<PAGE>

================================================================================

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

                                   FORM 10-Q


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

                 For the quarterly period ended March 31, 2001

                                      or

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

             For the transition period from _________ to ________



                        Commission File Number 0-24720

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

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

          157/159 Rue Anatole France, 92300 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 April 30, 2001 was 61,136,951 Ordinary Shares of Euro 0.10
nominal value, including 14,617,120 American Depositary Shares (as evidenced by
American Depositary Receipts), each corresponding to one Ordinary Share.


================================================================================
<PAGE>

                             Business Objects S.A.
                                     Index




PART I.  FINANCIAL INFORMATION                                         Page

Item 1.   Unaudited Consolidated Financial Statements:

          Condensed Consolidated Balance Sheets at
          March 31, 2001 and December 31, 2000                           3

          Condensed Consolidated Statements of Income for the
          three months ended March 31, 2001 and 2000                     4

          Condensed Consolidated Statements of Cash Flows for the
          three months ended March 31, 2001 and 2000                     5

          Notes to Condensed Consolidated Financial Statements           6

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

Item 3.   Quantitative and Qualitative Disclosures about Market Risk    22

PART II.  OTHER INFORMATION                                             23

SIGNATURES                                                              25


                                      -2-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                         March 31, 2001     December 31, 2000
                                                                                         --------------     -----------------
                                                                                          (Unaudited)             (Note)
<S>                                                                                      <C>                <C>
ASSETS
Current assets:
     Cash and cash equivalents                                                                 $219,521              $199,581
     Restricted cash                                                                              8,735                 9,020
     Accounts receivable, net                                                                    69,592                88,737
     Other current assets                                                                        20,283                20,892
                                                                                         --------------     -----------------
          Total current assets                                                                  318,131               318,230

Goodwill and other intangible assets, net                                                        19,140                21,582
Property and equipment, net                                                                      28,724                21,641
Restricted cash- long term                                                                        3,333                 3,333
Deposits and other assets                                                                         3,881                 4,228
                                                                                         --------------     -----------------
          Total assets                                                                         $373,209              $369,014
                                                                                         ==============     =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                                          $ 18,833              $ 22,503
     Accrued payroll and related expenses                                                        25,888                30,680
     Deferred revenue                                                                            53,019                49,490
     Other current liabilities                                                                   54,138                51,118
                                                                                         --------------     -----------------
           Total current liabilities                                                            151,878               153,791

Notes payable--long term                                                                          4,338                 4,288

Shareholders' equity
     Ordinary shares, Euro 0.10 nominal value ($0.09 U.S. as of March 31, 2001):
     Authorized 82,967,476 at March 31, 2001 and  83,086 at December 31, 2000;
     Issued and outstanding 61,048 and 60,584 at March 31, 2001and 2000, respectively             6,512                 6,471
     Additional paid-in capital                                                                 142,980               138,390
     Treasury shares, 575 shares at March 31, 2001 and December 31, 2000                         (4,611)               (4,611)
     Retained earnings                                                                          105,073                94,577
     Accumulated other comprehensive loss                                                       (32,961)              (23,892)
                                                                                         --------------     -----------------
Total shareholders' equity                                                                      216,993               210,935
                                                                                         --------------     -----------------
          Total liabilities and shareholders' equity                                           $373,209              $369,014
                                                                                         ==============     =================
</TABLE>

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

    See accompanying notes to Condensed Consolidated Financial Statements.

                                      -3-
<PAGE>

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

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                                March 31
                                                         2001              2000
                                                   ---------------    --------------
<S>                                                <C>                <C>
Revenues:
     License fees                                          $60,601           $45,046
     Services                                               37,677            27,536
                                                   ---------------    --------------

          Total revenues                                    98,278            72,582
Cost of revenues:
     License fees                                              602               449
     Services                                               15,428            11,798
                                                   ---------------    --------------
          Total cost of revenues                            16,030            12,247
                                                   ---------------    --------------
Gross margin                                                82,248            60,335
Operating expenses:
     Sales and marketing                                    47,987            37,384
     Research and development                               12,993             8,179
     General and administrative                              5,773             4,602
     Goodwill amortization                                   1,132               989
                                                   ---------------    --------------
          Total operating expenses                          67,885            51,154
                                                   ---------------    --------------
Income from operations                                      14,363             9,181
Interest and other income, net                               2,843             2,461
                                                   ---------------    --------------
Income before provision for income taxes                    17,206            11,642
Provision for income taxes                                  (6,710)           (4,657)
                                                   ---------------    --------------
Net income                                                 $10,496           $ 6,985
                                                   ===============    ==============

Net income per ADS and share- basic                          $0.17             $0.12
                                                   ===============    ==============

ADS and shares used in computing net income per
 ADS & per share- basic                                     60,815            58,920
                                                   ===============    ==============
Net income per ADS and share- diluted                        $0.16             $0.11
                                                   ===============    ==============

ADS and shares and common share equivalents used
 in computing net income per ADS & per share-
 diluted                                                    64,884            65,850
                                                   ===============    ==============
</TABLE>

    See accompanying notes to Condensed Consolidated Financial Statements.

                                      -4-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                           March 31
                                                                                    2001               2000
                                                                               --------------     --------------
<S>                                                                            <C>                <C>
Cash flows from operating activities:
 Net income                                                                          $ 10,496           $  6,985
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                                                        2,448              2,116
   Amortization of goodwill and other intangible assets                                 2,078              1,378
   Deferred income taxes                                                                  (19)                (2)
   Changes in operating assets and liabilities:
    Accounts receivable, net                                                           15,224                 24
    Current and other assets                                                              279             (2,862)
    Accounts payable                                                                   (2,684)             4,453
    Accrued payroll and related expenses                                               (3,607)            (3,908)
    Deferred revenue                                                                    5,247              2,981
    Other current  liabilities                                                          4,652              5,515
                                                                               --------------     --------------
 Net cash provided by operating activities                                             34,114             16,680

 Cash flows from investing activities:
 Purchases of property and equipment                                                  (10,372)            (3,074)
 Business acquisitions, net of cash acquired                                                -               (679)
                                                                               --------------     --------------
 Net cash used for investing activities                                               (10,372)            (3,753)

 Cash flows from financing activities:
 Issuance of shares                                                                     4,631              6,193
 Release of restricted cash                                                               350                  -
 Repayment of notes payable                                                              (240)                 -
                                                                               --------------     --------------
 Net cash provided by financing activities                                              4,741              6,193

 Effect of foreign exchange rate changes on cash,
  and cash equivalents                                                                 (8,543)            (6,871)
                                                                               --------------     --------------
 Net increase  in cash and cash equivalents                                            19,940             12,249
 Cash and cash equivalents at the beginning of the period                             199,581            176,233
                                                                               --------------     --------------

 Cash and cash equivalents at the end of the period                                  $219,521           $188,482
                                                                               ==============     ==============
</TABLE>

    See accompanying notes to Condensed Consolidated Financial Statements.

                                      -5-
<PAGE>

                             Business Objects S.A.
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 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 period ended March 31, 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 or 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 $4,030,000 at March 31, 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 contract; 2) bundled license, 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 of
    fair value for maintenance exists. There is no right of return or price
    protection for sales to

                                      -6-
<PAGE>

    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-
<PAGE>

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):

<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                                     March 31,
                                                               2001            2000
                                                           -----------     -----------
       <S>                                                 <C>             <C>
       Numerator:
         Net income......................................  $    10,496     $     6,985
                                                           ===========     ===========

       Denominator:
         Basic weighted average ADSs and shares
         outstanding.....................................       60,815          58,920
                                                           -----------     -----------
         Incremental ordinary shares attributable to
         shares issuable under employee stock plans and
         warrants........................................        4,069           6,930
                                                           -----------     -----------

         Diluted weighted average ADS and shares
         outstanding.....................................       64,884          65,850
                                                           ===========     ===========

         Net income per ADS and per share--basic.........  $      0.17     $      0.12
                                                           ===========     ===========

         Net income per ADS and per share--diluted.......  $      0.16     $      0.11
                                                           ===========     ===========
</TABLE>

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):

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                 March  31,
                                                               2001           2000
                                                           -----------     -----------
<S>                                                        <C>             <C>
Net income                                                 $    10,496     $     6,985
Change in cumulative translation adjustment                     (9,069)         (6,713)
                                                           -----------     -----------
Total comprehensive income                                 $     1,427     $       272
                                                           ===========     ===========
</TABLE>

                                      -8-
<PAGE>

7.  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.

                                      -9-
<PAGE>

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

General

Business Objects develops, markets, and supports e-business intelligence
software for client/server environments, intranets, extranets, and the internet.
Using e-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-
<PAGE>

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:

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                March 31,
                                                        2001                2000
                                                 -----------------     ---------------
<S>                                              <C>                   <C>
Revenues:
  License fees..............................                  61.7%               62.1%
  Services..................................                  38.3                37.9
                                                 -----------------     ---------------
     Total revenue..........................                 100.0               100.0
                                                 -----------------     ---------------
Cost of revenues:
  License fees..............................                   0.6                 0.6
  Services..................................                  15.7                16.3
                                                 -----------------     ---------------
     Total cost of revenues.................                  16.3                16.9
                                                 -----------------     ---------------
Gross margin................................                  83.7                83.1
                                                 -----------------     ---------------
Operating expenses:
  Sales and marketing.......................                  48.8                51.5
  Research and development..................                  13.2                11.3
  General and administrative................                   5.9                 6.3
  Goodwill amortization.....................                   1.2                 1.4
                                                 -----------------     ---------------
     Total operating expenses ..............                  69.1                70.5
                                                 -----------------     ---------------
Income from operations......................                  14.6                12.6
Interest and other income, net..............                   2.9                 3.4
                                                 -----------------     ---------------
Income before provision for income taxes....                  17.5                16.0
Provision for income taxes..................                  (6.8)               (6.4)
                                                 -----------------     ---------------
Net income..................................                  10.7%                9.6%
                                                 =================     ===============
Gross margin
  License fees..............................                  99.0%               99.0%
  Services..................................                  59.1%               57.2%
</TABLE>

     The following table sets forth the geographic source of our revenues:

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                March 31,
                                                       2001                  2000
                                                 -----------------      --------------
<S>                                              <C>                    <C>
Europe                                                          55%                 62%
North America                                                   35%                 30%
Rest of World                                                   10%                  8%
                                                 -----------------      --------------
      Total                                                    100%                100%
                                                 =================      ==============
</TABLE>

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

                                      -11-
<PAGE>

Total Revenue. The Company's total revenues increased $25.7 million, or 35%
during the three months ended March 31, 2001 to $98.3 million from $72.6 million
for the three months ended March 31, 2000.

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 of the United States dollar relative
to various European currencies, and to a lesser extent, the Japanese yen and
other foreign currencies.

License Fees. Revenues from license fees increased $15.6 million, or 35% during
the three months ended March 31, 2001 to $60.6 million from $45.0 million for
the three months ended March 31, 2000. The increase in license fees was due to
increased unit sales of our licensed products in all geographic regions.

We anticipate that license fees, which represented approximately 62% of our
total revenues for the three month periods ended March 31, 2001 and 2000, 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. In addition, we expect that the market penetration by, and
number of, our competitors will increase, and as a result, the growth rate in
our license fees in the future may not be as high as the growth rate in such
license fees achieved in the past.

Services. Revenues from services consist of maintenance, consulting, and
training revenues. Revenues from services increased $10.1 million, or 37% during
the three months ended March 31, 2001 to $37.7 million from $27.6 million for
the three months ended March 31, 2000. The increase in revenues from services
was primarily due to increases in maintenance revenues related to increases in
our installed customer base and the renewal of existing support contracts,
increases in consulting revenues, and to a lesser extent, increases in training
revenues. As market penetration by, and the number of, competitors increase, the
growth rate of our installed base and, consequently, the growth rate of our
services revenues 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 remained
constant at 1% as a percent of license fee revenues for the three month periods
ending March 31, 2001 and 2000.

Cost of Services. Cost of services, which consist of the cost of providing
consulting, training and maintenance, increased $3.6 million, or 31% during the
three months ended March 31, 2001 to $15.4 million from $11.8 million for the
three months ended March 31, 2000. Cost of services as a percent of service
revenue was 40.9% and 42.8% for the three months ended March 31, 2001

                                      -12-
<PAGE>

and 2000, respectively. The decrease as a percent of the related revenues was
primarily due to improved productivity in providing maintenance support, offset
by higher cost of providing consulting services. The increase in expenses in
absolute dollars resulted from increased headcount necessary to support our
service activities and increased subcontracting of consulting and training
activities.

Operating Expenses

Sales and Marketing. Sales and marketing expenses consist primarily of salaries
and commissions, together with amounts paid for advertising and product
promotion activities, and related facilities costs. Sales and marketing expenses
increased $10.6 million, or 28% during the three months ended March 31, 2001 to
$48.0 million from $37.4 million for the three months ended March 31, 2000.
Sales and marketing expenses as a percent of total revenues was 48.8% and 51.5%
for the quarters ended March 31, 2001 and 2000, respectively. The decrease as a
percent of total revenues was primarily due to improved productivity in the
sales and marketing group. The increase in sales and marketing expenses in
absolute dollars was attributable to 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 percent of revenues in the future.

Research and Development. Research and development expenses consist primarily of
salaries, related benefits, third party consultant fees, related facilities
expenses and 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 increased $4.8 million, or 59% during the three months ended March 31,
2001 to $13.0 million from $8.2 million for the three months ended March 31,
2000. Research and development expenses as a percent of total revenues were
13.2% and 11.3% for the quarters ended March 31, 2001 and 2000, respectively.
The increase in research and development expenses both as a percent of total
revenues and in absolute dollars is due to increased staffing and associated
support for software engineers as part of our ongoing operations, our expansion
into the analytical applications market and, to a lesser extent, the
amortization of intangible assets and other related costs associated with the
continued operations of Olap@Work, Inc., including staffing and facilities. As
of March 31, 2001 and 2000, we have not capitalized any software development
costs and 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 percent 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 increased $1.2 million, or 2.5% during the
three months ended March 31, 2001 to $5.8 million from $4.6 million for the
three months ended March 31, 2000. General and administrative expenses as a
percent of total revenues were 5.9% and 6.3% for the quarters ended March 31,
2001 and 2000 respectively. General and administrative expenses increased in
absolute dollars in the quarter ended March 31, 2001 due to increased staffing
to support our growth, and to a lesser extent to higher expenditures for legal
and accounting services associated with operating a larger company and increased
allowances for doubtful accounts associated with higher revenue levels. General
and administrative expenses as a

                                      -13-
<PAGE>

percentage of total revenues decreased each year over the prior period, as we
experienced better productivity in our general and administrative organization.
General and administrative expenses are expected to continue to increase in
absolute dollars but may vary as a percent of revenues in the future.

Amortization of Goodwill. Goodwill amortization expense was $1.1 million for the
quarter ended March 31, 2001 as compared to $1.0 million for the comparable
quarter in 2000. Goodwill amortization expense was approximately 1% of total
revenues for all years presented. In general, goodwill is amortized over a five-
year period.

Interest and Other Income, Net

Interest and other income, net was comprised of the following (in thousands):

<TABLE>
<CAPTION>
                                                           Three months ended
                                                                March 31,
                                                         2001               2000
                                                     ------------       ------------
<S>                                                  <C>                <C>
Net interest income                                  $      2,232       $     $1,371
Other income                                                  611              1,090
                                                     ------------       ------------
      Total interest and other income, net           $      2,843       $      2,461
                                                     ============       ============
</TABLE>

Net interest income increased during the quarter ended March 31, 2001 due to a
20% increase in average cash available for investment as compared with the same
period in 2000, combined with a 1% increase in average interest rates year over
year. Total cash and cash equivalents totaled $219.5 million at March 31, 2001.

Other income was comprised of net foreign exchange gains and losses and
quarterly payments, net of attorney fees, that the Company has 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 company has received and recognized 7 of the 10 quarterly
payments due under the settlement as of March 31, 2001.

Income Taxes

The Company's effective tax rate was 39% for the quarter ended March 31, 2001
and 40% for the quarter ended March 31, 2000. The 2001 effective rate is lower
due primarily 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

As of March 31, 2001, the Company had cash and cash equivalents of $219.5
million, an increase of $19.9 million from December 31, 2000. Cash generated
from operations totaled $34.1 million for the three months ended March 31, 2001,
as compared to $16.7 million for the comparable period in 2000. Net cash
generated in 2001 resulted primarily from decreases in accounts receivables,
increases in net income and non-cash charges for depreciation and amortization,
and increases in deferred revenue and other current liabilities, partially
offset by decreases in accrued payroll and related expenses and accounts
payable. Investing activities in

                                      -14-
<PAGE>

2001 consisted primarily of the purchase of $10.4 million of property and
equipment, $4.9 million of which was related to leasehold improvements and other
equipment associated with the pending relocation of the San Jose, California
facilities in April 2001. Financing activities in 2001 consisted primarily of
the issuance of $4.6 million of ordinary shares under employee stock plans.

We believe that cash from operations together with existing cash and cash
equivalents will be sufficient to meet our cash requirements for at least the
next 12 months.

                                      -15-
<PAGE>

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 e-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 e-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 and Europe are two of the largest geographic markets
for our products and services. If there is an economic slowdown to any degree in
either of these geographic markets or in the e-business intelligence software
market general, this could affect the IT spending level by both current and
potential customers and have an adverse effect on the company's revenue and
profitability results.

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

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.

                                      -16-
<PAGE>

     .   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.

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, including BUSINESSOBJECTS 5.i and
WEBINTELLIGENCE 2.6, which were recently launched, 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.

                                      -17-
<PAGE>

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.

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 another patent infringement claim
against Cognos, Inc. 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, in July 1999, Brio Technology, Inc. filed an action alleging
that we infringe one of its patents by selling our reporting functionality.
Although Brio Technology dismissed this lawsuit as part of a settlement
announced in September 1999, other third parties may in the future make claims
that our product infringes their technology. We cannot assure you that third
parties will never make these types of claims. 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.

                                      -18-
<PAGE>

The potential effects on our business operations resulting from any third party
infringement claim that may be filed against us in the future 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 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.

                                      -19-
<PAGE>

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. We expect to generate a 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 December 31, 2000, 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

                                      -20-
<PAGE>

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.

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.

                                      -21-
<PAGE>

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 March 31, 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 March 31,
2001, we were not engaged in a foreign currency hedging program to cover our
currency transaction or translation exposure.

                                      -22-
<PAGE>

Part II. OTHER INFORMATION

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

        a)  An ordinary and extraordinary general meeting was held on February
            6, 2001.

        b)  Directors elected at the meeting: John Olsen

            Directors whose term of office as a director continued after the
            meeting:

        c)  Bernard Liautaud, Bernard Charles, Albert Eisenstat, Arnold
            Silverman, Vincent Worms. Matters voted upon at the meeting:

        1)  To ratify the nomination of John Olsen as Director of the Company.
            For:                  25,722,294
            Against:                  32,730
            Abstained:                     0

        2)  To ratify the transfer of the registered office of the Company.
            For:                  25,741,332
            Against:                  13,692
            Abstained:                     0

        3)  To approve the 2001 Stock Option Plan in the form of an "evergreen
            plan" and to authorize shares reserved for issuance thereunder.
            For:                  20,984,751
            Against:               4,769,688
            Abstained:                   585

        4)  To issue 15,000 share warrants to John Olsen.
            For:                  25,186,758
            Against:                 568,266
            Abstained:                     0

        5)  To amend the authorization previously granted to the Board of
            Directors to issue new securities with preferential subscription
            rights.
            For:                  24,721,995
            Against:               1,033,029
            Abstained:                     0

        6)  To authorize the Board of Directors to increase the share capital
            through capitalization of reserves and premiums in order to effect a
            three-for-two stock split.
            For:                  25,730,198
            Against:                  24,827
            Abstained:                     0

                                      -23-
<PAGE>

        7)  To authorize the Board of Directors to proportionately adjust the
            number of shares authorized for issuance under the 1999 Stock Option
            Plan in the event of changes in capitalization.
            For:                  25,657,695
            Against:                  97,329
            Abstained:                     0

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

            a)  (3) (ii) Bylaws

                . On March 30, 2001, the Company amended its Bylaws to change
                  the registered office to 157/159 rue Anatole France, 92309,
                  Levallois-Perret, France.

            b)  . Reports on Form 8-K
                  None.

                                      -24-
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                             Business Objects S.A.

Date:  May 11, 2001                By:      /s/ Bernard Liautaud
                                      -----------------------------------
                                                Bernard Liautaud
                                      Chairman of the Board, President,
                                         and Chief Executive Officer


Date:  May 11, 2001                By:      /s/ Clifton T. Weatherford
                                      -----------------------------------
                                             Clifton T. Weatherford
                                          Chief Financial Officer and
                                          Senior Group Vice President

                                      -25-