---

##### 

---

[X] Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

###### For the quarterly period ended September 30, 2001

or

[  ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the
transition period from _________ to ________

Commission File Number 0-24720

Business Objects S.A.(Exact name of registrant as specified in its charter)

|Republic of France(State or other jurisdiction ofincorporation or
organization) | None(I.R.S. Employer  Identification No.)
|------------------------------------------------------------------------------- | -----------------------------------------

157-159 Rue Anatole France, 92309 Levallois-Perret, France(Address of principal executive offices)

#### (408)
953-6000(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.

|Yes____X___ | No_________
|----------- | -----------
|            |            



The number of outstanding shares of each of the issuers classes of capital or common stock as of October 31, 2001 was 61,681,081 Ordinary Shares of
Euro 0.10 nominal value, including 15,587,004 American Depositary Shares (as evidenced by American Depositary Receipts), each corresponding to one Ordinary Share.

---



---

Business Objects S.A.Index

# 

|PART I. FINANCIAL INFORMATION | Page                                                                                                       
|----------------------------- | -----------------------------------------------------------------------------------------------------------
|                              |                                                                                                            
|                              |                                                                                                            
|Item 1.                       | Unaudited Consolidated Financial Statements:                                                               
|                              |                                                                                                            
|                              | Condensed Consolidated Balance Sheets at
September 30, 2001 and December 31, 2000                          
|                              |                                                                                                            
|                              | Condensed Consolidated Statements of Income for the
three and nine months ended September 30, 2001 and 2000
|                              |                                                                                                            
|                              | Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 2001 and 2000      
|                              |                                                                                                            
|                              | Notes to Condensed Consolidated Financial Statements                                                       
|                              |                                                                                                            
|Item 2.                       | Managements Discussion and Analysis of Financial Condition and Results of Operations                      
|                              |                                                                                                            
|Item 3.                       | Quantitative and Qualitative Disclosures about Market Risk                                                 
|                              |                                                                                                            
|PART II.                      | OTHER INFORMATION                                                                                          
|                              |                                                                                                            
|                              |                                                                                                            
|SIGNATURES                    | 26                                                                                                         

---

BUSINESS OBJECTS S.A. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of US dollars, except for share amounts)

|                                                                   | September 30, 2001 |         | December 31, 2000 |  
|------------------------------------------------------------------ | ------------------ | ------- | ----------------- | -
|                                                                   |                    |         |                   |  
|                                                                   | (unaudited)        |         | (note)            |  
|ASSETS                                                             |                    |         |                   |  
|Current assets:                                                    |                    |         |                   |  
|Cash and cash equivalents                                          | $                  | 221,361 |                   | $
|Restricted cash, current                                           |                    | 7,790   |                   |  
|Accounts receivable, net                                           |                    | 78,602  |                   |  
|Other current assets                                               |                    | 22,989  |                   |  
|                                                                   |                    |         |                   |  
|Total current assets                                               |                    | 330,742 |                   |  
|Goodwill and other intangible assets, net                          |                    | 15,155  |                   |  
|Property and equipment, net                                        |                    | 37,222  |                   |  
|Restricted cash- long term                                         |                    | 833     |                   |  
|Deposits and other assets                                          |                    | 5,521   |                   |  
|                                                                   |                    |         |                   |  
|Total assets                                                       | $                  | 389,473 |                   | $
|                                                                   |                    |         |                   |  
|                                                                   |                    |         |                   |  
|LIABILITIES AND SHAREHOLDERS EQUITY                               |                    |         |                   |  
|Current liabilities:                                               |                    |         |                   |  
|Accounts payable                                                   | $                  | 15,287  |                   | $
|Accrued payroll and related expenses                               |                    | 31,652  |                   |  
|Deferred revenue                                                   |                    | 52,547  |                   |  
|Other current liabilities                                          |                    | 44,672  |                   |  
|                                                                   |                    |         |                   |  
|Total current liabilities                                          |                    | 144,158 |                   |  
|Notes payable- long term                                           |                    | 2,755   |                   |  
|Shareholders equity                                               |                    |         |                   |  
|Ordinary shares, Euro 0.10 nominal value ($0.09 U.S. as of         |                    |         |                   |  
|September 30, 2001):                                               |                    |         |                   |  
|Authorized 86,231, at September 30, 2001 and 83,086 at             |                    |         |                   |  
|December 31, 2000;                                                 |                    |         |                   |  
|Issued and outstanding 61,587 at September 30, 2001                |                    |         |                   |  
|and 60,584 at December 31, 2000                                    |                    | 6,559   |                   |  
|Additional paid-in capital                                         |                    | 146,841 |                   |  
|Treasury stock, 818 shares at September 30, 2001 and 575 shares at |                    |         |                   |  
|December 31, 2000                                                  |                    | (9,049  | )                 |  
|Retained earnings                                                  |                    | 125,364 |                   |  
|Accumulated other comprehensive loss                               |                    | (27,155 | )                 |  
|                                                                   |                    |         |                   |  
|Total shareholders equity                                         |                    | 242,560 |                   |  
|                                                                   |                    |         |                   |  
|Total liabilities and shareholders equity                         | $                  | 389,473 |                   | $
|                                                                   |                    |         |                   |  

Note: The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date.

See accompanying notes to Condensed Consolidated Financial Statements.

-3-

---

BUSINESS OBJECTS S.A. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands of US dollars, except per ADS and per share data)

|                                                                      | Three Months Ended  September 30 |        | Nine Months Ended  September 30 |       
|--------------------------------------------------------------------- | -------------------------------- | ------ | ------------------------------- | ------
|                                                                      |                                  | 2001   |                                 | 2000  
|                                                                      |                                  |        |                                
|Revenues:                                                             | (unaudited)                      |        | (unaudited)                    
|License fees                                                          | $                                | 55,293 | $                               | 53,427
|Services                                                              |                                  | 43,907 |                                 | 32,578
|                                                                      |                                  |        |                                 |       
|Total revenues                                                        |                                  | 99,200 |                                 | 86,005
|Cost of revenues:                                                     |                                  |        |                                 |       
|License fees                                                          |                                  | 532    |                                 | 524   
|Services                                                              |                                  | 15,712 |                                 | 13,097
|                                                                      |                                  |        |                                 |       
|Total cost of revenues                                                |                                  | 16,244 |                                 | 13,621
|                                                                      |                                  |        |                                 |       
|Gross margin                                                          |                                  | 82,956 |                                 | 72,384
|Operating expenses:                                                   |                                  |        |                                 |       
|Sales and marketing                                                   |                                  | 50,419 |                                 | 41,091
|Research and development                                              |                                  | 13,447 |                                 | 11,507
|General and administrative                                            |                                  | 5,073  |                                 | 5,270 
|Goodwill                                                              |                                  | 1,122  |                                 | 1,051 
|                                                                      |                                  |        |                                 |       
|Total operating expenses                                              |                                  | 70,061 |                                 | 58,919
|                                                                      |                                  |        |                                 |       
|Income from operations                                                |                                  | 12,895 |                                 | 13,465
|Interest and other income, net                                        |                                  | 2,093  |                                 | 3,173 
|                                                                      |                                  |        |                                 |       
|Income before provision for income taxes                              |                                  | 14,988 |                                 | 16,638
|Provision for income taxes                                            |                                  | (5,696 | )                               | (6,487
|                                                                      |                                  |        |                                 |       
|Net income                                                            | $                                | 9,292  | $                               | 10,151
|                                                                      |                                  |        |                                 |       
|Net income per ADS and share-basic                                    | $                                | 0.15   | $                               | 0.17  
|                                                                      |                                  |        |                                 |       
|ADS and shares used in computing net income per ADS & per share-basic |                                  | 60,823 |                                 | 60,180
|                                                                      |                                  |        |                                 |       
|Net income per ADS and share-diluted                                  | $                                | 0.15   | $                               | 0.15  
|                                                                      |                                  |        |                                 |       
|                                                                      |                                  |        |                                 |       
|ADS and shares and common share equivalents used in                   |                                  |        |                                 |       
|computing net income per ADS & per share-diluted                      |                                  | 63,762 |                                 | 65,699

See accompanying notes to Condensed Consolidated Financial Statements.

-4-

---

BUSINESS OBJECTS S.A. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands of US dollars)

|                                                                  | Nine Months Ended  September 30,
|----------------------------------------------------------------- | --------------------------------
|                                                                  |                                 
|Cash flows from operating activities:                             |                                 
|Net income                                                        | $                               
|Adjustments to reconcile net income to net                        |                                 
|Cash provided by operating activities:                            |                                 
|Depreciation and amortization                                     |                                 
|Changes in operating assets and liabilities:                      |                                 
|Accounts receivable, net                                          |                                 
|Current and other assets                                          |                                 
|Accounts payable                                                  |                                 
|Accrued payroll and related expenses                              |                                 
|Deferred revenue                                                  |                                 
|Other current liabilities                                         |                                 
|                                                                  |                                 
|Net cash provided by operating activities                         |                                 
|                                                                  |                                 
|                                                                  |                                 
|Cash flows from investing activities:                             |                                 
|Purchases of property and equipment                               |                                 
|Business and minority interest acquisitions, net of cash acquired |                                 
|                                                                  |                                 
|Net cash used for investing activities                            |                                 
|                                                                  |                                 
|Cash flows from financing activities:                             |                                 
|Issuance of shares                                                |                                 
|Purchase of treasury shares                                       |                                 
|Issuance of notes payable                                         |                                 
|Changes in restricted cash                                        |                                 
|Repayment of notes payable                                        |                                 
|                                                                  |                                 
|Net cash provided by (used for) financing activities              |                                 
|                                                                  |                                 
|Effect of foreign exchange rate changes on cash                   |                                 
|and cash equivalents                                              |                                 
|                                                                  |                                 
|Net increase in cash and cash equivalents                         |                                 
|Cash and cash equivalents at the beginning of the period          |                                 
|                                                                  |                                 
|Cash and cash equivalents at the end of the period                | $                               
|                                                                  |                                 

See accompanying notes to Condensed Consolidated Financial Statements.

---

Business Objects S.A.Notes to Condensed Consolidated Financial StatementsSeptember 30, 2001

1.       Basis of Presentation

> The accompanying
> unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, applied on a consistent basis. As permitted by Form 10-Q, certain information and footnote
> disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. In the opinion of management, all adjustments, consisting only of normal recurring adjustments
> necessary for a fair presentation of our financial position, results of operations, and cash flows for the interim periods presented have been made. Operating results for the three month and nine month periods ended September 30, 2001 are not
> necessarily indicative of the results that may be expected for the year ending December 31, 2001. These financial statements should be read in conjunction with our audited consolidated financial statements and footnotes as included in our Annual
> Report on Form 10-K for the year ended December 31, 2000.

2.Use of Estimates

> The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial
> statements and accompanying footnotes. Actual results could differ from those estimates.

3.       Accounts Receivable

> Accounts receivable are stated net of allowances for sales returns and doubtful accounts of $4,147,000 at September 30, 2001 and $3,987,000 at December 31, 2000.

4.       Revenue Recognition

> The Company enters into arrangements for the sale of 1) licenses of software products and related
> maintenance contracts; 2) bundled licenses, maintenance, and services; and 3) services on a time and material basis. In instances where maintenance is bundled with a license of software products, such maintenance terms are typically one
> year. For each arrangement, the Company determines whether evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collection is probable. If any of these
> criteria are not met, revenue recognition is deferred until such time as all of the criteria are met. For those contracts that consist solely of license and maintenance, the Company recognizes
> license revenues based upon the residual method after all elements other than maintenance have been delivered as prescribed by the Statement of Position 98-9 Modification of SOP No. 97-2 with Respect to Certain Transactions. The Company
> recognizes maintenance revenues over the term of the maintenance contract as vendor specific objective evidence that fair value for maintenance exists. There is no right of return or price protection for sales to

-6-

---

> domestic and international distributors or value-added resellers (collectively, resellers). In situations where the reseller has a purchase order from
> the end-user that is immediately deliverable, the Company recognizes revenue on shipment to the reseller, if other criteria in SOP 97-2 are met, since the Company has no risk of concessions. Services
> can consist of maintenance, training and/or consulting services. In all cases, the Company assesses whether the service element of the arrangement is essential to the functionality of the other elements of the arrangement. When software services are
> considered essential, revenue under the arrangement is recognized using contract accounting. When software services are not considered essential, the revenue allocable to the software services is recognized as the services are performed. Revenue is
> recognized using contract accounting for arrangements involving customization or modification of the software or where software services are considered essential to the functionality of the software. Revenue from these software arrangements is
> recognized using the percentage-of-completion method with progress-to-completion measured using labor cost inputs. For those arrangements for which the Company has concluded that the service element
> is not essential to the other elements of the arrangement, the Company determines whether the services are available from other vendors, do not involve a significant degree of risk or unique acceptance criteria, and whether the Company has
> sufficient experience in providing the service to be able to separately account for the service. When the service qualifies for separate accounting, the Company uses vendor specific objective evidence of fair value for the services and the
> maintenance to account for the arrangement using the residual method, regardless of any separate prices stated within the contract for each element. Vendor-specific objective evidence of fair value
> of services is based upon hourly rates. As previously noted, the Company enters into contracts for services alone and such contracts are based upon time and material basis. Such hourly rates are used to assess the vendor specific objective evidence
> of fair value in multiple element arrangements.

-7-

---

|5. | Net Income per ADS and per Share                                                                                                                                                       |                                  |        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -------
|   |                                                                                                                                                                                        |                                  |        
|   | The following table sets forth the computation of basic and diluted net income per American Depositary Share (ADS) and per share (in thousands, except per
ADS and per share amounts):
|   |                                                                                                                                                                                        |                                  |        
|   |                                                                                                                                                                                        | Three Months Ended September 30, |        
|   |                                                                                                                                                                                        | 2001                             | 2000   
|   | Numerator:                                                                                                                                                                             |                                  |        
|   | Net Income                                                                                                                                                                             | $9,292                           | $10,151
|   |                                                                                                                                                                                        |                                  |        
|   |                                                                                                                                                                                        |                                  |        
|   | Denominator:                                                                                                                                                                           |                                  |        
|   | Basic weighted average ADSs and shares
outstanding                                                                                                                                     | 60,823                           | 60,180 
|   |                                                                                                                                                                                        |                                  |        
|   |                                                                                                                                                                                        |                                  |        
|   | Incremental ordinary shares attributable to shares
issuable under employee stock plans and warrants                                                                                    | 2,939                            | 5,519  
|   |                                                                                                                                                                                        |                                  |        
|   |                                                                                                                                                                                        |                                  |        
|   | Diluted weighted average ADS and shares
outstanding                                                                                                                                    | 63,762                           | 65,699 
|   |                                                                                                                                                                                        |                                  |        
|   |                                                                                                                                                                                        |                                  |        
|   | Net income per ADS and per share  basic                                                                                                                                               | $0.15                            | $0.17  
|   |                                                                                                                                                                                        |                                  |        
|   |                                                                                                                                                                                        |                                  |        
|   | Net income per ADS and per share - diluted                                                                                                                                             | $0.15                            | $0.15  
|   |                                                                                                                                                                                        |                                  |        



|6. | Comprehensive Income                                                                                                                                                                                                                                                 |                                   |         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --------
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   | Comprehensive income includes foreign currency translation gains and losses that have been previously excluded from net income and reflected instead in
stockholders equity. The following table sets forth the calculation of comprehensive income (in thousands):
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   |                                                                                                                                                                                                                                                                      | Three Months Ended  September 30, |         
|   |                                                                                                                                                                                                                                                                      | 2001                              | 2000    
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   | Net income                                                                                                                                                                                                                                                           | $9,292                            | $10,151 
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   | Change in cumulative translation adjustment                                                                                                                                                                                                                          | 11,363                            | (11,294)
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   |                                                                                                                                                                                                                                                                      |                                   |         
|   | Total comprehensive income                                                                                                                                                                                                                                           | $20,655                           | $(1,143)
|   |                                                                                                                                                                                                                                                                      |                                   |         

-8-

---

|7.  |  | Segmented Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |  | The Company has one reportable segment  business intelligence software products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|8.  |  | Shareholders Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |  | Three for Two Stock Split. During February 2001, the Companys Shareholders and Board of Directors approved a three for two stock split to be effected in the form of a dividend of the
Companys ordinary shares and American depositary shares. The split was effective on March 12, 2001. All share, ADS, per share and per ADS data has been adjusted for the split.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |  | Stock Repurchase Program. During September 2001, the Board of Directors authorized a share repurchase program whereby the Company could repurchase up to 2,000,000 of its ordinary shares or ADSs at
a price per share not to exceed 60 Euros per share. In September 2001, the Company repurchased on the Euronext Paris Exchange a total of 243,175 ordinary shares for an aggregate cost of $4.4 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|9.  |  | Recent Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |  | In June 2001, the Financial Accounting Standards Board issued Statement No. 141, Business Combinations (FAS 141) and No. 142, Goodwill and Other Intangible Assets. (FAS
142). FAS 141 is effective for all business combinations entered into subsequent to July 1, 2001 and eliminates the pooling-of-interests method of accounting for business combinations. It includes new criteria to recognize intangible assets
separately from goodwill. Under FAS 142, goodwill and other intangible assets with indefinite lives are no longer amortized but are reviewed at least annually for impairment. Separable intangible assets that are deemed to have a definite life will
continue to be amortized over the estimated useful life. FAS 142 is effective with respect to the nonamortization of goodwill and certain intangible assets on January 1, 2002 for amounts currently recorded on the Companys balance sheet and
will apply to any goodwill and certain intangible assets acquired after September 30, 2001. The Company is investigating the impact, if any, on the results of its operations and its financial position from the implementation of FAS 141 and
142.                                                                
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10. |  | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |  | On October 30, 2001, an action for alleged patent infringement was filed in the United States District Court for the Eastern District of Virginia against the Company and its subsidiary, Business Objects Americas by MicroStrategy Inc.
The complaint alleges that the Company's software products, Broadcast Agent, Infoview and Broadcast Agent Publisher, infringe MicroStrategy's United States Patent No. 6,279,033 entitled "System and Method for Asynchronous Control of Report
Generation Using a Network Interface" and United States Patent No. 6,260,050 entitled "System and Method of Adapting Automatic Output of Service Related OLAP Reports to Disparate Output Devices". The complaint seeks relief in the form
of an injunction against the Company and unspecified damages. The Company has been recently served and it is currently evaluating the merits of the complaint. However, management's current assessment is that the Company's products do not infringe.
If successful, a claim of infringement against the Company and its inability to license the infringed or similar technology on commercially reasonable terms could have a material adverse affect on its business, operating results, and financial
condition.

-9-

---

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

The following discussion and analysis should be read together with our Condensed Consolidated Financial Statements and the Notes to those statements included elsewhere in this Form 10-Q. This discussion contains
forward-looking statements based on our current expectations, assumptions, estimates, and projections about Business Objects and our industry. These forward-looking statements involve risks and uncertainties. Business Objects actual results
could differ materially from those indicated in these forward-looking statements as a result of certain factors, as more fully described in the Risk Factors section and elsewhere in this Form 10-Q. Business Objects undertakes no
obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

# Overview

Business Objects develops, markets, and supports business intelligence software for client/server environments, intranets, extranets, and the internet. Using business intelligence, organizations can access, analyze, and
share corporate data for better decision making. Business intelligence software tools are designed to help companies turn data into useful business information, thereby leading to increased competitive advantage, new business opportunities, improved
customer service and corporate agility.

In view of our significant growth in recent years, we believe that period-to-period comparisons of our financial results are not necessarily meaningful and you
should not rely upon them as an indication of future performance.

-10-

---

Results of Operations

The following table sets forth certain items from our condensed consolidated statements of income
as a percentage of total revenues for the periods indicated:

|                                         | Three Months EndedSeptember 30 | Nine Months EndedSeptember 30
|---------------------------------------- | ------------------------------ | -----------------------------
|                                         | 2001                           |                              
|                                         |                                |                              
|Revenues:                                |                                |                              
|License fees                             | 55.7                           | %                            
|Services                                 | 44.3                           |                              
|                                         |                                |                              
|Total revenues                           | 100.0                          | %                            
|Cost of revenues:                        |                                |                              
|License fees                             | 0.5                            |                              
|Services                                 | 15.9                           |                              
|                                         |                                |                              
|Total cost of revenues                   | 16.4                           |                              
|                                         |                                |                              
|Gross margin                             | 83.6                           |                              
|Operating expenses:                      |                                |                              
|Sales and marketing                      | 50.8                           |                              
|Research and development                 | 13.6                           |                              
|General and administrative               | 5.1                            |                              
|Goodwill                                 | 1.1                            |                              
|                                         |                                |                              
|Total operating expenses                 | 70.6                           |                              
|                                         |                                |                              
|Income from operations                   | 13.0                           |                              
|Interest and other income, net           | 2.1                            |                              
|                                         |                                |                              
|Income before provision for income taxes | 15.1                           |                              
|Provision for income taxes               | (5.7                           | )                            
|                                         |                                |                              
|Net income                               | 9.4                            | %                            
|                                         |                                |                              
|Gross margin license                     | 99.0                           | %                            
|Gross margin services                    | 64.2                           | %                            

The following table shows the geographic distribution of our
revenues:

|              | Three Months Ended  September 30, | Nine months Ended  September 30,
|------------- | --------------------------------- | --------------------------------
|              | 2001                              |                                 
|              |                                   |                                 
|Europe        | 48.3                              | %                               
|North America | 43.5                              |                                 
|Rest of World | 8.2                               |                                 
|              |                                   |                                 
|Total         | 100.0                             | %                               
|              |                                   |                                 

Prior year amounts have been reclassified to conform to current year presentation.

-11-

---

Total Revenues.Total revenues were $99.2 million for the three months ended September 30, 2001, an increase of $13.2 million or 15% over the corresponding prior
year period. Total revenues for the nine months ended September 30, 2001 were $299.0 million, an increase of $55.8 million or 23% over the corresponding prior year period.

The Company operates
internationally, with a substantial portion of its business conducted in foreign currencies. As such, the Companys results are affected by year-over-year exchange rate fluctuations in the United States dollar relative to various European
currencies and to a lesser extent the Japanese yen and other foreign currencies.

License Fees.License fees were $55.3 million for the three months ended September 30, 2001, an increase
of $1.9 million or 3% over the corresponding prior year period. License fees for the nine months ended September 30, 2001 were $176.9 million, an increase of $25.3 million or 17% over the corresponding prior year period. The increase in license fees
was due to increased unit sales of our licensed products.

We anticipate that license fees, which represented approximately 56% of our total revenues for the three month period ended September 30, 2001 and 59% for the nine month period ended September 30, 2001, will continue to represent a majority of our revenue for the foreseeable future. It is expected that
the percentage of total revenues derived from license fees may decrease in the future as the growth in service revenues exceeds the growth in license revenues.

Services.Revenues from
services consist of maintenance, consulting, and training revenues. Revenues from services were $43.9 million for the three months ended September 30, 2001, an increase of $11.3 million or 35% over the corresponding prior year period. For the nine
months ended September 30, 2001, revenues from services were $122.1 million, an increase of $30.6 million or 33% over the corresponding prior year period. The increase in revenues from services was primarily due to increases in maintenance revenues
related to increases in our installed customer base, the renewal of existing support contracts, and to a lesser extent increases in consulting and training revenues. As market penetration by, and the number of, the Companys competitors
increase, the growth rate of our installed base and, consequently, the growth rate of our services revenues in the future may not be as high as growth rates achieved in the past.

Cost of License Fees.Cost of license fees consists primarily of materials, packaging, freight and third-party royalties. Cost of license fees as a percentage of license fees was 1% for all periods presented.

Cost
of Services. Cost of services consists of the cost of providing consulting, maintenance and training services. Cost of services was $15.7 million for the three months ended September 30, 2001, an increase of $2.6 million, or 20% over the
corresponding prior year period. Cost of services was $46.9 million for the nine months ended September 30, 2001, an increase of $8.3 million or 22% over the corresponding prior year period. The cost of services as a percentage of service revenue
was 36% and 40% for the three months ended September 30, 2001 and 2000 respectively and 38% and 42% for the nine months ended September 30, 2001 and 2000. The decrease as a percentage of related revenues was primarily due to improved productivity in
providing maintenance support, as well as improved productivity in providing consulting and

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training services. The increase in expenses in absolute dollars resulted from increased headcount necessary to support our service activities, and to a lesser extent increased
facilities expenses related to new facilities in the U.S. and the U.K. The Companys U.S. and U.K. facilities were relocated in April, 2001.

Operating Expenses

Sales and Marketing.Sales and marketing expenses consist primarily of salaries and commissions, advertising and promotional activities, and related facilities expenses. Sales and marketing expenses were
$50.4 million for the three months ended September 30, 2001, an increase of $9.3 million or 23% over the corresponding prior year period. Sales and marketing expenses were $146.9 million for the nine months ended September 30, 2001, an increase of
$27.1 million or 23% over the corresponding prior year period. Sales and marketing expenses, as a percentage of total revenues, were 51% and 48% for the three months ended September 30, 2001 and 2000 respectively. These
expenses were 49% of total revenues for the nine months ended September 30, 2001 and 2000. The increase as a percentage of total revenues for the three months ended September 30, 2001 and in absolute dollars for the three and nine months ended
September 30, 2001 was attributable to increased facilities expenses related to new facilities in France, the U.S. and the U.K. and the expansion of our sales and marketing organization. Sales and marketing expenses are expected to continue to
increase in absolute dollars but may vary as a percentage of revenues in the future.

Research and Development.Research and development expenses consist primarily of salaries and related
benefits, third party consultant fees, related facilities expenses and the amortization of intangible assets allocated to employment contingencies resulting from the acquisitions of Olap@Work, Inc. in April 2000 and Next Action Technology, Ltd. in
October 1999. Research and development expenses were $13.4 million for the three months ended September 30, 2001, an increase of $1.9 million, or 17% over the corresponding prior year period. Research and development expenses were $40.0 million for
the nine months ended September 30, 2001, an increase of $10.2 million or 34% over the corresponding prior year period. Research and development expenses as a percentage of total revenues were 14% and 13% for the three months ended September 30,
2001 and 2000 respectively, and were 13% and 12% for the nine months ended September 30, 2001 and 2000, respectively. The increase in research and development expenses both as a percentage of total revenues and in absolute dollars was primarily due
to increased staffing and associated support for software engineers as part of our ongoing operations and expansion into the analytical applications market. As of September 30, 2001 all research and development costs have
been expensed as incurred. Research and development expenses are expected to continue to increase in absolute dollars but may vary as a percentage of revenues in the future.

General and Administrative.General and administrative expenses consist primarily of salaries, related benefits, fees for professional services including legal and accounting services, and allowances for doubtful accounts. General and administrative expenses were
$5.1 million for the three months ended September 30, 2001, a decrease of $0.2 million from the same period in the prior year. General and administrative expenses were $17.9 million for the nine months ended September 30, 2001, an increase of $3.4
million or 23% over the corresponding prior year period. General and administrative expenses as a percentage of total revenues were 5% and 6% for the

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three months ended September 30, 2001 and 2000 respectively and 6% of total revenues for the nine months ended September 30, 2001 and 2000. The decrease in absolute dollars and
as a percentage of revenues for the three month period ended September 30, 2001 was due to a reduction in the allowance for doubtful accounts due to improvements in the accounts receivable aging partially offset by higher facilities and employees
costs. The increase in absolute dollars for the nine months ended September 30, 2001 was due to increased staffing to support our growth and increased facilities expenses related to new facilities in France and the U.S. General and administrative
expenses are expected to continue to increase in absolute dollars but may vary as a percentage of revenues in the future.

Amortization of Goodwill.Goodwill amortization expense was
$1.1 million for the three months ended September 30, 2001 and 2000, and goodwill amortization was $3.4 million and $3.2 million for the nine months ended September 30, 2001 and 2000, respectively. Goodwill amortization expense was approximately 1%
of total revenues for all periods presented. In general, goodwill is currently being amortized over a five-year period. The Company is investigating the impact, if any, on the results of its operations and its financial position from the
implementation of the Financial Accounting Standards Boards Statement of Financial Accounting Standard No. 141, Business Combinations and No. 142, Goodwill and Other Intangible Assets. Under FAS 142, goodwill and other
intangible assets with indefinite lives are no longer amortized but are reviewed at least annually for impairment. Separable intangible assets that are deemed to have a definite life will continue to be amortized over the estimated useful life.

Interest and Other Income, Net

Interest and other income, net included the following (in thousands):

|                                     | Three months ended September 30, |        | Nine months ended  September 30,
|------------------------------------ | -------------------------------- | ------ | --------------------------------
|                                     | 2001                             | 2000   |                                 
|                                     |                                  |        |                                 
|Net interest income                  | $2,217                           | $1,794 |                                 
|Other income (expense)               | (124)                            | 1,379  |                                 
|                                     |                                  |        |                                 
|Total interest and other income, net | $2,093                           | $3,173 |                                 
|                                     |                                  |        |                                 

Net interest income increased by $0.4 million or 24% and $1.8 million or 37% for the three and
nine month periods ended September 30, 2001 as compared to the corresponding prior year periods. The increase was due to an increase in invested cash partially offset by a decrease in the average effective interest rate. Cash and cash equivalents
totaled $221.4 million at September 30, 2001.

Other income was comprised of net foreign exchange gains and losses and payments, net of attorney fees, received from Brio Technology, Inc. (Brio) in
settlement of patent litigation. Due to inherent uncertainties with respect to Brio making the remaining quarterly payments under the settlement, the Company is recognizing the settlement under the cost-recovery method. The settlement was for $10.0
million payable quarterly in $1.0 million payments beginning September 30, 1999. The Company received and recognized $0.5 million and $1.0 million from

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Brio under the settlement during the three months ended September 30, 2001 and 2000, respectively. The Company received and recognized $2.0 million from Brio under the
settlement during the nine months ended September 30, 2001 compared to $3.0 million received during the nine months ended September 30, 2000. As of September 30, 2001, the total still due from Brio under the terms of the settlement was $2.0 million.

# Income Taxes

The Companys effective tax rate was 38% and 39% respectively for the three and nine month periods ended September 30,
2001 compared to 39% and 40% respectively for the same periods in 2000. The 2001 decrease in the effective rate is primarily due to the reduction in the French statutory rate. The Company provides for income taxes for each
interim period based on the estimated annual effective tax rate for the year.

Liquidity and Capital Resources

Cash and cash equivalents
totaled $221.4 million as of September 30, 2001, an increase of $21.8 million from December 31, 2000. Net cash provided by operating activities for the nine months ended September 30, 2001 was $46.9 million as compared to $58.4 million for the same
period in 2000. The decrease as compared to the prior period was primarily due to a decrease in accounts payable and other current liabilities partially offset by a decrease in accounts receivable, higher net income and non-cash charges for
goodwill.

Cash used by investing activities totaled $24.2 million and $30.3 million for the first nine months of 2001 and 2000, respectively. Investing activities for the nine months ended September
30, 2001 included $22.9 million in property and equipment purchases primarily related to leasehold improvements and property and equipment additions associated with the relocation of facilities in the U.S. and the U.K., as well as a minority
interest purchase of $1.3 million of equity in a private company. Investing activities during the nine months ended September 30, 2000 included $18.2 million in business acquisitions and $12.0 million in property and equipment purchases.

Cash provided by financing activities totaled $3.2 million for the first nine months of 2001. Cash used by financing activities totaled $1.5 million for the first nine months of 2000. Financing activities for
the nine months ended September 30, 2001 generated cash of $8.5 million from the issuance of shares under employee stock option and purchase plans and $3.7 million in the release of restricted cash, offset partially by a $4.4 million repurchase of
ordinary shares pursuant to the Companys stock repurchase plan which will be held as treasury shares, and a $4.6 million reduction in notes payable. Financing activities for the nine months ended September 30, 2000 used cash for the transfer
of $12.5 million into restricted cash accounts and the repayment of $6.6 million in notes payable. These uses of cash were partially offset from cash flows provided by the issuance of shares totaling $12.6 million under employee stock option and
purchase plans and $5.0 million from the issuance of notes payable.

The impact of the weakening of the Euro and the British Pound versus the U.S. Dollar caused a reduction of cash and cash
equivalents when translated into U.S. Dollars of $4.1 million and $19.1 million for the nine months ended September 30, 2001 and 2000, respectively.

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Management believes that cash from operations together with existing cash and cash equivalents will be sufficient to meet the companys cash requirements through at least
the next 12 months.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement No. 141,
Business Combinations (FAS 141) and No. 142, Goodwill and Other Intangible Assets. (FAS 142). FAS 141 is effective for all business combinations entered into subsequent to July 1, 2001 and eliminates the pooling-of-interests
method of accounting for business combinations. It includes new criteria to recognize intangible assets separately from goodwill. Under FAS 142, goodwill and other intangible assets with indefinite lives are no longer amortized but are reviewed at
least annually for impairment. Separable intangible assets that are deemed to have a definite life will continue to be amortized over the estimated useful life. FAS 142 is effective with respect to the nonamortization of goodwill and certain
intangible assets on January 1, 2002 for amounts currently recorded on the Companys balance sheet and will apply to any goodwill and certain intangible assets acquired after September 30, 2001. The Company is investigating the impact, if any,
on the results of its operations and its financial position from the implementation of FAS 141 and 142.

Stock Option Exchange Program

On May
16, 2001, the Company announced a voluntary stock option exchange program for its eligible employees. This program included two separate offers: one to France based employees (the French program) and the other to international employees
including employees in the United States (the International program). Pursuant to the terms and conditions of each program, eligible employees were given the opportunity to renounce the right to the benefit of all outstanding stock
options granted on or after January 1, 2000 under the Business Objects S.A. 1999 Stock Option Plan, as amended, in exchange for an equal number of new options to be granted on or after December 18, 2001. If an employee renounced the right to the
benefit of any one option, the employee was required to renounce the right to the benefit of all options granted to the employee during the six month period prior to the cancellation of any options. The offer expired June 14, 2001. A total of 140
eligible employees elected to participate in the French program and these employees tendered a total of 328,537 options. A total of 301 eligible employees elected to participate in the International program and these employees tendered a total of
1,083,554 options. As a result of the two separate offers, an aggregate of 441 eligible employees tendered an aggregate of 1,412,091 options in return for the promise to grant new options on or after December 18, 2001.

The exercise price of the new options may not be less than the higher of (i)100% of the closing price of our ordinary shares as reported on the Premier Marché of Euro next Paris S.A. (the Premier Marché)
on the last trading day before the date of grant, or (ii) 80% of the average of the closing prices of our ordinary shares on the Premier Marché over the twenty trading days preceding the grant date. In addition, for eligible employees who are
Italy-based employees, the exercise price per share may not be less than 100% of the average of the closing prices of our ordinary shares on the Premier Marché over the thirty trading days preceding the grant date.

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For the new options granted pursuant to the terms and conditions of the International program (approximately 80% of the aggregate number of new options to be granted under the
French and International programs), each new option will retain the vesting schedule of the old option it replaces. For the new options granted pursuant to the terms and conditions of the French program (approximately 20% of the aggregate number of
the new options to be granted under the French and International programs), each new option will substantially retain the vesting schedule of the old option it replaces, except that the new options will not become excercisable until one year
following the date of grant of the new option.

The programs were not available to (i) members of our extended executive committee, (ii) employees with general management and/or management
responsibility for multiple countries, (iii) employees with general sales management responsibility for named strategically important countries, (iv) employees responsible for sales representing 10% or more of our consolidated budget
revenues for fiscal 2001, (v) former employees and (vi) any of our employees who are resident in Belgium or Switzerland. In addition, new options will not be granted to individuals who are not employees of Business Objects S.A. or one of our
affiliates as of the grant date of the new options.

RISK FACTORS

You should carefully consider the risks and uncertainties described below
before making an investment decision. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial also may become important factors that may adversely affect our company.

Risks related to our business

We target our products to one market and if sales of our products in this market decline, our operating results will be seriously
harmed.

We generate substantially all of our revenues from licensing and service fees generated from the sale of our products in the business intelligence software market, and we expect to
continue to do so in the future. Accordingly, our future revenues and profits will depend significantly on our ability to further penetrate the business intelligence software market. If we are not successful in selling our products in our targeted
market due to competitive pressures, technological advances by others or otherwise, our operating results would suffer. The United States (U.S.) and Europe are two of the largest geographic markets for our products and services. A softening of
demand for business intelligence software caused by a weakening of the economy in these geographic markets may result in decreased revenues and has resulted and may continue to result in lower revenue growth rates and operating margins. In addition,
recent terrorist attacks upon the U.S. have added to or exacerbated economic, political and other uncertainties, which may increase the likelihood that customers will unexpectedly delay, cancel or reduce the size of orders, resulting in lowered
revenues and operating margins.

Our quarterly operating results are subject to fluctuations, which may affect our stock price.

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Historically, our quarterly operating results have varied substantially from quarter to quarter, and we anticipate this pattern to continue. This is principally because our
license fees are variable from quarter to quarter, while a high percentage of our operating expenses are relatively fixed, and are based on anticipated levels of revenues. In addition, we expect our expenses to increase as our business grows. If
revenues earned in any particular quarter fall short of anticipated revenue levels, our quarterly operating results would be significantly harmed.

While the variability of our license fees is
partially due to factors that would influence the quarterly results of any company, our business is particularly susceptible to quarterly variations because:

- We typically receive a substantial
amount of our revenues in the last weeks of the last month of a quarter, rather then evenly throughout the quarter.
- Our strongest quarter each year is typically our fourth quarter, as
our customers often wait for the end of their annual budget cycle before deciding whether to purchase new software. Consequently, our revenues are generally lower in our first quarter. In addition, our third quarter is a relatively slow quarter due
to lower economic activity throughout Europe during the summer months.
- Customers may delay purchasing decisions in anticipation of our new products or product enhancements or platforms
or announced pricing changes by us or our competitors.
- We partly depend on large orders which may take several months to finalize. A delay in finalizing a large order may result in the
realization of license fees being postponed from one quarter to the next.
- Our revenues are also sensitive to the timing of our competitors offers of new products that successfully
compete with ours on the basis of functionality, price or otherwise.

As a result of the above, quarter to quarter comparisons of our revenues and operating results may not be meaningful and
you should not rely on them as indicative of our future performance.

Our stock price is susceptible to our operating results and to stock market fluctuations.

In future quarters, our operating results may be below the expectations of public market analysts and investors, and the price of our shares may fall. In addition, the stock markets in the United States and France have
experienced significant price and volume fluctuations, which have particularly affected the market prices of many software companies and which have often been unrelated to the operating performance of these companies. These market fluctuations could
affect our stock price.

Our software may have defects and errors, which may lead to a loss of revenue or product liability claims.

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BusinessObjects and its platform for internetbased installations, WebIntelligence, are internally complex and occasionally contain defects or errors, especially when first
introduced or when new versions or enhancements are released. Despite extensive testing, we may not detect errors in our new products, platforms or product enhancements, until after we have commenced commercial shipments. If defects and errors are
discovered in our products, platforms or product enhancements after commercial release:

- potential customers may delay or forego purchases;
- our reputation in the marketplace may be damaged;
- we may incur additional service and warranty costs; and
- we may have to divert additional development resources to correct the defects and errors.

If any or all of the foregoing occur, we may lose revenues or incur higher
operating expenses and lose market share, any of which could severely harm our financial condition and operating results.

We may have difficulties providing and managing the increased technical
stability, performance and support requirements of an evolving market, which could cause a decline in our revenues and an increase in our expenses.

We are increasingly focusing our selling
efforts on larger, enterprise-wide deployments of our products. Many of these deployments are on a Unix platform, and require greater technical stability, performance and support than we have typically had to provide in the past. We may have
difficulty providing and managing these increased technical requirements. Any such difficulty could cause us to lose existing customers, limit us to smaller deployments and cause us to expand our research and development and technical support costs
which could cause a decline in our revenues and an increase in our expenses.

The protection of our intellectual property is crucial to our business, and if third parties use our intellectual
property without our consent, it could damage our business.

Our success depends in part on our ability to protect our proprietary rights in our intellectual property. Despite precautions we
take to protect these rights, unauthorized third parties could copy aspects of our current or future software and platforms or obtain and use information that we regard as proprietary. Policing unauthorized use of software is difficult and some
foreign laws do not protect our proprietary rights to the same extent as in the United States or France.

In addition, although our name, together with our logo, is registered as a trademark in
France, the United States, and a number of other countries, we may have difficulty asserting our ownership rights in the name Business Objects as some jurisdictions consider the name Business Objects to be generic or
descriptive in nature. As a result, we may be unable to effectively police unauthorized use of our name or otherwise prevent the name of our software products from becoming a part of the public domain.

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To protect our proprietary rights, we may become involved in litigation, which could be costly and negatively impact our operating results. For example, we settled a patent
infringement claim in our favor against Brio Technology, Inc. in 1999, and are currently involved with patent infringement claims against Cognos, Inc. and MicroStrategy Inc. (see Item 1. Legal Proceedings). Litigating claims related to our
proprietary rights can be very expensive in terms of management time and resources, which could cause our financial condition and operating results to suffer.

Third parties could
assert that our technology infringes their proprietary rights, which could adversely affect our ability to distribute our products and result in costly litigation.

We do not believe that our
products infringe the proprietary rights of any third parties. However, on October 30, 2001, an action for alleged patent infringement was filed in the United States District Court for the Eastern District of Virginia against us and our subsidiary,
Business Objects Americas by MicroStrategy Inc. The complaint alleges that the our software products, Broadcast Agent, Infoview and Broadcast Agent Publisher, infringe MicroStrategy's United States Patent No. 6,279,033 entitled "System and
Method for Asynchronous Control of Report Generation Using a Network Interface" and United States Patent No. 6,260,050 entitled "System and Method of Adapting Automatic Output of Service Related OLAP Reports to Disparate Output
Devices". The complaint seeks relief in the form of an injunction against us and unspecified damages. We have been recently served and we are currently evaluating the merits of the complaint. However, management's current assessment is that our
products do not infringe. If successful, a claim of infringement against us and our inability to license the infringed or similar technology on commercially reasonable terms could have a material adverse effect on our business, operating results,
and financial condition. Also in July 1999, Brio Technology Inc. filed an action alleging that we infringed upon one of its patents by selling our reporting functionality. Brio Technology dismissed this lawsuit as part of a settlement announced in
September 1999. We believe that software products offered in our target markets increasingly will be subject to infringement claims as the number of products and competitors in our industry segment grows and product functionalities begin to overlap.

The potential effects on our business operations resulting from any third party infringement claim may include the following:

- we could be
forced to cease selling our products;
- we would be forced to commit management resources to resolve the claim;
- we may incur
substantial litigation costs in defense of the claim;
- we may be required to indemnify our customers;
- we may have to expand
significant development resources to redesign our products as a result of these claims; and
- we may be required to enter into royalty and licensing agreements with a third party bringing
an infringement claim against us, and these agreements may contain terms that are unfavorable to us.

We depend on strategic relationships and business alliances for continued growth of
our business

Our development, marketing, and distribution strategies rely increasingly on our ability to form long-term strategic relationships with major vendors, many of who are
substantially larger than Business Objects. These business relationships often consist of joint marketing programs or partnerships with original end manufacturer or value added resellers. Although certain aspects of some of these relationships are
contractual in nature, many important aspects of these relationships depend on the continued cooperation of each party with us. Divergence in strategy, change in focus, competitive product offerings or contract defaults by any of these companies may
interfere with our

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ability to develop, market, sell, or support our products, which in turn could harm our business. In addition, one or more of these companies may use the information they gain
from their relationship with us to develop or market competing products.

The loss of our rights to use software licensed to us by third parties could harm our business.

In order to provide a complete product suite, we occasionally license software from third parties, and sublicense this software to our customers. In addition, we license software programs from third
parties and incorporate these programs into our own software products. By utilizing third party software in our business, we incur risks that are not associated with developing software in-house. For example, these third party providers may
discontinue or alter their operations, terminate their relationship with us, or generally become unable to fulfill their obligations to us. If any of these circumstances were to occur, we may be forced to seek alternative technology which may not be
available on commercially reasonable terms. In the future, we may be forced to obtain additional third party software licenses to enhance our product offerings and compete more effectively. We may not be able to obtain and maintain licensing rights
to needed technology on commercially reasonable terms, which would harm our business and operating results.

Our executive officers and key personnel are critical to our business; we may not be
able to recruit and retain the personnel we need to succeed.

Our success depends to a significant extent upon a number of key management and technical personnel, including Bernard Liautaud,
our chief executive officer and co-founder, the loss of whom could adversely affect our business. The loss of the services of other key personnel or our inability to attract and retain highly skilled technical, management, sales and marketing
personnel could also harm our business. Competition for such personnel in the computer software industry is intense, and we may be unable to successfully attract and retain such personnel.

We
may have difficulty managing our growth.

Our business has grown rapidly in recent years. If we continue to grow at the same pace, this growth may place a significant strain on our management
and operations. Our future operating results depend in part on the ability of our officers and key employees to continue to implement and improve our operational and financial control systems and to hire, expand, train and manage our employees. If
we are unable to manage our growth effectively, our financial condition and operating results could suffer.

We have multinational operations that are subject to risks inherent in international
operations, including currency exchange rate fluctuations.

Because we conduct our business throughout the world, we are subject to a number of risks inherent in international operations,
including compliance with various foreign laws, regulations and tax structures, and longer accounts receivable payment cycles outside of the United States.

In addition, we conduct a significant
portion of our business in currencies other than the U.S. dollar, the currency in which we report our financial statements. Historically, we have generated a significant portion of our revenues and incurred a significant portion of our expenses in
French francs, British pounds sterling, Japanese yen and Italian lira, and we expect to generate a

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significant portion of our revenues and expenses in the Euro in the future. As a result, our operating results expressed in U.S. dollars have been in the past, and may be in the
future, adversely impacted by currency exchange rate fluctuations on the U.S. dollar value of foreign currency-denominated revenues and expenses. As of September 30, 2001, we were not engaged in a foreign currency hedging program to cover our
currency transaction or translation exposure.

Risks related to our industry

Our markets are highly competitive and competition could
harm our ability to sell products and services and reduce our market share.

Competition could seriously harm our ability to sell software and services at prices and terms favorable to us. If
we cannot compete effectively, we may lose market share. Some of our competitors have been in business longer than us and have significantly greater financial, technical, sales, marketing and other resources than we do. In addition, some of our
competitors enjoy greater name recognition and a larger installed customer base than we do. Moreover, some of our competitors, particularly companies that offer relational database management software systems and enterprise resource planning
software systems, have wellestablished relationships with some of our existing and targeted customers.

In the future, any of our competitors could introduce products with more
features at lower prices. Some of these companies could also bundle existing or new products, with other more established products that they offer, and compete more effectively against our products. Some of these competitors have already, or may in
the future, provide their products or components of their products to customers at no cost to the customer to gain market share. Because our products are specifically designed and targeted to the business intelligence software market, we may lose
sales to competitors offering a broader range of products. Furthermore, other companies larger than us could enter the market through internal expansion or by strategically aligning themselves with one of our current competitors and provide products
that cost less than our products. We believe that the business intelligence software tools market will continue to grow and develop, and that more and more large companies may find it a desirable market in which to compete. To the extent that we are
unable to effectively compete against our current and future competitors, as a result of some or all of the factors stated above, our financial condition and operating results would suffer.

The
software markets that we target are subject to rapid technological change and new product introductions.

The market for business intelligence software tools is characterized by:

- rapid technological advances;
- changes in customer requirements; and
- frequent
new product introductions and enhancements.

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To be successful, we must develop new products, platforms and enhancements to our existing products that keep pace with technological developments, changing industry standards
and the increasingly sophisticated requirements of our customers. If we are unable to respond quickly and successfully to these developments and changes, we may lose our competitive position. In addition, even if we are able to develop new products,
platforms or enhancements to our existing products, these products, platforms and product enhancements may not be accepted in the marketplace. Our customers may defer or forego purchases of our existing products if we do not adequately time the
introduction or the announcement of new products or enhancement to our existing products, or if our competitors introduce or announce new products, platforms and product enhancements. Any of these factors could severely harm our business, financial
condition and operating results.

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# Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discusses our exposure to market risk related to
changes in interest rates, equity prices and foreign currency exchange rates. This discussion contains forwardlooking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of
factors including those set forth in the Risk Factors section.

As of September 30, 2001, all of our cash and cash equivalents were classified as available-for-sale. The principal portion of our
investments are not subject to interest rate risk; however, declines in interest rates over time will reduce our interest income. We do not have any investments in equity or debt securities traded in the public markets. Therefore, we do not
currently have any direct equity price risk.

We conduct a significant portion of our business in currencies other than the U.S. dollar, the currency in which we report our financial statements.
Assets and liabilities of our subsidiaries are translated into U.S. dollars at exchange rates in effect as of the applicable balance sheet date, and any resulting translation adjustments are included as an adjustment to shareholders equity.
Revenues and expenses generated from these subsidiaries are translated at average exchange rates during the quarter the transactions occur. Gains and losses from these currency transactions are included in net earnings. Historically, we have
generated a significant portion of our revenues and incurred a significant portion of our expenses in French francs, British pounds sterling, Japanese yen and Italian lira and we expect to generate a significant portion of our revenues and expenses
in the Euro in the future. As a result, our operating results have been in the past, and may be in the future, adversely impacted by currency exchange rate fluctuations on the U.S. dollar value of foreign currencydenominated revenues and
expenses. We cannot predict the effect of exchange rate fluctuations upon our future operating results. As of September 30, 2001, we were not engaged in a foreign currency hedging program to cover our currency transaction or translation
exposure.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings

MicroStrategy
Incorporated (MicroStrategy): On October 17, 2001, the Company filed a lawsuit in the United States District Court for the Northern District of California against MicroStrategy for alleged patent infringement. The lawsuit alleges that MicroStrategy
infringes on the Companys United States Patent No. 5,555,403 by making, using, offering to sell and selling its product currently known as MicroStrategy Version 7.0. The Companys complaint requests that the defendants be enjoined from
further infringing the patent and seeks an as yet undetermined amount of damages.

Cognos, Inc. and Cognos Corporation (Cognos): On May 5, 2000, the Company filed a lawsuit in the United States
District Court for the Northern District of California against Cognos for alleged patent infringement. The lawsuit alleges that Cognos infringes on the Companys United States Patent No. 5,555,403 by making, using, offering to sell and selling
its product known as Impromptu. The Companys complaint requests that the defendants be enjoined from further infringing the patent and seeks an as yet undetermined amount of damages. On September 7, 2001, the United Stated District Court
denied Cognos motion for a partial summary judgment where Cognos was seeking to invalidate the Companys United States Patent No. 5,555,403. The Court determined that the case should proceed to trial and set a date of May 20,
2002.

On October 30, 2001, an action for alleged patent infringement was filed in the United States District Court for the Eastern District of Virginia against the Company and its subsidiary,
Business Objects Americas by MicroStrategy Inc. The complaint alleges that the Company's software products, Broadcast Agent, Infoview and Broadcast Agent Publisher, infringe MicroStrategy's United States Patent No. 6,279,033 entitled "System
and Method for Asynchronous Control of Report Generation Using a Network Interface" and United States Patent No. 6,260,050 entitled "System and Method of Adapting Automatic Output of Service Related OLAP Reports to Disparate Output
Devices". The complaint seeks relief in the form of an injunction against the Company and unspecified damages. The Company has been recently served and it is currently evaluating the merits of the complaint. However, management's current
assessment is that the Company's products do not infringe. If successful, a claim of infringement against the Company and its inability to license the infringed or similar technology on commercially reasonable terms could have a material adverse
effect on its business, operating results, and financial condition.

Item 6. Exhibits and Reports on Form 8-K

a) (3) (ii) UK Facility Leaseb) Reports on Form 8-K: None

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###### 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.

Business Objects S.A.

|Date: November 13, 2001 | By: | /s/ Bernard Liautaud                                                                                    
|----------------------- | --- | --------------------------------------------------------------------------------------------------------
|                        |     | Bernard Liautaud Chairman of the Board and Chief Executive Officer                                      
|                        |     |                                                                                                         
|Date: November 13, 2001 | By: | /s/ Clifton T. Weatherford                                                                              
|                        |     | Clifton T. Weatherford Chief Financial Officer and Executive Vice President,  Finance and Administration







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