--------------------------------------------------------------------------------

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

                                   FORM 10 - Q
(Mark One)

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

                      For the Quarter Ended March 31, 1998

                                       or

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

                         Commission File Number 0-28252



                                BROADVISION, INC.
                                -----------------
             (Exact name of registrant as specified in its charter)


                  Delaware                                      94-3184303
                  --------                                      ----------
       (State or other jurisdiction of                       (I.R.S. Employer
       incorporation or organization)                     Identification Number)


   585 Broadway, Redwood City, California                          94063
   --------------------------------------                          -----
  (Address of principal executive offices)                      (Zip code)


                                 (650) 261-5100
                                 --------------
              (Registrant's telephone number, including area code)



         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.                   YES X      NO
                                                               ---       ---

         As of April 30, 1998 there were 24,116,327  shares of the  Registrant's
Common Stock issued and outstanding.

--------------------------------------------------------------------------------

<PAGE>




                       BROADVISION, INC. AND SUBSIDIARIES

                                    FORM 10-Q
                          QUARTER ENDED MARCH 31, 1998

                                TABLE OF CONTENTS


                                                                        Page No.
                                                                        --------


PART I   FINANCIAL INFORMATION

Item 1.       Financial Statements

                  Consolidated Statements of Operations -
                      Three months ended March 31, 1998 and 1997           3

                  Consolidated Balance Sheets -
                      March 31, 1998 and December 31, 1997                 4

                  Consolidated Statements of Cash Flows -
                      Three months ended March 31, 1998 and 1997           5

                  Notes to Consolidated Financial Statements               6


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

Item 3.       Quantitative and Qualitative disclosure About Market Risk   13



PART II       OTHER INFORMATION

Item 1.       Legal Proceedings                                           13

Item 2.       Changes in Securities                                       13

Item 3.       Defaults upon Senior Securities                             14

Item 4.       Submission of Matters to a Vote of Security Holders         14

Item 5.       Other Information                                           14

Item 6.       Exhibits and Reports on Form 8-K                            14



SIGNATURES                                                                14




                                       2
<PAGE>



                          PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


                       BROADVISION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)



                                                          Three Months Ended
                                                               March 31,
                                                         1998            1997
                                                       --------        --------

Revenues:
    Software licenses                                  $  7,279        $  3,148
    Services                                              2,800           2,143
                                                       --------        --------
       Total revenues                                    10,079           5,291

Cost of revenues:
    Cost of software licenses                               187             214
    Cost of services                                      1,620           1,143
                                                       --------        --------

       Total cost of revenues                             1,807           1,357
                                                       --------        --------

Gross profit                                              8,272           3,934

Operating expenses:
    Research and development                              2,033           1,680
    Sales and marketing                                   5,861           4,204
    General and administrative                              824             746
                                                       --------        --------

       Total operating expenses                           8,718           6,630
                                                       --------        --------

Operating loss                                             (446)         (2,696)

    Interest and other income                               118             221
    Interest and other expense                             (171)            (12)
                                                       --------        --------

Net loss                                               $   (499)       $ (2,487)
                                                       ========        ========

Basic and diluted net loss per share                   $  (0.02)       $  (0.12)
                                                       ========        ========
Shares used in computing basic and
 diluted net loss per share                              20,456          20,002
                                                       ========        ========



           See Accompanying Notes to Consolidated Financial Statements



                                       3
<PAGE>



<TABLE>
                                                 BROADVISION, INC. AND SUBSIDIARIES

                                                     CONSOLIDATED BALANCE SHEETS
                                                           (In thousands)

<CAPTION>
                                                                                                    March 31,           December 31,
                                                                                                      1998                 1997
                                                                                                    --------             --------
<S>                                                                                                 <C>                  <C>     
ASSETS

    Current assets:

       Cash and cash equivalents                                                                    $ 57,129             $  8,277
       Restricted cash                                                                                  --                  1,400
       Short-term investments, restricted                                                               --                    796
       Accounts receivable, less allowance for doubtful
         accounts and returns of  $575 and $671, for 1998
         and 1997, respectively                                                                       10,792                9,586
       Prepaids and other current assets                                                                 984                  566
                                                                                                    --------             --------

          Total current assets                                                                        68,905               20,625

    Property and equipment, net                                                                        7,113                6,467
    Other assets                                                                                         327                  250
                                                                                                    --------             --------

       Total assets                                                                                 $ 76,345             $ 27,342
                                                                                                    ========             ========

LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

       Accounts payable and accrued expenses                                                        $  4,341             $  4,031
       Unearned revenue                                                                                1,751                1,335
       Deferred maintenance                                                                            3,008                2,552
       Current portion of capital lease obligations                                                      773                  773
       Current portion of long-term debt                                                                 548                  449
                                                                                                    --------             --------

          Total current liabilities                                                                   10,421                9,140

    Long-term liabilities                                                                              3,967                3,081
                                                                                                    --------             --------

          Total liabilities                                                                           14,388               12,221

    Stockholders' equity
       Common stock                                                                                   87,611               40,368
       Deferred compensation                                                                          (1,513)              (1,605)
       Accumulated deficit                                                                           (24,141)             (23,642)
                                                                                                    --------             --------

          Total stockholders' equity                                                                  61,957               15,121
                                                                                                    --------             --------

          Total liabilities
           and stockholders' equity                                                                 $ 76,345             $ 27,342
                                                                                                    ========             ========

<FN>
                                     See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>



                                       4
<PAGE>


<TABLE>
                                                 BROADVISION, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (In thousands)

<CAPTION>
                                                                                                         Three Months Ended
                                                                                                              March 31,
                                                                                                     1998                    1997
                                                                                                   --------                --------
<S>                                                                                                <C>                     <C>      
Cash flows from operating activities:
   Net loss                                                                                        $   (499)               $ (2,487)
   Adjustments to reconcile net loss to net cash
     used for operating activities:
       Depreciation and amortization                                                                    608                     326
       Amortization of deferred compensation                                                             92                     110
       Allowance for doubtful accounts and returns                                                      245                     185
       Changes in operating assets and liabilities:
         Accounts receivable                                                                         (1,451)                 (2,463)
         Prepaids and other current assets                                                             (418)                   (188)
         Accounts payable and accrued expenses                                                          310                     400
         Unearned revenue and deferred maintenance                                                      872                     249
         Other liabilities                                                                               (5)                     (2)
                                                                                                   --------                --------
           Net cash used for operating activities                                                      (246)                 (3,870)
Cash flows from investing activities:
   Acquisition of property and equipment                                                             (1,254)                   (474)
   Increase in other assets                                                                             (77)                    (81)
   Purchase of short-term investments                                                                  --                    (1,532)
   Maturity of short-term investments                                                                   796                   2,112
                                                                                                   --------                --------
         Net cash provided by (used for) investing
          activities                                                                                   (535)                     25
Cash flows from financing activities:
   Net change in restricted cash                                                                      1,400                    --
   Proceeds from issuance of common stock                                                            47,243                     247
   Proceeds from borrowings                                                                           1,187                    --
   Capital lease payments                                                                              (197)                   (110)
                                                                                                   --------                --------

         Net cash provided by financing activities                                                   49,633                     137
                                                                                                   --------                --------
Net increase (decrease) in cash and cash equivalents                                                 48,852                  (3,708)

Cash and cash equivalents at beginning of period                                                      8,277                  17,608
                                                                                                   --------                --------

Cash and cash equivalents at end of period                                                         $ 57,129                $ 13,900
                                                                                                   ========                ========

Non-cash investing and financing activities:
   Acquisition of equipment under capital lease                                                    $   --                  $    178
                                                                                                   ========                ========

<FN>
                                     See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>



                                       5
<PAGE>



                       BROADVISION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Organization and Summary of Significant Accounting Policies

Nature  of  Business  -  BroadVision,  Inc.  ("BroadVision"  or  the  "Company")
develops,   markets  and  supports  integrated  application  software  solutions
exclusively  designed  to  manage  one-to-one  relationships  for  the  extended
enterprise.  These total end to end solutions  allow a business to capitalize on
the  Internet  as a  unique  platform  to  conduct  commerce,  provide  critical
self-service functions,  and deliver targeted personalized  information to their
customers, suppliers, distributors, employees, or any other constituent of their
extended enterprise on a real-time interactive basis.

Basis of  Presentation  - The  accompanying  consolidated  financial  statements
include the  accounts of  BroadVision,  and its wholly owned  subsidiaries.  All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

Interim Financial Information - The accompanying  financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and the  instructions  for Form 10-Q and  Article  10 of
Regulation S-X. In the Company's opinion,  the financial  statements include all
adjustments,  consisting  of normal  recurring  adjustments,  which the  Company
considers  necessary to fairly state the  Company's  financial  position and the
results of operations and cash flows. The balance sheet at December 31, 1997 has
been derived  from the audited  financial  statements  at that date but does not
include all of the necessary informational disclosures and footnotes as required
by  Generally  Accepted  Accounting   Principles.   The  accompanying  financial
statements should be read in conjunction with the financial statements and notes
thereto  included  with the  Company's  annual  report  on Form  10-K and  other
documents filed with the Securities and Exchange Commission.  The results of the
Company's  operations for any interim period are not  necessarily  indicative of
the results of the Company's  operations  for any other interim  period or for a
full fiscal year.

Net Loss Per Share - The Financial  Accounting Standards Board ("FASB") recently
issued Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings Per
Share,  which requires the  presentation of basic net income per share,  and for
companies with complex  capital  structures,  diluted net income per share.  The
Company  has net losses for all  periods  presented  and there is no  difference
between the previously  reported  primary loss per share amounts and the amounts
currently  reported as basic and diluted loss per share.  Because  their effects
would be anti-dilutive,  stock options to acquire 4,188,010 shares and a warrant
to acquire 60,000 shares of common stock at weighted  average exercise prices of
$5.41 and $8.50, respectively,  have been excluded from the computation of basic
and  diluted  earnings  per share for the  quarter  ended  March  31,  1998.  In
conjunction  with the  Company's  adoption  of SFAS No. 128,  the  Company  also
adopted the provisions of Staff  Accounting  Bulletin  ("SAB") No. 98, issued in
February 1998.  Accordingly,  shares previously  included pursuant to SAB No. 83
have been omitted  from both basic and diluted net income per share  amounts and
prior periods have been restated as applicable.

Recent  Accounting  Pronouncements  -  Effective  January 1, 1998,  the  Company
adopted the provisions of SFAS No. 130, Reporting of Comprehensive  Income. SFAS
No. 130 establishes  standards for the display of  comprehensive  income and its
components in a full set of financial statements.  Comprehensive income includes
all changes in equity during a period except those  resulting  from the issuance
of shares of stock and  distributions  to  stockholders.  There were no material
differences between net loss and comprehensive income (loss) during the quarters
ended March 31, 1998 and 1997.

                                       6
<PAGE>

Note 2.  Selective Balance Sheet Detail (in thousands)

<TABLE>
         Property and Equipment consisted of the following:

<CAPTION>
                                                                          March 31,        December 31,
                                                                            1998               1997
                                                                            ----               ----
<S>                                                                      <C>                <C>      
              Furniture and fixtures                                     $       741        $     636
              Computers and software                                           6,063            5,458
              Leasehold improvements                                           3,324            2,780
                                                                         -----------        ---------
                                                                              10,128            8,874
              Less accumulated depreciation and amortization                   3,015            2,407
                                                                         -----------        ---------
                                                                         $     7,113        $   6,467
                                                                         ===========        =========
</TABLE>

<TABLE>
         Accrued expenses consisted of the following:

<CAPTION>
                                                                            March 31,      December 31,
                                                                              1998             1997
                                                                              ----             ----
<S>                                                                      <C>                <C>        
              Employee benefits                                          $       532        $       420
              Commissions and bonuses                                          1,147                833
              Directors and officers insurance premiums                            -                 57
              Taxes payable                                                      372                366
              Contractors fees                                                    99                162
              Other                                                              565                330
                                                                         -----------         ----------
                                                                         $     2,715         $    2,168
                                                                         ===========         ==========
</TABLE>


Note 3.  Commercial Credit Facilities

         The Company has a revolving line of credit (based on eligible  accounts
receivable)  and a term debt credit  facility  with its  commercial  lender that
provide  for  up  to  $2.3  million  and  $4.8  million  of  total   borrowings,
respectively.  As of March 31, 1998,  the Company had total  borrowings  of $3.8
million under its term debt credit facility and  outstanding  commitments in the
form of two standby  letters of credit totaling $2.2 million under its revolving
line of  credit.  During  the  quarter  ended  March  31,  1998,  the  Company's
commercial  lender increased total available  borrowings under its existing term
debt credit facility from $4.3 million to $4.8 million.

         The Company's credit facilities  include covenants which impose certain
restrictions on the payment of dividends and other distributions and require the
Company to maintain  monthly  financial  covenants,  including  a minimum  quick
ratio,  tangible  net worth ratio and minimum  cash  reserves.  The minimum cash
reserves  covenant is replaced with a minimum debt service  coverage  ratio upon
six consecutive  quarters of profitability.  Borrowings are  collateralized by a
security  interest in  substantially  all of the  Company's  owned  assets.  The
Company was in compliance  with all of its  financial  covenants as of March 31,
1998.


Note 4.  Common Stock

         During the  quarter  ended  March 31,  1998,  the  Company  completed a
successful secondary public stock offering and issued 3,000,000 shares of common
stock for net proceeds of  approximately  $47.2 million.  During April 1998, the
Company's  Underwriters  exercised their  over-allotment  option and the Company
issued  an  additional  455,850  shares  of common  stock  for net  proceeds  of
approximately $7.1 million.

                                       7
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

         EXCEPT FOR THE HISTORICAL  INFORMATION  CONTAINED HEREIN, THE FOLLOWING
DISCUSSION   CONTAINS   FORWARD-LOOKING   STATEMENTS   THAT  INVOLVE  RISKS  AND
UNCERTAINTIES.  THE COMPANY'S  ACTUAL  RESULTS COULD DIFFER  SIGNIFICANTLY  FROM
THOSE  DISCUSSED  HEREIN.  FACTORS  THAT  COULD  CAUSE  OR  CONTRIBUTE  TO  SUCH
DIFFERENCES  INCLUDE,  BUT ARE NOT LIMITED TO, THOSE DISCUSSED  HEREIN WITH THIS
QUARTERLY  REPORT ON FORM 10-Q,  THE COMPANY'S  ANNUAL REPORT ON FORM 10-K,  AND
OTHER  DOCUMENTS  FILED WITH THE  SECURITIES AND EXCHANGE  COMMISSION.  ANY SUCH
FORWARD-LOOKING  STATEMENTS  SPEAK ONLY AS OF THE DATE SUCH STATEMENTS ARE MADE.

                                    OVERVIEW

         BroadVision  develops,  markets  and  supports  integrated  application
software solutions  exclusively designed to manage one-to-one  relationships for
the extended  enterprise.  These total end to end solutions  allow a business to
capitalize  on the Internet as a unique  platform to conduct  commerce,  provide
critical self-service functions,  and deliver targeted personalized  information
to their customers, suppliers, distributors, employees, or any other constituent
of their extended enterprise on a real-time interactive basis.

         BroadVision's   product  line  provides  a  competitive  advantage  for
businesses  by  allowing  them to  specifically  tailor Web site  content to the
personalized  needs  and  interests  of  individual   visitors  on  a  real-time
interactive  basis.  BroadVision  One-To-One  applications  accomplish  this  by
capturing  Web  site  visitor  profiles,   dynamically   organizing   enterprise
information,  targeting  specialized  content  to each  visitor  based on easily
constructed  business rules, and providing the means to facilitate the execution
of secure  transactions.  The Company  believes the  competitive  advantages and
benefits of these applications  include,  among other things,  enhanced customer
satisfaction and loyalty, increased business volumes, reduced costs with regards
to servicing  customers  and  executing  transactions  as well as  significantly
enhancing employee productivity.

         The Company's  core product,  the  BroadVision  One-To-One  Application
System, was first made commercially available in December 1995. Version 3.0, the
Company's  latest  version,  was released  during the fourth quarter of 1997 and
supports five languages (English,  German,  Japanese,  Chinese,  and Korean) and
four major client/server databases (Oracle,  Sybase, Informix, and Microsoft SQL
Server). In 1997, the Company released a complementary  family of three packaged
application products:  One-To-One Commerce, One-To-One Financial, and One-To-One
Knowledge.  These  products  are  built  upon and  tightly  integrated  with the
Company's core technology and provide  specifically  enhanced  functionality for
the distinct customer requirements involved in managing one-to-one relationships
within product merchandising, financial services, and knowledge management.

         The Company sells its products and services  worldwide through a direct
sales  force,  independent  distributors,   value-added  resellers,  and  system
integrators.  It also has a global network of strategic  business  relationships
with key industry platform and Web developer partners.

         The  Company has  achieved  good market  acceptance  for its  products.
However,  the Company does have a limited operating  history,  and its prospects
must be evaluated in light of the risks and uncertainties frequently encountered
by a company  within  its early  stages  of  development.  Some of the risks and
uncertainties  associated with the Company's stage of development  relate to the
new and rapidly  evolving  markets in which it operates.  These  related  market
risks include,  among other things,  the early stage of  development  for online
commerce,  the dependence of online commerce on the continued development of the
Internet and its related infrastructure,  the uncertainty of widespread adoption
of online commerce and the risk of government regulation of the Internet.  Other
risks and  uncertainties  facing the Company relate to the Company's  ability to
continue  to,  among  other   things,   successfully   implement  its  marketing
strategies,  respond  to  competitive  developments,  develop  and  upgrade  its
products and technologies  more rapidly than its competitors,  and commercialize
its products and services by incorporating  these enhanced  technologies.  There
can be no assurance  that the Company will succeed in  addressing  any or all of
these risks.  A more complete  description  of these and other risks relating to
the Company's  business is set forth herein under "Factors  Affecting  Quarterly
Operating  Results" and in the  Company's  annual  report on Form 10-K under the
caption "Risk Factors" and elsewhere  therein and other documents filed with the
Securities and Exchange Commission.


                                       8
<PAGE>

                              RESULTS OF OPERATIONS

Revenues

         The Company's  revenues are derived from software license fees and fees
charged for its services. The Company generally recognizes license fees when the
software  has  been  delivered,   the  customer  acknowledges  an  unconditional
obligation  to  pay,  and  collectibility  is  probable.  Professional  services
revenues   generally  are  recognized  as  services  are   performed.   Software
maintenance revenues are recognized ratably over the term of the support period,
which is typically one year.

<TABLE>
         Total Company  revenues  increased 90% during the current quarter ended
March 31,  1998 to $10.1  million as  compared  to $5.3  million for the quarter
ended March 31, 1997. A summary of the Company's  revenues by geographic  region
is as follows:

<CAPTION>
(In millions)                                                Software       %         Services        %           Total          %
-------------                                                --------       -         --------        -           -----          -
<S>                                                           <C>           <C>         <C>           <C>         <C>            <C>
Quarter Ended March 31, 1998:

North America                                                 $  4.1        56%         $  2.0        71%         $   6.1        60%
Europe                                                           2.3        32             0.5        18              2.8        28
Asia/Pacific                                                     0.9        12             0.3        11              1.2        12
------------------------------------------------------------------------------------------------------------------------------------
Total                                                         $  7.3       100%         $  2.8       100%         $  10.1       100%
====================================================================================================================================

Quarter Ended March 31, 1997:

North America                                                 $  1.4        44%         $  0.9        43%         $   2.3        44%
Europe                                                           1.3        40             0.3        14              1.6        30
Asia/Pacific                                                     0.5        16             0.9        43              1.4        26
------------------------------------------------------------------------------------------------------------------------------------
Total                                                         $  3.2       100%         $  2.1       100%         $   5.3       100%
====================================================================================================================================
</TABLE>

         Software product license revenues increased 131% to $7.3 million during
the current  quarter  ended  March 31, 1998 as compared to $3.2  million for the
quarter  ended March 31,  1997.  The increase is primarily a result of continued
strong  market  acceptance  for  the  Company's  core  technology,   BroadVision
One-To-One,  and three new complementary WebApp packaged solutions,  BroadVision
One-To-One  Commerce,   BroadVision   One-To-One   Financial,   and  BroadVision
One-To-One  Knowledge  that were  first  introduced  in 1997.  During  the first
quarter of 1998, the Company licensed  approximately 30 new customers (including
partners) which compares to approximately 25 new licensed  customers  (including
partners) during the first quarter of 1997.

         Services  revenues  increased  31% to $2.8  million  during the current
quarter  ended March 31, 1998 as compared to $2.1 million for the quarter  ended
March 31, 1997. Services revenues consist primarily of professional services and
maintenance.   The   Company's   professional   services   include   design  and
implementation  of  applications  based on  BroadVision  One-To-One  technology,
project management,  custom development of objects and templates,  and education
and  training  regarding  the  Company's  products.  Professional  services  are
generally  offered  on a  time  and  materials  basis.  Maintenance  revenue  is
generally derived from annual service  agreements and is recognized ratably over
the period of the agreement, typically one year. Maintenance fees are based on a
percentage of the list price for the related software.

         Professional services revenues increased 15% to $2.0 million during the
current quarter ended March 31, 1998 as compared to $1.8 million for the quarter
ended March 31, 1997.  Professional  services  revenues as a percentage of total
services  revenues were 72% and 82% during the first  quarters of 1998 and 1997,
respectively.  The increase in professional services revenues in absolute dollar
terms is a result of higher business  volumes.  In relative terms,  professional
services revenues as a percentage of total services revenues declined as the mix
between professional services and maintenance revenues shift, and as a result of
the  Company's  strategy  to  leverage  off of  partners  in order  to  maximize
deployments,  which  allows  the  Company  to  achieve  higher  volumes  without
significant increases in its services organization. As the Company's strategy of
developing   business   alliances  with  third  parties   continues  to  expand,
professional  services  revenues as a percentage of total services  revenues may
continue to decline.

                                        9
<PAGE>

         Maintenance  revenues  increased  103% to  $788,000  during the current
quarter ended March 31, 1998 as compared to $388,000 for the quarter ended March
31, 1997.  Maintenance  revenues as a percentage of total services revenues were
28% and 18%  during  the  first  quarters  of 1998 and 1997,  respectively.  The
increase in maintenance revenues is a result of expanding software sales and the
corresponding  maintenance  fees relating to a larger installed base of software
licenses.  As of March 31,  1998,  the Company had licensed its products to over
180 customers. This compares with a total licensed base of over 150 customers as
of  December  31,  1997,  and over 70  customers  as of March 31,  1997.  As the
Company's installed license base grows, its maintenance revenues as a percentage
of total services revenues may continue to increase.


Operating Expenses

         Cost of software licenses  includes  royalties payable to third parties
for software that is either embedded in, or bundled and sold with, the Company's
products; commissioned agent fees paid to distributors; and the costs of product
media, duplication, packaging and other associated manufacturing costs.

         Cost  of  software  licenses  was  $187,000  (or  3% of  total  license
revenues)  for the current  quarter ended March 31, 1998 as compared to $214,000
(or 7% of total license  revenues)  for the quarter ended March 31, 1997,  which
represents  a decrease  of 13% for the first  quarter of 1998 in relation to the
first  quarter of 1997.  Cost of software  licenses  decreased in both  absolute
dollar and percentage  terms during the first quarter of 1998 as compared to the
first quarter of 1997 due to the mix of commissioned  agent sales versus Company
generated sales.

         Cost of  services  consists  primarily  of  employee-related  costs and
third-party  consultant  fees  incurred  as a  result  of  consulting  projects,
post-contract customer support, and instructional training services.

         Cost of services was $1.6 million (or 58% of total  services  revenues)
for the current quarter ended March 31, 1998 as compared to $1.1 million (or 53%
of total  services  revenues)  for the  quarter  ended  March  31,  1997,  which
represents an absolute  dollar  increase of 42% for the first quarter of 1998 in
relation to the first  quarter of 1997.  Cost of services  increased in absolute
dollar terms during 1998 as compared to 1997 due to expanded  business  volumes,
as represented by the 31% increase in total services revenues. The overall level
of costs increased as a result of additions to the Company's  consulting  staff,
the   employment  of  outside   consultants   to  meet   short-term   consulting
arrangements,  an  increasing  number of licenses  with  support or  maintenance
components,  and a higher  level of fixed  costs  resulting  from the  Company's
expansion of its services  organization  to meet higher  business  volumes.  The
increase in cost of services as a percentage of total services  revenues  during
the current quarter as compared to the prior year comparable quarter is a result
of  higher  utilization  of  outside  consultants  in  relation  to  the  extent
previously  utilized  during the  comparable  prior year  quarter.  The  Company
expects that services costs will continue to increase in absolute dollars as the
Company  continues to expand its services  organization  to support  anticipated
higher levels of business.

         Research and development expenses consist primarily of salaries,  other
employee-related  costs,  and consulting fees relating to the development of the
Company's products.

         Research  and  development  expenses  were $2.0 million for the current
quarter  ended March 31, 1998 as compared to $1.7 million for the quarter  ended
March 31, 1997,  which  represents  an increase of 21% for the first  quarter of
1998 in relation to the first  quarter of 1997.  The  increases  in research and
development  expenses  are  primarily  attributable  to  costs  associated  with
additional  personnel  within those  operations for the  enhancement of existing
products and the  development  of new  products.  The Company  anticipates  that
research and development  expenses will continue to increase in absolute dollars
terms.  Development  costs  incurred  for the research  and  development  of new
software  products are expensed as incurred until  technological  feasibility in
the form of a working model has been  established,  at which time such costs are
capitalized,  subject  to  recoverability.  As of March 31,  1998,  no  software
development costs had been capitalized.

                                       10
<PAGE>

         Sales and marketing  expenses  consist  primarily of salaries and other
employee-related costs, commissions and other incentive compensation, travel and
entertainment,  and marketing program expenditures such as collateral materials,
trade shows, public relations, and creative services.

         Sales and marketing  expenses were $5.9 million for the current quarter
ended March 31, 1998 as compared to $4.2 million for the quarter ended March 31,
1997,  which  represents  an  increase  of 39% for the first  quarter of 1998 in
relation  to the first  quarter  of 1997.  The  overall  increases  in sales and
marketing expenditures reflect the cost of hiring additional sales and marketing
personnel,  developing and expanding its sales distribution channels,  deploying
new  products,  and expanding  promotional  activities.  The Company  expects to
continue to expand its direct sales and marketing  efforts and expects sales and
marketing expenses to continue to increase in absolute dollars.

         General and  administrative  expenses  consist  primarily  of salaries,
other employee-related costs, and professional service fees.

         General  and  administrative  expenses  were  $824,000  for the current
quarter ended March 31, 1998 as compared to $746,000 for the quarter ended March
31, 1997,  which  represents an increase of 10% for the first quarter of 1998 in
relation  to  the  first   quarter  of  1997.   The  increases  in  general  and
administrative   expenses  are   attributable   to  the  hiring  of   additional
administrative  and  management  personnel,  increased  professional  fees,  and
additional  infrastructure to support the expansion of the Company's operations.
The Company expects to continue to add administrative staff to support broadened
operations.  As a result,  the Company  expects that general and  administrative
expenses will continue to increase in absolute dollars.

         The Company recorded deferred  compensation of $2.4 million relating to
the  difference  between  the  exercise  price and the deemed  fair value of the
Company's  Common Stock with respect to 1,794,000 shares issueable upon exercise
of options  granted prior to its initial  public stock offering in June of 1996.
This deferred compensation is being amortized to cost of services,  research and
development, selling and marketing, and general and administrative expenses over
the vesting  periods of the respective  options,  generally 60 months.  Deferred
compensation expense for the current quarter ended March 31, 1998 was $92,000 as
compared to $110,000 for the quarter ended March 31, 1997. Reported results will
reflect  deferred  amortization  expense  through the year 2003, but such effect
will be significantly reduced beginning in the third quarter of 2001.


                         LIQUIDITY AND CAPITAL RESOURCES

         As of March 31,  1998,  the Company had $57.1  million of cash and cash
equivalents as compared to $10.5 million of cash, cash  equivalents,  restricted
cash and  short-term  investments as of December 31, 1997,  which  represents an
increase  of $46.6  million.  The  increase  in cash and  cash  equivalents  was
principally  attributable to the Company's  secondary public stock offering that
netted the Company total proceeds of approximately $47.2 million.

         During the quarter ended March 31, 1998, the Company had  approximately
$1.3 million of capital  expenditures,  approximately $1.2 million of additional
borrowings and $246,000 was used for operating activities. The Company currently
has no significant  capital  commitments  other than obligations under equipment
and operating leases, $2.2 million of commitments relating to standby letters of
credit,  and $3.8 million of outstanding term debt.  During the first quarter of
1998, the Company's commercial bank increased its credit facility to provide for
total borrowings of up to $7.1 million.

         During April 1998, the Underwriters  for the Company's  secondary stock
offering  exercised  their  over-allotment  option  and the  Company  issued  an
additional 455,850 shares of common stock for net proceeds of approximately $7.1
million.

         The Company believes that its available cash resources,  cash generated
from  operations and amounts  available under its commercial  credit  facilities
will be sufficient to meet its expected working capital and capital  expenditure
requirements for at least the next 12 months.

                                       11
<PAGE>

                  FACTORS AFFECTING QUARTERLY OPERATING RESULTS

     The Company  expects to experience  significant  fluctuations  in quarterly
operating results that may be caused by many factors including,  but not limited
to, those discussed below and herein with this quarterly report on Form 10-Q, as
contained in the  Company's  annual  report on Form 10-K under the caption "Risk
Factors" and elsewhere  therein,  and as disclosed in other documents filed with
the  Securities  and Exchange  Commission.  Significant  fluctuations  in future
quarterly operating results that may be caused by many factors including,  among
others,  the timing of introductions or enhancements of products and services by
the Company or its competitors,  the length of the Company's sales cycle, market
acceptance of new  products,  the pace of  development  of the market for online
commerce,  the mix of the  Company's  products  sold,  the  size and  timing  of
significant orders and the timing of customer  production or deployment,  demand
for the Company's  products,  changes in pricing  policies by the Company or its
competitors, changes in the Company's sales incentive plans, budgeting cycles of
its  customers,  customer  order  deferrals in  anticipation  of new products or
enhancements  by  the  Company  or  its   competitors,   nonrenewal  of  service
agreements,  product life cycles,  software  defects and other  product  quality
problems,  changes  in  strategy,  changes  in  key  personnel,  the  extent  of
international  expansion,  seasonal  trends,  the mix of  distribution  channels
through  which the Company's  products are sold,  the mix of  international  and
domestic sales,  changes in the level of operating expenses to support projected
growth,  and  general  economic  conditions.  The  Company  anticipates  that  a
significant  portion of its revenues  will be derived  from a limited  number of
orders, and the timing of receipt and fulfillment of any such orders is expected
to cause material fluctuations in the Company's operating results,  particularly
on a quarterly basis. As with many software  companies,  the Company anticipates
that it will make the major portion of each quarter's deliveries near the end of
each quarter  and, as a result,  short delays in delivery of products at the end
of a quarter could  adversely  affect  operating  results for that  quarter.  In
addition,  the Company intends, in the near term, to increase  significantly its
personnel,  including  its domestic and  international  direct sales force.  The
timing  of such  expansion  and the  rate  at  which  new  sales  people  become
productive  could also cause material  fluctuations  in the Company's  quarterly
operating results.

         Due to the foregoing factors,  quarterly revenues and operating results
are  difficult  to  forecast,  and the Company  believes  that  period-to-period
comparisons  of its operating  results will not  necessarily  be meaningful  and
should not be relied upon as any indication of future performance.  It is likely
that the Company's future quarterly operating results from time to time will not
meet the expectations of market analysts or investors, which may have an adverse
effect on the price of the Company's Common Stock. The Company  anticipates that
its  operating  expenses will  continue to be  substantial  in relation to total
revenues as it continues the development of its technology,  increases its sales
and marketing  activities,  and creates and expands its  distribution  channels.
Accordingly, the Company may incur additional losses for the foreseeable future.
In addition,  the Company's  limited  operating  history makes the prediction of
future  results  of  operations  difficult  and,  accordingly,  there  can be no
assurance that the Company will be able to sustain its revenue growth or achieve
profitability.  The Company's  limited  operating history also requires that its
prospects  be  evaluated  in light of the  risks  and  uncertainties  frequently
encountered by a company in its early stages of development. Some of these risks
and  uncertainties  relate to the new and rapidly evolving nature of the markets
in which the Company operates.  These related market risks include,  among other
things, the early stage of the developing online commerce market, the dependence
of  online  commerce  on  the  development  of  the  Internet  and  its  related
infrastructure,  the  uncertainty  pertaining to  widespread  adoption of online
commerce, and the risk of government regulation of the Internet. Other risks and
uncertainties facing the Company relate to the Company's ability to, among other
things, successfully implement its marketing strategies,  respond to competitive
developments, continue to develop and upgrade its products and technologies more
rapidly than its  competitors,  and  commercialize  its products and services by
incorporating  these enhanced  technologies.  There can be no assurance that the
Company will succeed in  addressing  any or all of these risks.  A more complete
description of these and other risks  relating to the Company's  business is set
forth in the  Company's  annual  report on Form 10-K  under  the  caption  "Risk
Factors" and elsewhere therein and other documents filed with the Securities and
Exchange  Commission.  It is also likely  that the  Company's  future  quarterly
operating  results  from time to time will not meet the  expectations  of market
analysts  or  investors,  which may have an  adverse  effect on the price of the
Company's Common Stock.

Year 2000 Compliance - Many currently  installed  computer  systems and software
products  are coded to accept two digit  entries in the date code  field.  These
date code  fields  will need to accept four digit  entries to  distinguish  21st
century  dates from 20th  century  dates.  As a result,  in less than two years,


                                       12
<PAGE>

computer  systems and software used by many companies may need to be upgraded to
comply with such "Year 2000"  requirements.  Although the Company's products are
Year 2000  compliant,  the  Company  believes  that the  purchasing  patterns of
customers  and  potential  customers  may be  affected  by Year  2000  issues as
companies  expend  significant  resources  to  correct  or patch  their  current
software  systems for Year 2000  compliance.  These  expenditures  may result in
reduced funds available to purchase  software  products such as those offered by
the  Company,  which  could  have a  material  adverse  effect on the  Company's
business,  financial condition,  and operating results. In addition, even if the
Company's  products are Year 2000  compliant,  other systems or software used by
the  Company's  customers  may not be Year 2000  compliant.  The failure of such
noncompliant   third-party  software  or  systems  could  affect  the  perceived
performance  of the  Company's  products,  which  could have a material  adverse
effect on the Company's business, financial condition, and operating results.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     Not applicable

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     Use of Proceeds

(1)  The effective date of the Company's  registration  statement  filed on Form
     S-1 (No. 333-3844) (the  "Registration  Statement") for which the following
     information is being disclosed is June 21, 1996.

(2)  The  Company's   initial  public  offering  pursuant  to  the  Registration
     Statement commenced on June 21, 1996 (the "Offering").

(3)  The Offering did not terminate before any securities were sold.

(4)  (i)    The Offering has terminated.

     (ii)   The  managing  underwriters  were  Robertson,  Stephens  &  Company,
            Hambrecht & Quist and Wessels, Arnold & Henderson.

     (iii)  The Offering was for Common Stock of the Company.

     (iv)   Pursuant to the Offering,  the Company registered and sold 3,360,000
            shares of  Common  Stock  with an  aggregate  offering  price of the
            amount registered and sold of $23,520,000.

     (v)    Following are the amount of expenses incurred (a) from the effective
            date of the  Registration  Statement  to the  ending  period  of the
            reporting  period and (b) for the  Company's  account in  connection
            with the issuance and  distribution  of the Common Stock pursuant to
            the Offering:

                  Underwriting discounts and commissions              $1,646,000
                  Finders' Fees                                             None
                  Expenses paid to or for underwriters                      None
                  Other expenses                                       1,119,000
                                                                      ----------
                          Total expenses                              $2,765,000

            The above  expenses  constituted  direct  or  indirect  payments  to
            others.

     (vi)   The net offering proceeds to the Company,  after deducting the total
            expenses above, were $20,755,000.

     (vii)  Following  are the  uses,  including  amounts,  of the net  offering
            proceeds from the effective  date of the  Registration  Statement to
            the ending period of the reporting period:

             Construction of plant, building
                  and facilities or leasehold improvements            $3,179,000
             Purchases and installation of machinery,
                  and equipment                                        5,343,000
             Purchase of real estate                                        None
             Acquisition of other business(es)                              None
             Repayment of indebtedness                                      None
             Working capital                                          12,233,000
             Other purposes                                                 None

            All of the foregoing uses were direct or indirect payment to others.

     (viii) The use of proceeds  described  in (vii) above does not  represent a
            material change in the use of proceeds described in the prospectus.

                                       13
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable

ITEM 5.  OTHER INFORMATION

         Not applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

              Item       Description
              ----       -----------
              10.1*      Equity Incentive Plan as amended March 11, 1998
              10.2*      Employee Stock Purchase Plan as amended March 11, 1998
              27.1       Financial Data Schedule

*    Filed as an exhibit to the  Company's  Proxy  Statement  filed on April 16,
     1998 and incorporated herein by reference .




                                   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.

                                    BROADVISION, INC


Date: May 15, 1998                   /s/  Pehong Chen
------------------        ---------------------------------------------
                          Pehong Chen
                          President and Chief Executive Officer
                          (Principal Executive Officer)


Date: May 15, 1998              /s/  Randall C. Bolten
------------------        ---------------------------------------------
                          Randall C. Bolten
                          Vice President, Operations and Chief Financial Officer
                          (Principal Financial and Accounting Officer)


                                       14
<PAGE>

                               INDEX TO EXHIBITS



Exhibit
  No.         Description
-------       ------------------------------------------------------

10.1*         Equity Incentive Plan, as amended March 11, 1998

10.2*         Employee Stock Purchase Plan, as amended March 11, 1998

27.1          Financial Data Schedule


*    Filed as an exhibit to the  Company's  Proxy  Statement  filed on April 16,
     1998 and incorporated herein by reference.


                                       15