for budgeting and financial
consolidation such as Hyperion Software Corporation (Hyperion and FYPlan); and
(iii) vendors of OLAP/relational database software (ROLAP) such as Information
Advantage (Decision Suite), Informix (Stanford Technology Group), Holistic
Systems (Holos) and Microstrategy (DSS Agent). The Company does not believe
that the Panorama technology, as acquired by Microsoft, is currently
competitive with the Company's Essbase product. However, there are no assurances
that Microsoft will not enhance such technology in order to market a
competitive product in the future. 

          The Company has experienced and expects to continue to experience
increased competition from current and potential competitors, many of whom have
significantly greater financial, technical, marketing and other resources than
the Company. Such competitors may be able to respond more quickly to new or
emerging technologies and changes in customer requirements or devote greater
resources to the development, promotion and sale of their products than the
Company. Also, certain current and potential competitors may have greater name
recognition or more extensive customer bases that could be leveraged, thereby
gaining market share to the Company's detriment. Arbor expects additional
competition as other established and emerging companies enter into the OLAP
software market and new products and technologies are introduced. Increased
competition could result in price reductions, fewer customer orders, reduced
gross margins and loss of market share, any of which would materially adversely
affect the Company's business, operating results and financial condition.

          Current and potential competitors may make strategic acquisitions or
establish cooperative relationships among themselves or with third parties,
thereby increasing the ability of their products to address the needs of the
Company's prospective customers. The Company's current or future indirect
channel partners may establish cooperative relationships with current or
potential competitors of the Company, thereby limiting the Company's ability to
sell its products through particular distribution channels. Accordingly, it is
possible that new competitors or alliances among current and new competitors may
emerge and rapidly gain significant market share. Such competition could
materially adversely affect the Company's ability to obtain new contracts and
maintenance and support renewals for existing contracts on terms favorable to
the Company. Further, competitive pressures, such as those resulting from
competitors discounting of their products, may require the Company to reduce the
price of Essbase, which would materially adversely affect the Company's
business, operating results and financial condition. There can be no assurance
that the Company will be able to compete successfully against current and future
competitors, and the failure to do so would have a material adverse effect upon
the Company's business, operating results and financial condition.

          Product Concentration; Dependence upon the Emerging Market for
Multidimensional Database Software for On-Line Analytical Processing. All of the
Company's revenues to date have been derived from licenses for Essbase and
related services. The Company currently expects that Essbase-related revenues,
including maintenance and support contracts, will continue to account for all or
substantially all of the Company's revenues for the foreseeable future. As a
result, the Company's future operating results are dependent upon continued
market acceptance of Essbase and enhancements thereto. There can be no assurance
that Essbase will achieve continued market acceptance or that the Company will
be successful in marketing Essbase or enhancements thereto. A decline in demand
for, or market acceptance of, Essbase as a result of competition, technological
change or other factors would have a material adverse effect on the Company's
business, operating results and financial condition. The Company intends to
continue to invest its efforts to improve and enhance Essbase by maintaining its
commitment to an open architecture, extending its partnerships, integrating
third party technologies, continuing to evolve the Essbase multidimensional
database server, and developing new application development products and
middleware tools.



                                       13
<PAGE>   14
         Although demand for Essbase has grown in recent years, the market for
multidimensional database software for on-line analytical processing is still
emerging and there can be no assurance that it will continue to grow or that,
even if the market does grow, businesses will adopt Essbase. The Company has
spent, and intends to continue to spend, considerable resources educating
potential customers about Essbase and its functions and on-line analytical
processing generally. However, there can be no assurance that such expenditures
will enable Essbase to achieve any additional degree of market acceptance, and
if the market for Essbase fails to grow or grows more slowly than the Company
currently anticipates, the Company's business, operating results and financial
condition would be materially adversely affected. Historically, the software
industry has experienced significant periodic downturns, often in connection
with, or in anticipation of, declines in general economic conditions during
which MIS budgets often decrease. As a result, the Company's business, operating
results and financial condition may in the future reflect substantial
fluctuations from period to period as a consequence of patterns and general
economic conditions in the software industry.

         Potential Volatility of Stock Price. The market price of the Company's
Common Stock is highly volatile and may be significantly affected by factors
such as actual or anticipated fluctuations in the Company's operating results,
announcements of technological innovations, new products or new contracts by the
Company or its competitors, developments with respect to patents, copyrights or
proprietary rights, conditions and trends in the software and other technology
industries, adoption of new accounting standards affecting the software
industry, general market conditions and other factors. Also a factor are
announcements of accounting irregularities by Comshare, the Company's largest
indirect channel partner, reports regarding the Comshare litigation and reports
regarding the stability of Comshare. In addition, the stock market has from time
to time experienced significant price and volume fluctuations that have
particularly affected the market prices for the common stocks of technology
companies. These broad market fluctuations may adversely affect the market price
of the Company's Common Stock. In the past, following periods of volatility in
the market price of a particular company's securities, securities class action
litigation has often been brought against that company. There can be no
assurance that such litigation will not occur in the future with respect to the
Company. Such litigation could result in substantial costs and a diversion of
management's attention and resources, which could have a material adverse effect
upon the Company's business, operating results and financial condition.

         Risks Associated with International Operations. International revenues
from the Company's direct sales force accounted for 11%, 3%, 10% and 6% of total
revenues for the three months ended September 30, 1996 and 1995, and the six
months ended September 30, 1996 and 1995, respectively. The Company's largest
indirect channel partner, Comshare, accounts for a significant majority of the
Company's sales by indirect channel partners. Based on reports received from
Comshare, the Company believes approximately 71%, 42%, 63% and 47% of revenues
generated by Comshare during the three months ended September 30, 1996 and 1995,
and the six months ended September 30, 1996 and 1995, respectively, were derived
from sales to international customers. The Company believes that in order to
increase sales opportunities and profitability it will be required to expand its
international operations. The Company recently opened offices in Paris, France,
Hamburg, Germany and Sydney Australia. The Company intends to continue to expand
its direct and indirect sales and marketing activities worldwide, which will
require significant management attention and financial resources. The Company
has committed and continues to commit significant time and financial resources
to developing international sales and support channels. There can be no
assurance, however, that the Company will be able to maintain or increase
international market demand for Essbase. To the extent that the Company is
unable to do so in a timely manner, the Company's international sales will be
limited, and the Company's business, operating results and financial condition
would be materially adversely affected.

         International sales are subject to inherent risks, including the impact
of possible recessionary environments in economies outside the United States,
costs of localizing products for foreign countries, longer receivables
collection periods and greater difficulty in accounts receivable collection,
unexpected changes in regulatory requirements, difficulties and costs of
staffing and managing foreign operations, reduced protection for intellectual

                                       14
<PAGE>   15
property rights in some countries, potentially adverse tax consequences and
political and economic instability. There can be no assurance that the Company
or its indirect channel partners will be able to sustain or increase
international revenues from international licenses and maintenance, support and
other contracts, or that the foregoing factors will not have a material adverse
effect on the Company's future international revenues and, consequently, on the
Company's business, operating results and financial condition. The Company's
direct international sales are currently denominated in either United States
dollars or British pounds sterling, and the Company does not currently engage in
hedging activities. Although exposure to currency fluctuations to date has been
insignificant, there can be no assurance that fluctuations in currency exchange
rates in the future will not have a material adverse impact on revenues from
direct international sales and thus the Company's business, operating results
and financial condition. Sales generated by the Company's indirect channel
partners, including Comshare, currently are paid to the Company in United States
dollars. If, in the future, international indirect sales are denominated in
local currencies, foreign currency translations may contribute to significant
fluctuations in, and could have a material adverse effect upon, the Company's
business, operating results and financial condition.

         Proprietary Rights and Risks of Infringement. The Company relies
primarily on a combination of patent, copyright and trademark laws, trade
secrets, confidentiality procedures and contractual provisions to protect its
proprietary rights. The Company also believes that factors such as the
technological and creative skills of its personnel, new product developments,
frequent product enhancements, name recognition and reliable product maintenance
are essential to establishing and maintaining a technology leadership position.
The Company seeks to protect its software, documentation and other written
materials under trade secret and copyright laws, which afford only limited
protection. The Company currently has one United States patent and corresponding
patent applications pending in Europe, Canada and Australia. There can be no
assurance that the Company's patent will not be invalidated, circumvented or
challenged, that the rights granted thereunder will provide competitive
advantages to the Company or that any of the Company's pending or future patent
applications, whether or not being currently challenged by applicable
governmental patent examiners, will be issued with the scope of the claims
sought by the Company, if at all. Furthermore, there can be no assurance that
others will not develop technologies that are similar or superior to the
Company's technology or design around the patents owned by the Company.
Currently, the Company is engaged in litigation with Planning Sciences
International plc and Planning Sciences, Inc. concerning the enforcement and
validity of the Company's U.S. patent. See "Legal Proceedings" in Item 1, Part
II below.

          Despite the Company's efforts to protect its proprietary rights,
unauthorized parties may attempt to copy aspects of the Company's products or to
obtain and use information that the Company regards as proprietary. Policing
unauthorized use of the Company's products is difficult, and while the Company
is unable to determine the extent to which piracy of its software products
exists, software piracy can be expected to be a persistent problem. In addition,
the laws of some foreign countries do not protect the Company's proprietary
rights as fully as do the laws of the United States. There can be no assurance
that the Company's means of protecting its proprietary rights in the United
States or abroad will be adequate or that competitors will not independently
develop similar technology. The Company has entered into source code escrow
agreements with a limited number of its customers and indirect channel partners
requiring release of source code. Such agreements provide that such parties will
have a limited, non-exclusive right to use such code in the event that there is
a bankruptcy proceeding by or against the Company, if the Company ceases to do
business or if the Company fails to meet its contractual obligations. The
provision of source code may increase the likelihood of misappropriation by
third parties.

         The Company expects that software product developers will increasingly
be subject to infringement claims as the number of products and competitors in
the Company's industry segment grows and the functionality of products in
different industry segments overlaps. Any such claims, with or without merit,
could be time consuming to defend, result in costly litigation, divert
management's attention and resources, cause product shipment delays or require
the Company to enter into royalty or licensing agreements. Such royalty or
licensing agreements, if required, may not be available on terms acceptable to
the Company, if at all. In the event of a successful claim of product
infringement against the Company and failure or inability of the Company to
license the infringed or similar technology, the Company's business, operating
results and financial condition would be materially adversely affected.



                                       15
<PAGE>   16
         The Company relies upon certain software that it licenses from third
parties, including software that is integrated with the Company's internally
developed software and used in Essbase to perform key functions. There can be no
assurance that these third-party software licenses will continue to be available
to the Company on commercially reasonable terms. The loss of, or inability to
maintain, any such software licenses could result in shipment delays or
reductions until equivalent software could be developed, identified, licensed
and integrated, which would materially adversely affect the Company's business,
operating results and financial condition.

         Personnel. The effective management of the Company's anticipated growth
will depend, in large part, upon the Company's ability to retain its highly
skilled technical, managerial and marketing personnel as well as its ability to
attract and maintain replacements for the additions to such personnel in the
future.


                                       16
<PAGE>   17
PART II. OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

          On September 27, 1996, the Company filed an action against Comshare,
Incorporated ("Comshare"), the Company's largest reseller, in the United States
District Court for the Northern District of California. The action alleges that
Comshare has breached its obligations under its distribution agreement with the
Company by underpaying royalties and that Comshare fraudulently induced the
Company into entering into the agreement. The action seeks monetary and
injunctive relief preventing Comshare from future distribution of Essbase. On
October 21, 1996, Comshare filed its answer as well as counterclaims against the
Company alleging interference with prospective economic advantage, unfair
competition, defamation and disparagement, and breach of contract. Comshare
claims that the Company has disseminated false and misleading information
concerning Comshare's rights under the agreement and that the Company has
violated certain provisions of the agreement. Comshare seeks monetary and
injunctive relief, including punitive damages. On October 21, 1996, Comshare
filed a motion to dismiss the Company's fraud cause of action and to strike its
claim for injunctive relief, as well as a motion seeking a preliminary
injunction prohibiting the Company from disseminating information which suggests
or implies (i) that Comshare is at risk of losing any rights under the
agreement, (ii) that Comshare engages in fraudulent business practices, or (iii)
that the Company has a basis for seeking injunctive relief against Comshare.
Comshare's motions are set for hearing on January 17, 1997. On October 29, 1996,
Comshare filed an application requesting an expedited hearing on its motions;
the Court denied Comshare's request on November 1, 1996. Discovery in this
litigation has not yet begun.

         The Company believes that it has meritorious claims against Comshare
and that it has meritorious defenses to each of Comshare's counterclaims, and
intends to vigorously pursue its claims and defend itself against the
counterclaims. No assurance can be given as to the outcome of the litigation. 

         On April 16, 1996, Planning Sciences International plc and Planning
Sciences, Inc. (collectively, "Planning Sciences") filed an action against the
Company in the United States District Court for the District of Massachusetts
(the "Massachusetts action") seeking a declaratory judgment that U.S. Patent No.
5,359,724 (the "'724 patent"), owned by the Company, is invalid and not
infringed by Planning Sciences' products. On April 18, 1996, the Company filed
an action against Planning Sciences in the United States District Court for the
Northern District of California (the "California action") alleging that Planning
Sciences infringes the '724 patent and seeking a permanent injunction and
monetary damages, including treble damages. On May 8, 1996, Planning Sciences
filed its answer in the California action including a counterclaim seeking to
declare the '724 patent invalid. Planning Sciences also filed a motion to
dismiss, stay or transfer the action to Massachusetts. That motion, which was
heard on November 13, 1996, has not yet been ruled on by the California
Court. On May 13, 1996, the Company filed a motion to dismiss or transfer the
Massachusetts action to California. That motion has not yet been ruled on by the
Court. Discovery in this litigation has not yet begun.

         The Company believes that it has meritorious claims against Planning
Sciences and that it has meritorious defenses against Planning Sciences' claims
that the '724 patent is invalid, and intends to vigorously pursue its claims and
defend itself against Planning Sciences' claims. No assurance can be given as to
the outcome of the litigation. The preceding pending litigation and any future
litigation against the Company or its employees, regardless of the outcome, is
expected to result in substantial costs and expenses to the Company and
significant diversion of attention by the Company's management personnel.
Accordingly, any such litigation could have a material adverse effect on the
Company's business, operating results and financial condition.



                                       17
<PAGE>   18
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a) Exhibits

              Statement of Computation of Net Income Per Share (Exhibit 11.1)

              Financial Data Schedule (Exhibit 27.1)

          (b) Reports on Form 8-K

              No Reports on Form 8-K were filed during the quarter ended
              September 30, 1996.




                                       18
<PAGE>   19
                                   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.


Date:  November 11, 1996      ARBOR SOFTWARE CORPORATION
                              (Registrant)




                              By: /s/ Stephen V. Imbler
                                  ----------------------------------------------
                                      Stephen V. Imbler
                                      Vice President of Finance and
                                      Administration and Chief Financial Officer
                                      (Duly Authorized Officer and Principal
                                      Financial Officer)




                                       19
<PAGE>   20
                                 EXHIBIT INDEX

Exhibit                           Description


  11.1           Statement of Computation of Net Income Per Share

  27.1           Financial Data Schedule