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

                               FORM 10-Q

(Mark one)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999.

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 No. 1-13521


                         HYPERCOM CORPORATION
           (Exact Name of Registrant as Specified in Its Charter)

                DELAWARE                       86-0828608
   (State or Other Jurisdiction          (IRS Employer ID Number)
    of Incorporation or Organization)

              2851 WEST KATHLEEN ROAD, PHOENIX, ARIZONA 85053
            (Address of Principal Executive Offices) (Zip Code)

                                (602) 504-5000
                        (Registrant's telephone number)


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 he past 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[ ]

Number of shares of the registrant's common stock, $.001 par value per share, 
outstanding as of May 4, 1999, was 33,099,517.
<PAGE>                                1

TABLE OF CONTENTS
PART I    FINANCIAL INFORMATION                                       
  ITEM 1. FINANCIAL STATEMENTS                                         3
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS         7
          REPORT OF INDEPENDENT ACCOUNTANTS                           12
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
          AND RESULTS OF OPERATIONS                                   13
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  18
PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS                 
  ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                            20
    Exhibit 11.1                                                      21
    Exhibit-15.1                                                      22
    Exhibit 27.1                                                      23
    Exhibit 99.1                                                      24

<PAGE>                                2


PART I     FINANCIAL INFORMATION
Item 1.     Financial Statements

HYPERCOM CORPORATION               
Condensed Consolidated Balance Sheet               
(Unaudited and in thousands)               
<TABLE>
<CAPTION>
                                             March 31, 1999    June 30, 1998
ASSETS               
Current Assets
<S>                                         <C>               <C>                              
Cash and cash equivalents                    $ 37,220           $ 55,659 
Marketable securities, at market               29,196             42,641 
Accounts receivable (Net of allowance for
 doubtful accounts of $3,656 and $3,729)       44,331             43,989 
Inventories                                    61,826             60,539 
Deferred income taxes                          11,988             10,991 
Prepaid taxes                                   5,218              2,893 
Prepaid expenses and other current assets      10,416              7,173 
                                              -------            -------
Total current assets                          200,195            223,885 
               
Property, plant and equipment, net             29,174             23,570 
Advances to related parties                         -                258 
Long-term investments                          21,598              9,931 
Other assets                                   12,333              1,933 
                                              -------            -------
Total assets                                 $263,300           $259,577 
                                              =======            =======
               
LIABILITIES AND STOCKHOLDERS' EQUITY               
Current Liabilities:               
Accounts payable                             $ 13,916           $ 17,134 
Accrued liabilities                            15,575             16,537 
Deferred revenue                                2,810                608 
Income taxes payable                            2,523              2,209 
Current portion of Long-term obligations          256                598 
                                              -------            -------
Total current liabilities                      35,080             37,086 
               
Deferred income taxes                           1,847                861 
Long term obligations                           1,396              1,199 
                                              -------            -------
Total liabilities                              38,323             39,146 
               
</TABLE>
(Continued)               
<PAGE>                                3

HYPERCOM CORPORATION               
Condensed Consolidated Balance Sheet (continued)               
(Unaudited and in thousands)               
<TABLE>
<CAPTION>
               
                                           March 31, 1999     June 30, 1998
               
Stockholders' equity:               
<S>                                       <C>               <C>                              
Common stock                                       15                 13 
Paid-in capital                               145,851            145,601 
Receivables from stockholders                  (1,498)            (1,498)
Retained earnings                              85,009             76,315 
                                              -------            -------
                                              229,377            220,431 
               
 Treasury Stock (at cost)                      (4,400)                 - 

Total stockholders' equity                    224,977            220,431 
                                              -------            -------               
               
Total liabilities and stockholders' equity   $263,300           $259,577 
                                              =======            =======
               
</TABLE>
               
The accompanying notes are an integral part of these 
condensed financial statements.               
<PAGE>                                4

                    
HYPERCOM CORPORATION                    
Condensed Consolidated Statement of Income                    
(Unaudited and in thousands, except per share amounts)                    
<TABLE>
<CAPTION>
                                        Three months ended       Nine months ended     
                                           March 31,               March 31,
                                        1999       1998        1999       1998
<S>                                    <C>         <C>         <C>         <C>

Net revenue                            $ 56,304    $ 54,339    $192,881    $204,485 
Costs and expenses:                        
Costs of revenue                         31,977      28,445     100,861     103,566 
Research and development                  6,935       6,097      22,785      17,015 
Selling, general and administrative      19,136      16,637      54,389      51,218 
Non-cash compensation                         -           -           -      10,963 
Total costs and expenses                 58,048      51,179     178,035     182,762 
                                        -------     -------     -------     -------  
Income (loss) from operations            (1,744)      3,160      14,846      21,723 

Interest and other income                 1,723       1,361       4,537       2,634 
Interest and other expense                 (292)       (291)       (786)     (1,661)
Interest expense - related party              -           -           -        (372)     
Foreign currency gain (loss)             (5,000)        198      (5,999)     (1,048)
                                        -------     -------     -------     ------- 
Income (loss) before income taxes        (5,313)      4,428      12,598      21,276 

(Provision) credit for income taxes       1,647        (394)     (3,905)     (6,291)
                                        -------     -------     -------     ------- 
Net income (loss)                      $ (3,666)   $  4,034    $  8,693    $ 14,985 
                                        =======     =======     =======     =======
Net income (loss) per share:                    
Basic earnings (loss) per share          ($0.11)      $0.12      $ 0.26       $0.51 
Weighted average basic common shares     33,098      33,531      33,133      29,107
Diluted earnings (loss) per share        ($0.11)      $0.11      $ 0.25       $0.49 
Weighted average diluted common shares   33,098      35,512      34,509      30,738

</TABLE>
               
The accompanying notes are an integral part of these 
condensed financial statements.               
<PAGE>                                5

 HYPERCOM CORPORATION               
Condensed Consolidated Statement of Cash Flows               
(Unaudited and in thousands)
<TABLE>
<CAPTION>
                                             Nine months ended          
                                                      March 31, 1999   March 31, 1998
<S>                                                   <C>              <C>               
Net cash from (used in) operating activities          $   4,753         $ (6,448)
                
Cash flow from (used in) investing activities:               
Notes receivable                                        (3,900)                - 
Payments received on Notes receivables                     523                 - 
Acquition of controlling interest 
  in subsidary, (net of cash received)                  (5,347)                - 
Acquisition of other assets                               (970)              (21)
Proceeds from disposal of property, 
  plant & equipment                                        830                612 
Purchase of property, plant & equipment                (10,013)            (9,559)
Purchase of investments                                (47,708)           (60,381)
Proceeds from maturity of investments                   51,918                   - 
                                                       -------             -------
Net cash used in investing activities                  (14,667)            (69,349)
               
Cash flow from (used in) financing activities:               
Proceeds of bank notes payable and 
   other debt instruments                               46,542              59,307 
Repayment of bank notes payable and 
   other debt instruments                             (49,802)             (77,749)
Repayments from related parties                           257                  559 
Proceeds from sale of common stock                        252              127,500 
Repurchase of common stock                             (5,159)                   - 
Stock offering costs                                        -               (1,453)
Other                                                     (75)                   - 
                                                       -------             -------
Net cash from (used in) financing activities           (7,985)             108,164 
               
Effect of exchange rate changes                          (540)                 899 
                                                       -------             -------
Net increase (decrease) in cash                       (18,439)              33,266 
               
Cash & equivalents, beginning of period                55,659               16,318 
                                                       -------             -------
Cash & equivalents, end of period                    $  37,220           $  49,584 
                                                       =======                   =======

</TABLE>
The accompanying notes are an integral part of these 
condensed financial statements               
<PAGE>                                6


Notes to Condensed Consolidated Financial Statements
(Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited, condensed consolidated financial statements 
do not include all the information and footnotes required by generally 
accepted accounting principles for complete financial statements. In 
the opinion of management, all adjustments (consisting of normal 
recurring accruals) considered necessary for a fair statement of 
results for the periods have been included.  Operating results for the 
nine month period ended March 31, 1999, are not necessarily indicative 
of the results that may be expected for the year ending June 30, 1999.

This financial information is intended to be read in conjunction with 
Hypercom's audited financial statements and footnotes thereto included 
in Hypercom's Annual Report on Form 10-K for the year ended June 30, 
1998.

For comparative purposes, certain prior period amounts have been
reclassified to conform with the current period presentation.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company generally recognizes product revenue, including sales to 
distributors, upon shipment of product.  Revenue from service 
obligations is recognized over the lives of the contracts.  The Company 
accrues for warranty costs, sales returns and other allowances at the 
time of shipment.

The Company has a contract in which they provide a warranty to the 
customer during the installation period by a third party vendor.  If 
the product does not function properly during this period, the Company 
is obligated to repair it.  At initiation of this contract, the Company 
recognized revenue at the end of the installation period due to its 
lack of history with the customer and contract, and resulting inability 
to estimate warranty costs. During the quarter ended March 31, 1999, 
the Company began recognizing revenue upon shipment for this contract 
based on the history provided by a large number of sales and its 
resulting ability to accurately estimate such warranty costs.  During 
the quarter, revenues recognized under this contract totaled $5.7 
million, which included incremental revenues of $3.8 million resulting 
from recognition of revenue upon shipment.  
  

Software Capitalization

Statement of Financial Accounting Standards No. 86, Accounting for the 
Costs of Computer Software to be Sold, Leased or Otherwise Marketed 
(SFAS No. 86), requires capitalization of certain software development 
costs subsequent to the establishment of technological feasibility.  
The Company's product development process is such that technological 
feasibility is established upon completion of a working model.  Costs 
incurred between completion of the working model and the point at which 
the product is ready for initial shipment have not been significant in 
the past.  Accordingly, all software development costs have been 
expensed as incurred and included in research and development costs.  
However, during the third quarter of fiscal year ending June 30, 1999, 
the Company began to capitalize software development costs in relation 
to the development of software enhancements.  The amount that was 
capitalized in the third quarter ended March 31, 1999, was approximately 
$1.4 million.
<PAGE>                                7

Use Of Derivative Financial Instruments

Due to the increasing market risks resulting from fluctuations in 
foreign currencies, the Company has begun to use derivative financial 
instruments to reduce exposures to its net investments in certain 
foreign locations (principally Brazil).  The Company does not enter 
into financial instruments for trading or speculative purposes.  The 
derivative financial instruments entered into generally include forward 
exchange contracts and foreign currency options maturing in less than 
one year.  The counterparties to these contracts are major financial 
institutions and management believes the risk of loss from 
nonperformance by any counterparty is remote.  

Any premiums or discounts related to forward exchange contracts are 
reported in the balance sheet at cost and amortized to results of 
operations over the life of the contract.  Foreign currency options are 
reported in the balance sheet at quoted market values.  Changes in the 
market value of foreign currency options are reported in results of 
operations in the period in which the change occurs.  Gains and losses 
on the forward contracts arising from changes in foreign currency 
exchange rates are included in results of operations in the period as 
the rate changes.  As of March 31, 1999, the Company had contracts 
totaling $10.0 million outstanding to hedge against its net investment 
in Brazil.  These contracts expire in May and June 1999.  Management 
intents to continue to hedge its net investments in foreign locations 
as deemed necessary on an ongoing basis.

New Pronouncements 

In June 1998, the Financial Accounting Standards Board issued SFAS No. 
133, Accounting for Derivative Instruments and Hedging Activities.  
This statement requires recognition of all derivatives as either assets 
or liabilities on the balance sheet and measurement of those 
instruments at fair value.  Changes in the fair value of derivatives 
are recorded each period in current earnings or other comprehensive 
income (loss).  Proper accounting for changes in fair value of 
derivatives held, is dependent on whether the derivative transaction 
qualifies as an accounting hedge and on the classification of the hedge 
transaction.  The statement is required to be adopted and is effective 
for all fiscal quarters of fiscal years beginning after June 15, 1999, 
and the Company will adopt it in the first quarter of Fiscal Year 2000.  
The Company is evaluating the effect this statement will have on its 
financial reporting and disclosures as well as on its derivative and 
hedging activities.

In March 1998, the Accounting Standards Executive Committee of the 
American Institute of Certified Public Accountants issued Statement of 
Position (SOP) 98-1, Accounting for the Costs of Computer Software 
Developed or Obtained for Internal Use, relating to the treatment of 
costs incurred to develop software for internal use. This SOP is 
effective for financial statements for fiscal years beginning after 
December 15, 1998, and should be applied to internal-use computer 
software costs incurred in those fiscal years for all projects, 
including those projects in progress upon initial application of this 
SOP.  The Company will adopt this SOP in the first quarter of Fiscal 
Year 2000.  The Company is evaluating the effect this SOP will have on 
its financial reporting and disclosures.
<PAGE>                                8

In April 1998, SOP 98-5, Reporting on the Costs of Start-Up Activities, 
was issued and provides guidance on the financial reporting of start-up 
costs and organization costs.  It requires costs of start-up activities 
and organization costs to be expensed as incurred.  This SOP is 
effective for fiscal years beginning after December 15, 1998.  The 
adoption of this standard will have no material effect on the Company's
financial reporting and disclosures. 

In December 1998, SOP 98-9, Modification of SOP 97-2, Software Revenue 
Recognition, With Respect to Certain Transactions, was isssued.  This 
SOP modified SOP 97-2 to permit recognition of revenue for the 
delivered elements of a contract when vendor-specific objective evidence 
of fair value exists for the undelivered elements of the contract.  The 
SOP will be effective for transactions that are entered into in fiscal 
years beginning after March 15, 1999.  Hypercom is currently evaluating 
this SOP's impact on its financial statements.


NOTE 3 - INVENTORIES

Inventories, stated at the lower of cost on a first-in, first-out basis 
or market value, consisted of the following amounts (in thousands):

               March 31, 1999               June 30, 1998
Purchased parts          $ 24,162                $ 18,710 
Work in process             5,339                  11,388 
Finished goods             32,325                  30,441 
                          -------                 -------
                         $ 61,826                $ 60,539 
                          =======                 =======
 

NOTE 4 - SEGMENT INFORMATION

Hypercom has two reportable segments: Point-of-Sale (POS) Systems and 
Network Systems. POS Systems develops, manufactures, markets, and 
supports products that automate electronic payment transactions at the 
point of sale in merchant establishments. Network Systems develops, 
manufactures, markets, and supports enterprise-networking systems. 

Hypercom's reportable segments are strategic business units that offer 
different products and services. They are managed separately because 
each requires different technologies and marketing strategies.

The following table presents certain segment financial information 
unaudited and in thousands for the three month and nine month periods 
ended March 31, 1999, and March 31, 1998:
<PAGE>                                9
 
(Unaudited and in thousands)                                   
<TABLE>
<CAPTION>                                   
                                     Three months ended                 Nine months ended          
                                       March 31, 1999                     March 31, 1999          
                                  POS       Network   Total       POS          Network   Total
                                  Systems   Systems               Systems      Systems
<S>                              <C>       <C>        <C>        <C>       <C>          <C>   
Revenue from external customers   $46,846   $ 9,458    $56,304    $167,488    $25,393   $192,881 
Intersegment revenues               1,925     1,942      3,867       6,832      4,258     11,090 
                                   ------    ------     ------     -------     ------    -------
Total revenues                    $48,771   $11,400    $60,171    $174,320    $29,651   $203,971 
                                   ======    ======     ======     =======     ======    =======
Segment income (loss) from 
    operations                    $ 2,803   $ 1,715    $ 4,518    $ 26,400    $ 2,035   $ 28,435 
                                   ======    ======     ======     =======     ======    =======
Segment assets                                                    $301,543    $27,084  $328,627
                                                                   =======     ======    =======
</TABLE>
<TABLE>
<CAPTION>                                   
                              
                                     Three months ended               Nine months ended          
                                       March 31, 1998                  March 31, 1998          
                                  POS       Network    Total       POS        Network    Total
                                  Systems   Systems                Systems    Systems
<S>                              <C>       <C>        <C>         <C>        <C>        <C>                                   
Revenue from external customers  $50,041    $4,298     $54,339     $182,685   $21,800   $204,485 
Intersegment revenues                  -     1,182       1,182            -     9,050      9,050 
                                   ------    ------     ------     -------     ------    -------
Total revenues                   $50,041    $ 5,480    $55,521     $182,685   $30,850   $213,535
                                   ======    ======     ======     =======     ======    =======

Segment income from (loss) 
    operations                    $10,380   $(2,243)   $ 8,137     $ 47,856   $ (393)   $ 47,463 
                                   ======    ======     ======     =======     ======    =======
Segment assets                                                     $294,897   $32,552    $327,449 
</TABLE>
<TABLE>
<CAPTION>                              
Reconciliation                                  Three months ended   Nine months ended     
                                                       March 31,                March 31,
                                                    1999      1998           1999       1998
<S>                                               <C>         <C>            <C>        <C>                                   
Income from operations for reportable segments    $ 4,518     $ 8,137        $28,435     $47,463 
Elimination of intersegment profits                  (807)     (1,028)         1,992      (1,870)
Unallocated amounts                                   
Corporate expenses                                 (5,455)     (3,949)       (15,581)     (23,870)
                                                   -------     ------         ------       ------
Consolidated income from operations               $(1,744)    $ 3,160        $14,846      $21,723 
                                                   =======     ======         ======       ======
</TABLE>
 
 

NOTE 5 - ACQUISITIONS

Effective October 1, 1998, Hypercom purchased substantially all the 
assets of The Horizon Group, Inc. (Horizon). Horizon is a national 
distributor of equipment for Hypercom and other POS equipment 
manufacturers. In addition to sales of new equipment, the Company 
provides a variety of services, including refurbishing equipment, help 
desk, PIN pad key loading, terminal deployment and other custom 
programs. The acquisition allows Hypercom to meet the needs of a 
segment of its customer base that requires direct-from-manufacturer 
terminal services.

The acquisition was accounted for under the purchase method of 
accounting. The results of Horizon's operations are included in 
Hypercom's condensed consolidated statements of Income and Cash Flows 
beginning with the date of acquisition. 

Horizon was acquired for $5.0 million in cash and $0.5 million in 
Hypercom common stock. The agreement provides for additional payments 
up to $7.0 million, based on Horizon's earnings over the three-year 
period subsequent to the acquisition date. The additional payments are 
to be in the form of Hypercom common stock. The intangible assets 
arising from this transaction will be amortized over periods ranging 
from five to twenty years.
<PAGE>                                10

NOTE 6 - BRAZIL DEVALUATION

As a result of the recent devaluation of the Brazilian Real, the 
Company recorded a pretax loss of $4.7 million, related to the net 
monetary asset exposure for the three months ended March 31, 1999.  
The Company has entered into hedging strategies to mitigate the impact 
of future foreign currency fluctuations.



NOTE 7 - SUBSEQUENT EVENTS

Loan Agreement

On April 1, 1999, the Company entered into a floating rate option note 
payable to refinance certain property of the Company.  The principal 
amount of $10,238,000 is payable in semi-annual installments plus 
interest at a variable rate, amortized over twenty years with 
the final maturity on April 1, 2019. The Company has entered into an 
interest rate swap to fix the interest rate at 7.895%.  The notes are 
collateralized by an unconditional, irrevocable, direct pay letter of 
credit. The letter of credit is subject to renewal on April 1, 2006. 
If the letter of credit is not renewed, the entire remaining principal 
balance will become due and payable.  The letter of credit is 
collateralized by land and buildings.  The Company is required to make 
increasing monthly deposits of $18,490 up to $81,752 over the life of 
the notes into a sinking fund to provide periodic repayment of the notes.

The projected aggregate principal payments on the Floating Rate Option 
Notes, beginning April 1, 1999 are (dollars in thousands): 

Fiscal Year          
      2000               $   230 
      2001                   247 
      2002                   267 
      2003                   287 
      2004                   310 
      Thereafter           8,897 
                          ------
                         $10,238 
                          ======
 
Change Of Year End

On April 20, 1999, the Company's Board of Directors approved the change 
of Hypercom's fiscal year end from June 30 to December 31.  This change 
will be implemented as of December 31, 1999.  The change aligns the 
year to more accurately reflect the Company's natural business cycle.
<PAGE>                                11

Report of Independent Accountants


To the Board of Directors and Stockholders of Hypercom Corporation


We have reviewed the condensed consolidated balance sheet of 
Hypercom Corporation and subsidiaries as of March 31, 1999, and the 
related condensed consolidated statements of income and cash flows for 
the three-month and nine-month periods ended March 31, 1999 and 1998.  
These financial statements are the responsibility of the Company's 
management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants.  A review of 
interim financial information consists principally of applying 
analytical procedures to financial data and making inquiries of persons 
responsible for financial and accounting matters.  It is substantially 
less in scope than an audit conducted in accordance with generally 
accepted auditing standards, the objective of which is the expression 
of an opinion regarding the financial statements taken as a whole.  
Accordingly, we do not express such an opinion.  

Based on our review, we are not aware of any material modifications 
that should be made to the condensed consolidated financial statements 
referred to above for them to be in conformity with generally accepted 
accounting principles. 

We have previously audited, in accordance with generally accepted 
auditing standards, the consolidated balance sheet as of June 30, 1998, 
and the related consolidated statements of income, stockholders' 
equity, and cash flows for the year then ended (not presented herein); 
and in our report dated July 24, 1998, we expressed an unqualified 
opinion on those consolidated financial statements.  In our opinion, 
the information set forth in the accompanying condensed consolidated 
balance sheet as of June 30, 1998, is fairly stated, in all material 
respects, in relation to the consolidated balance sheet from which it 
has been derived.

/s/ PricewaterhouseCoopers LLP

Phoenix, Arizona
May 6, 1999

<PAGE>                                12

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

This Quarterly Report on Form 10-Q contains forward-looking statements 
within the meaning of The Private Securities Litigation Reform Act of 
1995. Words such as "believe", "expect", "intend", "anticipate", 
"estimate", "project", and similar expressions identify forward-looking 
statements, which speak only as of the date the statement was made. 
These forward-looking statements may include, but not be limited to, 
projections of revenue or net income and issues that may affect revenue 
or net income, projections of capital expenditures, plans for future 
operations, products or services, financing needs of the Company, and 
economic conditions, as well as assumptions relating to the foregoing. 

Forward-looking statements are inherently subject to risks and 
uncertainties, some of which cannot be predicted or quantified. Future 
events and actual results could differ materially from those set forth 
in, contemplated by, or underlying the forward-looking statements. 
Statements in this Quarterly Report, including the Notes To The 
Condensed Consolidated Financial Statements and Management's Discussion 
and Analysis of Results of Operations describe factors, among others, 
that could contribute to or cause such differences. Additional risk 
factors that could cause actual results to differ materially from those 
expressed in such forward-looking statements are set forth in Exhibit 
99.1 which is attached hereto and incorporated by reference into this 
Quarterly Report on Form 10-Q. The Company undertakes no obligation to 
publicly update or revise any forward-looking statements, whether as a 
result of new information, future events, or otherwise.


Results of Operations

Net Revenue 

Net revenues for the three month period ended March 31, 1999, increased 
$2.0 million or 3.6% to $56.3 million from $54.3 million in the three 
months ended March 31, 1998. Within Hypercom's Point of Sales (POS) 
business segment, net revenues from the United States increased $6.2 
million due to $7.3 million generated from the Horizon Group, Inc., 
which was acquired by Hypercom effective October 1, 1998.  Net revenues 
from the POS segment also increased in Europe by $1.3 million.  These 
increases were offset by decreases in Latin America ($6.3 million) and 
in Asia ($4.4 million).  The $3.2 million revenue decline in the POS 
business segments was offset by a $5.2 million increase in revenue from 
Hypercom's Network Systems business segment. This increase primarily 
stems from a large branch bank customer in the United Kingdom.

For the nine month period ended March 31, 1999, net revenue decreased 
$11.6 million to $192.9 million from $204.5 million for the nine month 
period ended March 31, 1998. This decrease in revenue is attributable 
to slower POS revenues in Asia (decrease of $23.8 million) and Latin 
America (decrease of $14.6 million). These decreases were partially 
offset by increased POS revenue from the United States (increase of 
$17.1 million) and Europe (increase of $6.0 million). Revenue from The 
Horizon Group, Inc. accounted for $15.0 million of the increase in 
United States revenue.   Revenue from Network Systems has increased 
$3.6 million from $21.8 million in the nine months ended March 31, 1998, 
to $25.4 million for the nine months ended March 31, 1999, due to a 
large branch bank customer in the United Kingdom.

<PAGE>                                13

Cost of Revenue 

Hypercom's cost of revenue includes the cost of raw materials, 
manufacturing labor, overhead, and subcontracted manufacturing costs. 
The cost of revenue increased by $3.6 million from $28.4 million to 
$32.0 million for the three month period ended March 31, 1999, compared 
to the same three month period ended March 31, 1998. Hypercom's cost of 
revenue as a percentage of revenue increased to 56.8% for the three 
months ended March 31, 1999, up from 52.3% for the three months ended 
March 31, 1998. The cost of revenue as a percentage of revenue for the 
nine months ended March 31, 1999, was 52.3%, an increase from the 50.6% 
for the nine months ended March 31, 1998.

This increase in cost of revenue as a percentage of revenue is the 
result of the previously mentioned decline in international POS sales 
that have been replaced by lower margin revenues from the recently 
acquired Horizon Group.  Horizon accounted for $6.9 million of the 
$32.0 million in cost of revenues for the three months ended March 31, 
1999, and $13.1 million of the $100.9 million in cost of revenue for 
the nine months ended March 31, 1999.


Research and Development Expense

Research and development expenses consist mainly of software and 
hardware engineering costs and the cost of development personnel. 
Research and development expense increased by $0.8 million, or 13.7%, 
to $6.9 million in the three month period ended March 31, 1999, 
compared to $6.1 million for the three month period ended March 31, 
1998. This increase reflects Hypercom's continued investment in new 
product development.

For the nine month period ended March 31, 1999, Hypercom's research and 
development expense increased 33.9% to $22.8 million compared to $17.0 
million for the same period ended March 31, 1998.  The overall increase 
is a result of development costs for new POS products including the 
Interactive Customer Environment (ICE) terminal family and the 
Ascendent Server software. 

Statement of Financial Accounting Standards No. 86, Accounting for the 
Costs of Computer Software to be Sold, Leased or Otherwise Marketed 
(SFAS No. 86), requires capitalization of certain software development 
costs subsequent to the establishment of technological feasibility.  
The Company's product development process is such that technological 
feasibility is established upon completion of a working model.  Costs 
incurred between completion of the working model and the point at which 
the product is ready for initial shipment have not been significant in 
the past.  Accordingly, all software development costs have been 
expensed as incurred and included in research and development costs.  
However, during the third quarter of fiscal year ended June 30, 1999, 
the Company began to capitalize software development costs in relation 
to the development of software enhancements.  The amount that was 
capitalized in the third quarter ended March 31, 1999, was approximately 
$1.4 million.

Selling, General, and Administrative Expense 

Sales and marketing expenses, administrative personnel costs, and 
facilities operation make up the selling, general, and administrative 
expenses. These expenses totaled $19.1 million for the three month 

<PAGE>                                14
period ended March 31, 1999, or $2.5 million more than the three month 
period ended March 31, 1998. As a percentage of revenues, these 
expenses increased from 30.6% of revenue for the three month period 
ended March 31, 1998, to 34.0% for three month period ended March 31, 
1999.  The $2.5 million increase is attributable to:
* $0.5 million of selling, general and administrative expenses related 
to the operations of The Horizon Group, Inc.,
* $2.0 million increase in international selling expenses related to 
Asian, Australian, and Latin American markets, and
* Increased corporate overhead expenses related to facilities 
expansion, personnel and management information systems (MIS) 
upgrades.

For the nine month period ended March 31, 1999, selling, general and 
administrative expenses were up $3.2 million to $54.4 million from 
$51.2 million for the nine month period ended March 31, 1998.  The $3.2 
million increase was primarily attributable to the following factors:
* $1.7 million of selling, general and administrative expenses related 
to the operations of The Horizon Group, Inc.,
* $0.7 million of amortized costs related to the acquisition  of the 
Advantage Group, and
* Increased corporate overhead related to facilities expansion, 
personnel and management information systems (MIS) upgrades.


Non-cash Compensation

Hypercom did not have any non-cash compensation expenses for the three 
or nine month periods ended March 31, 1999. The non-cash charges for 
the nine month period ended March 31, 1998, resulted from specific 
provisions of a compensation package for the President and Chief 
Executive Officer which terminated upon completion of Hypercom's 
initial public offering. 


Income from Operations 

Income from operations decreased by $4.9 million from $3.2 million in 
the three month period ended March 31, 1998, to a loss of $1.7 million 
for the three month period ended March 31, 1999. As a percentage of 
revenue, income from operations decreased from 5.8% to -3.1%, 
respectively. This loss was attributable to the following:
* $0.8 million in additional research and development expenses, 
* $2.5 million of increases in selling, general and administrative 
expenses, and
* $1.6 million reduction in gross margin.

Income from operations decreased $6.9 million to $14.8 million for the 
nine month period ended March 31, 1999, from $21.7 million in the nine 
month period ended March 31, 1998.  The decrease in income from 
operations was attributable to the following:
* Revenue decreased 5.7%, or $11.6 million, with the relating decrease 
in gross margin of $8.9 million,
* Research and development expense increased 33.9% or $5.8 million, and
* $3.2 million of increased selling, general and administrative 
expenses.

<PAGE>                                15
Net Interest, Foreign Currency Losses and Other Items 

Interest income consisted primarily of returns on short and long-term 
investments, while foreign currency losses resulted from operations in 
volatile markets, principally in Brazil.  During the three month period 
ended March 31, 1999, the net interest and foreign currency losses 
amounted to a net loss of $3.6 million compared to income of $1.3 
million for the same period ended March 31, 1998.  The decrease relates 
primarily to the Brazilian currency fluctuations. As a result of the 
recent devaluation of the Brazilian Real, the Company recorded a pretax 
loss of $4.7 million, related to the net monetary asset exposure for 
the three months ended March 31, 1999.  The Company has entered into 
hedging strategies for Brazil and Australia to mitigate the impact of 
future foreign currency fluctuations.

During the nine month period ended March 31, 1999, net interest and 
other items were a net loss of $2.2 million, as compared to a loss of 
$0.4 million during the same period ended March 31, 1998.


Income Taxes 

The provisions (credits) for Federal, State and foreign taxes were 
($1.6) million and $0.4 million in the three months ended March 31, 
1999, and March 31, 1998, respectively. The provisions for Federal, 
State and foreign taxes were $3.9 million and $6.3 million in the nine 
months ended March 31, 1999, and March 31, 1998.  Hypercom's effective 
tax rate was 31% and 30% for the nine month periods ended March 31, 
1999 and 1998, respectively. Hypercom's tax rate is typically lower 
than the US federal statutory rate due to the following factors: 
* Research and experimentation tax credits in Australia and the US,
* Sales in foreign jurisdictions with lower tax rates, and
* The use of a foreign sales corporation offering lower taxes on 
certain international sales.


Liquidity and Capital Resources

Hypercom requires working capital to support inventory, maintain 
accounts receivable balances and fund capital expenditures needed to 
support its operations and net growth. 

As of March 31, 1999, Hypercom's working capital was $165.0 million, 
which included cash, cash equivalents, and short-term investments of 
$66.4 million. Hypercom funds working capital requirements with cash 
from operations and short-term borrowing when necessary. Net cash 
from operating activities was $4.8 million for the nine month period 
ended March 31, 1999 and the net cash used in operating activities 
was $6.5 million for the same period in 1998. 

Hypercom's capital commitments primarily consist of the purchase or 
lease of facilities and equipment. Hypercom used $10.0 million in the 
nine months ended March 31, 1999, to purchase fixed assets.  These 
consisted of:
* $ 4.5 million for facilities expansions, and
* $ 5.5 million for additional equipment including manufacturing 
equipment, computer hardware and software.

Hypercom maintains a two-year $10.0 million revolving line of credit 
that expires in December 2000. Hypercom believes that its current net 
capital position combined with the cash generated by operations and 
available borrowings are sufficient to fund operations for the 
foreseeable future.

<PAGE>                                16

On April 1, 1999, the Company entered into a floating rate option note 
payable to refinance certain property of the Company.  The principal 
amount of $10,238,000 is payable in semi-annual installments plus 
interest a variable rate, amortized over twenty years with 
the final maturity on April 1, 2019. The Company has entered into an 
interest rate swap to fix the interest rate at 7.895%.  The notes are 
collateralized by an unconditional, irrevocable, direct pay letter of 
credit. The letter of credit is subject to renewal on April 1, 2006. 
If the letter of credit is not renewed, the entire remaining principal 
balance will become due and payable.  The letter of credit is 
collateralized by land and buildings.  The Company is required to make 
increasing monthly deposits of $18,490 up to $81,752 over the life of 
the notes into a sinking fund to provide periodic repayment of the 
notes.

New Accounting Pronouncements

See Note 2 of the Notes to Condensed Consolidated Financial Statements 
in Part I.

Year 2000 Issues

Hypercom began a comprehensive project in 1996 to prepare its internal 
computer systems for the year 2000.  Hypercom believes it's 
implementation of a new enterprise-wide information management system, 
principally installed to improve operating efficiency, will address 
Hypercom's internal year 2000 compliance issues, and therefore does not 
believe the year 2000 will have a significant impact on operations.

Hypercom has also reviewed other systems within the Company, from 
desktop applications to the software utilized within Hypercom's 
telecommunications system, and has concluded that only a few 
applications are not capable of making the transition from 1999 to 
2000.  The costs associated with such upgrades are minimal, and will be 
substantially offset through savings generated through increased 
productivity and enhanced functionality.  

At this time, Hypercom does not believe it is necessary to adopt a 
contingency plan covering the possibility that the remaining year 2000 
upgrades will not be completed on a timely manner, but will continue to 
assess the need for such a plan.

Hypercom develops and distributes computer hardware and software, and 
has thoroughly reviewed such systems for year 2000 compliance.  Because 
of the interaction between Hypercom's hardware/software with other 
manufacturer's hardware/software, Hypercom refrains from warranting 
Year 2000 compliance. In order to make Hypercom's POS terminal 
customers aware of potential issues with the transition from 1999 to 
2000, Hypercom has, at its own expense, provided over ten thousand test 
cards to enable Hypercom's customers to fully test the ability of 
Hypercom's products, when interacting with other vendors 
software/hardware, to ascertain whether or not a Year 2000 compliance 
issue is present.  

Hypercom's IEN/NAC products do not utilize an internal "clock," and 
there are no Year 2000 compliance issues with such products.  
Workstation software products may have a Year 2000 compliance issue 
because of the operating system and database program utilized by 
Hypercom's customers, not related to the applications developed and 
distributed by Hypercom.

Nevertheless, Hypercom makes no warranty or representation regarding 
Year 2000 compliance and believes it is the customer's ultimate 
responsibility to verify whether or not there is a Year 2000 compliance 
issue.

<PAGE>                                17

Hypercom faces risk to the extent that suppliers of products and 
services purchased by Hypercom and others with whom Hypercom transacts 
business on a worldwide basis do not have business products and 
services that comply with the year 2000 requirements. Hypercom is in 
the process of obtaining assurances from most of its key suppliers that 
their products and services are year 2000 compliant.  In the event any 
such third party cannot in a timely manner, provide Hypercom with 
products and services that meet the year 2000 requirements, Hypercom 
could be materially adversely affected. 


Backlog

As of March 31, 1999, Hypercom had backlog of $131.0 million, or an 
increase of 80.9% compared to the same date in 1998.  December 31, 1998 
backlog was $118 million, September 30, 1998, backlog was $92.2 million 
and June 30, 1998, was $77.6 million. Backlog includes all revenue 
specified in signed contracts and purchase orders expected to be 
realized within one year. 


Forward-Looking Statements

Certain statements made above, which are summarized below, are forward-
looking statements that involve risks and uncertainties, and actual 
results may be materially different. Factors that could cause actual 
results to differ include those identified as follows:

The belief that Hypercom's effective tax rate is typically lower than 
the us federal statutory rate - Changes in the mix of sales to or away 
from foreign jurisdictions with lower tax rates and changes in US or 
foreign tax laws may inhibit Hypercom's ability to maintain its overall 
effective tax rate at present levels.

The belief that Hypercom's current net capital position, combined with 
the Cash generated by operations and available borrowings, is 
sufficient to fund operations for the foreseeable future - Changes in 
anticipated operating results, credit availability and equity market 
conditions may inhibit Hypercom's ability to maintain or raise 
appropriate levels of cash.

The belief that the cost of transitioning to year 2000 compatible 
Information systems will be offset by cost savings generated through 
Increased productivity and the ability to enhance internal reporting - 
Changes in anticipated levels of expenditures, degrees of difficulty in 
implementing new systems and amounts of cost savings may inhibit 
Hypercom's ability to offset the cost of transitioning to year 2000 
compatible systems.

Item 3. Quantitative and Qualitative Disclosures About Market 
Risk

Hypercom is exposed to financial market risks, including changes in 
interest rates and foreign currency exchange rates. Nevertheless, the 
fair value of Hypercom's investment portfolio or related income would 
not be significantly impacted by either a 100 basis point increase or 
decrease in interest rates, due primarily to the short-term nature of 
the major portion of Hypercom's investment portfolio.

<PAGE>                                18

A substantial portion of Hypercom's revenue and capital spending is 
transacted in U.S. dollars. However, Hypercom does at times enter into 
these transactions in other currencies, such as the Hong Kong dollar, 
Australian dollar, Brazilian Real and other Asian and European 
currencies. Hypercom has, from time to time, established revenue and 
balance sheet hedging programs to protect against reductions in value 
and cash flow volatility caused by changes in foreign exchange rates. 
Such programs are intended to reduce market risks, but do not always 
eliminate the impact of foreign currency exchange volatility.

Hypercom does not purchase or hold any derivative financial instruments 
for the purpose of speculation or arbitrage. See information/discussion 
appearing in subcaption "Risks Associated with International Operations 
and Foreign Currency Fluctuations" of "CAUTIONARY STATEMENT REGARDING 
FORWARD-LOOKING STATEMENTS AND RISK FACTORS" set forth in Exhibit 99.1, 
attached hereto. 

<PAGE>                                19


PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

See Item 1 of Part II of Hypercom's Form 10-Q for the three month 
period ended September 30, 1998, for disclosures regarding pending 
matters.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits
Exhibit Number      Description of Exhibit
--------------      ---------------------
        11.1        Statement re: Computation of Per Share Earnings
        15.1        Letter re: Unaudited Interim Financial Information
        27.1        Financial Data Schedule
        99.1        Cautionary Statement Regarding Forward-
                    Looking Statements and Risk Factors

(b) Reports on Form 8-K

The Company filed Form 8-K on April 27, 1999, regarding the change in 
the Company's fiscal year end.


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.

HYPERCOM CORPORATION

Date: May 11, 1999     By: /s/ Jonathon E. Killmer
                       Jonathon E. Killmer
                       Senior Vice President and 
                       Chief Financial Officer
                       (Duly Authorized Officer and 
                        Principal Financial Officer)



EXHIBIT INDEX

Exhibit No.   Description
-----------   -----------
     11.1     Statement re: Computation of Per Share Earnings
     15.1     Letter re: Unaudited Interim Financial Information     
     27.1     Financial Data Schedule
     99.1     Cautionary Statement Regarding Forward Looking 
              Statements and Risk Factors

<PAGE>                                20