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

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

                                   FORM 10 - Q

(Mark One)

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

                For the quarterly period ended September 30, 1997

                                       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)

333 Distel Circle, Los Altos, California                         94022-1404
----------------------------------------                         ----------
(Address of principal executive offices)                         (Zip code)

                                 (415) 943-3600
                                 --------------
              (Registrant's telephone number, including area code)

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

         As of October 31, 1997 there were 20,338,719 shares of the Registrant's
Common Stock outstanding.


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                           This is page 1 of 14 pages.
                         Index to exhibits is on page 15

<PAGE>




                                BROADVISION, INC.

                          QUARTERLY REPORT ON FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1997

                                TABLE OF CONTENTS


                                                                        Page No.
--------------------------------------------------------------------------------

PART I   FINANCIAL INFORMATION

Item 1.       Financial Statements

                  Condensed Consolidated Statements of Operations -
                      Three and nine months ended September 30, 1997
                      and 1996                                                 3

                  Condensed Consolidated Balance Sheets -
                      September 30, 1997 and December 31, 1996                 4

                  Condensed Consolidated Statements of Cash Flows -
                      Nine months ended September 30, 1997 and 1996            5

                  Notes to Condensed Consolidated Financial Statements         6


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

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

PART II       OTHER INFORMATION

Item 1.       Legal Proceedings                                               13

Item 2.       Changes in Securities                                           13

Item 3.       Defaults upon Senior Securities                                 13

Item 4.       Submission of Matters to a Vote of Security Holders             13

Item 5.       Other Information                                               13

Item 6.       Exhibits and Reports on Form 8-K                                13

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

SIGNATURES                                                                    14

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                                       2
<PAGE>


<TABLE>

                                  BROADVISION, INC. AND SUBSIDIARIES
                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (In thousands, except per share amounts)

<CAPTION>

                                                        Three Months Ended          Nine Months Ended
                                                           September 30,              September 30,
                                                         1997         1996         1997          1996
                                                            (unaudited)                (unaudited)
                                                       ---------------------     ---------------------
<S>                                                    <C>          <C>          <C>          <C>     
Revenues:
    Software licenses                                  $  5,513     $  2,074     $ 12,759     $  4,737
    Services                                              1,641        1,026        5,713        2,063
                                                       --------     --------     --------     --------
       Total revenues                                     7,154        3,100       18,472        6,800

Cost of revenues:

    Cost of license revenues                                460           72        1,099          261
    Cost of service revenues                              1,010          520        3,154        1,017
                                                       --------     --------     --------     --------

       Total cost of revenues                             1,470          592        4,253        1,278
                                                       --------     --------     --------     --------

Gross profit                                              5,684        2,508       14,219        5,522

Operating expenses:

    Research and development                              2,113        1,320        5,595        3,513
    Sales and marketing                                   4,630        3,574       13,091        7,667
    General and administrative                              763          592        2,209        1,230
                                                       --------     --------     --------     --------

       Total operating expenses                           7,506        5,486       20,895       12,410
                                                       --------     --------     --------     --------

Operating loss                                           (1,822)      (2,978)      (6,676)      (6,888)

    Interest and other income                               133          331          541          425
    Interest and other expense                               (2)         (27)        (152)         (89)
                                                       --------     --------     --------     --------

Net loss                                               $ (1,691)    $ (2,674)    $ (6,287)    $ (6,552)
                                                       ========     ========     ========     ========

Net loss per share                                     $  (0.08)    $  (0.13)    $  (0.31)    $  (0.35)
                                                       ========     ========     ========     ========

Shares used in computing net loss per share              20,284       19,889       20,169       18,720

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

                                                                 3

<PAGE>


                       BROADVISION, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)



                                                      September 30, December 31,
                                                          1997         1996
                                                       (unaudited)   
                                                      ------------  ------------
ASSETS                                                                
                                                                      
    Current assets:                                                   
                                                                      
       Cash and cash equivalents                         $  9,001      $ 17,608
       Short-term investments                                   -         2,112
       Accounts receivable, net                             9,287         5,548
       Other current assets                                   545           317
                                                         --------      --------
                                                                      
          Total current assets                             18,833        25,585
                                                                      
    Property and equipment, net                             4,058         3,024
    Other assets                                              367           321
                                                         --------      --------
                                                                      
       Total assets                                      $ 23,258      $ 28,930
                                                         ========      ========
                                                                      
LIABILITIES AND STOCKHOLDERS' EQUITY                                  
                                                                      
    Current liabilities:                                              
                                                                      
       Accounts payable and accrued expenses             $  3,218      $  3,484
       Unearned revenue                                     1,490         2,625
       Deferred maintenance                                 1,758           924
       Current portion of long-term liabilities               365           294
                                                         --------      --------
                                                                      
          Total current liabilities                         6,831         7,327
                                                                      
    Long-term liabilities                                     637           587
                                                                      
    Stockholders' equity                                              
       Common stock                                        40,048        39,318
       Deferred compensation                               (1,702)       (2,033)
       Accumulated deficit                                (22,556)      (16,269)
                                                         --------      --------
                                                                      
          Total stockholders' equity                       15,790        21,016
                                                         --------      --------
                                                                      
          Total liabilities and stockholders' equity     $ 23,258      $ 28,930
                                                         ========      ========
                                                                      

   The accompanying notes are an integral part of these financial statements.

                                       4

<PAGE>


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

<CAPTION>
                                                                          Nine months ended
                                                                    --------------------------------
                                                                  September 30,         September 30,
                                                                      1997                   1996
                                                                   (unaudited)           (unaudited)
                                                                   -----------           -----------
<S>                                                                 <C>                     <C>      
Cash flows from operating activities:

    Net loss                                                        $ (6,287)               $ (6,552)
    Adjustments to reconcile net loss to net cash
       used for operating activities:
          Depreciation and amortization                                1,148                     476
          Amortization of deferred compensation                          331                     379
          Changes in operating assets and liabilities:
          Accounts receivable                                         (3,739)                 (3,904)
          Other assets                                                  (274)                   (629)
          Accounts payable and accrued expenses                         (266)                  2,244
          Unearned revenue and deferred maintenance                     (301)                  3,021
          Other liabilities                                               (7)                     18
                                                                    --------                --------

          Net cash used in operating activities                       (9,395)                 (4,947)
                                                                    --------                --------

Cash flows from investing activities:
    Acquisition of property and equipment                             (2,004)                 (1,817)
    Purchase of short-term investments                                (1,532)                (22,913)
    Maturity of short-term investments                                 3,644                     196
                                                                    --------                --------
          Net cash provided by (used in) investing
              activities                                                 108                 (24,534)
                                                                    --------                --------
Cash flows from financing activities:
    Proceeds from issuance of common stock                               730                  20,945
    Proceeds from issuance of preferred stock, net
       of issuance costs                                                --                     5,055
    Proceeds from borrowings                                             238                    --
    Principal payments on capital lease                                 (288)                   (177)
                                                                    --------                --------

          Net cash provided by financing activities                      680                  25,823
                                                                    --------                --------

Net decrease in cash and cash equivalents                             (8,607)                 (3,658)

Cash and cash equivalents,beginning of period/year                    17,608                   4,311
                                                                    --------                --------
Cash and cash equivalents,end of period/year                           9,001                     653
                                                                    ========                ========
Non-cash investing and financing activities
    Acquisition of equipment under capital leases                   $    178                $    336
                                                                    ========                ========

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

                                                                 5

<PAGE>


                                BROADVISION, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1)    Summary of Significant Accounting Policies

Basis of Presentation

         The accompanying consolidated financial statements include the accounts
of  BroadVision,  Inc. (the  "Company") and its wholly owned  subsidiaries.  All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

Business of the Company

         The  Company  provides  an  integrated  software   application  system,
BroadVision  One-To-One TM, that enables the creation of  applications  allowing
non-technical  business  managers  to  tailor  Internet  marketing  and  selling
services to the needs and interests of individual  World Wide Web site visitors,
personalizing each visit on a real-time basis.

Interim Financial Information

         The accompanying  unaudited  condensed  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 only 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, 1996 has
been derived  from the audited  financial  statements  at that date but does not
include all of the  information  and  footnotes  required by generally  accepted
accounting  principles  for  complete  financial  statements.  The  accompanying
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Prospectus, Forms 10-K and 10-Q, and
other documents filed with the Securities and Exchange Commission  ("SEC").  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 net loss per share is  computed  using net loss  and,  for  periods
prior to the Company's initial public offering ("IPO"), is based on the weighted
average  number of shares of common  stock  outstanding,  convertible  preferred
stock, on an  "as-if-converted"  basis, using the exchange rate in effect at the
initial public offering date and common equivalent shares from stock options and
warrants outstanding using the treasury stock method. In accordance with certain
SEC Staff Accounting Bulletins,  such computations include all common and common
equivalent  shares issued within 12 months of the initial filing date as if they
were  outstanding  for all pre-IPO  periods  presented  using the treasury stock
method and the anticipated initial public offering price. For periods subsequent
to the IPO,  loss per share is based on  weighted  average  shares  outstanding,
excluding the effects of dilutive securities.

                                       6

<PAGE>


Recent Accounting Pronouncements

         The Financial  Accounting  Standards Board recently issued Statement of
Financial  Accounting  Standards  No. 128,  "Earnings  Per Share."  SFAS No. 128
requires the presentation of basic earnings per share ("EPS") and, for companies
with complex  capital  structures or potentially  dilutive  securities,  such as
convertible debt,  options and warrants,  diluted EPS. SFAS No. 128 is effective
for annual and interim  periods  ending after  December  15,  1997.  The Company
expects that basic EPS and diluted EPS will not differ  materially from loss per
share as presented in the accompanying consolidated financial statements.


2)   Balance Sheet Detail

         Property and Equipment

         Property and equipment consisted of the following (in thousands):

                                                      September 30, December 31,
                                                           1997        1996
                                                        (unaudited)
                                                      ------------- ------------
          

         Furniture and fixtures                           $  892      $  539
         Computers and software                            4,521       3,210
         Leasehold improvements                              656         138
                                                          ------      ------
                                                           6,069       3,887
         Less accumulated depreciation and amortization    2,011         863
                                                          ------      ------
                                                          $4,058      $3,024
                                                          ======      ======

         Accrued Expenses

         Accrued expenses consisted of the following (in thousands):

                                                      September 30, December 31,
                                                         1997          1996
                                                      (unaudited)    
                                                      ------------- ------------
                                                                    
         Employee benefits                              $  397        $  254
         Commissions and bonuses                           552           696
         Directors and officers insurance premiums         113           283
         Taxes payable                                     321           129
         Contractor fees                                   179           489
         Other                                             367           675
                                                        ------        ------
                                                        $1,929        $2,526
                                                        ======        ======
                                                  
                                       7

<PAGE>


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

         EXCEPT FOR  HISTORICAL  INFORMATION  CONTAINED  HEREIN,  THE  FOLLOWING
DISCUSSION   CONTAINS   FORWARD-LOOKING   STATEMENTS  WHICH  INVOLVE  RISKS  AND
UNCERTAINTIES.  THE COMPANY'S  ACTUAL  RESULTS COULD DIFFER  SIGNIFICANTLY  FROM
THOSE DISCUSSED HERE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE,  BUT ARE NOT LIMITED TO,  THOSE  DISCUSSED IN THIS FORM 10-Q AND IN THE
COMPANY'S  PROSPECTUS,  FORMS 10-K AND 10-Q, 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  provides  software  application  solutions for  enterprise
class,  personalized business on the global Internet,  Intranets, and Extranets.
These solutions enable companies to rapidly deploy and cost-effectively  operate
secure,  scalable,  intelligent,  and  flexible  electronic  commerce,  customer
self-service,   and  knowledge   management   applications  over  the  Net.  The
BroadVision  One-To-One(TM) application system and One-To-One WebApps(TM) family
of  applications  support  large user and content  databases,  high  transaction
volumes,  intelligent  agent matching,  and seamless  integration  with existing
business systems.  BroadVision applications also incorporate a suite of powerful
management tools that enable non-technical business people to dynamically manage
content  and  control  application  behavior  from their  desktops.  BroadVision
software products are fully integrated with consulting services,  training,  and
technical  support  to  provide  comprehensive,  end-to-end  solutions  for  the
financial services, high technology, retail/distribution, and telecommunications
industries.  BroadVision is headquartered in Los Altos, California and maintains
an extensive  network of subsidiaries and licensed  resellers in North and South
America, Europe and Asia.

         The Company's  revenues are derived from software license fees and fees
for its  services.  The  Company  generally  recognizes  license  fees  when the
software  has  been  delivered,   the  customer  acknowledges  an  unconditional
obligation  to pay, and the Company has no  significant  obligations  remaining.
Professional   services  revenues  generally  are  recognized  as  services  are
performed.  Maintenance  revenues  are  recognized  ratably over the term of the
support period, which is typically one year.

         Since its  inception,  the Company has  incurred  substantial  costs to
research, develop, and enhance its technology and products, to recruit and train
a marketing and sales group, and to establish an administrative organization. As
a result,  the Company has  incurred  net losses in each  fiscal  quarter  since
inception  and, as of September 30, 1997,  had an  accumulated  deficit of $22.6
million.  The Company  anticipates that its operating  expenses will increase in
the  foreseeable  future as it  continues  the  development  of its  technology,
increases  its sales and  marketing  activities,  and  creates  and  expands its
distribution  channels.  Accordingly,  the Company  expects to 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 achieve or sustain
revenue growth or profitability.

         To  date,  only  a  limited  number  of  companies  have  licensed  the
BroadVision One-To-One application system.  Accordingly,  the Company has only a
limited operating  history,  and its prospects must be evaluated in light of the
risks and uncertainties  frequently  encountered by a company in its early stage
of  development.  Some of these  risks and  uncertainties  relate to the

                                       8

<PAGE>


new and rapidly  evolving  nature of the markets in which the Company  operates.
Such  market  risks  include,  among  other  things,  the early  stage of market
development  for online  commerce,  the  dependence of online  commerce upon the
development of the Internet,  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, among other
things,  successfully  implement its marketing strategy,  respond to competitive
developments, continue to develop and upgrade its products and technologies more
rapidly  than its  competitors,  and  commercialize  its  products  and services
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 under the caption "Risk  Factors" and elsewhere in the Company's Form 10-K
filed with the Securities and Exchange Commission (the "SEC").


RESULTS OF OPERATIONS

Revenues

         Total revenues  increased to $7,154,000 in the three-month period ended
September 30, 1997 from  $3,100,000 for the same quarter in fiscal 1996. For the
nine-month  period  ended  September  30,  1997,  total  revenues  increased  to
$18,472,000 from $6,800,000 for the same period in fiscal 1996.

         Software  product  license  revenues  increased to  $5,513,000  for the
three-month period ended September 30, 1997 from $2,074,000 for the same quarter
in fiscal 1996. For the quarter, the software product license revenues consisted
of North American software product license revenues of $2,628,000, or 48% of the
total software  product license  revenues,  and  international  software product
license  revenues of $2,885,000,  or 52% of the total software  product  license
revenues.  For the nine-month period ended September 30, 1997,  software product
license revenues increased to $12,759,000 from $4,737,000 for the same period in
fiscal 1996.  For the nine-month  period ended  September 30, 1997, the software
product license  revenues  consisted of North American  software product license
revenues of $5,221,000,  or 41% of the total software product license  revenues,
and international software product license revenues of $7,538,000, or 59% of the
total  software  product  license  revenues.  The increases in software  product
license  revenues  reflect  the  sale  of  development  licenses  and  web-based
applications of the Company's products, and the recognition of revenues relating
to deployment licenses.  Deployment license revenues increased to $2,802,000 for
the  three-month  period ended  September 30, 1997 from  $1,443,000 for the same
quarter of fiscal 1996.  For the  nine-month  period ended  September  30, 1997,
deployment  revenues increased to $6,458,000 from $1,955,000 for the same period
in fiscal 1996. As of September  30, 1997,  the Company had deployed 27 customer
sites.

         Services  revenues  increased to $1,641,000 for the three-month  period
ended  September 30, 1997 from  $1,026,000  for the same quarter of fiscal 1996.
For the quarter, North American services revenues were $721,000, or 44% of total
services revenues,  and international services revenues were $920,000, or 56% of
total services  revenues.  For the nine-month  period ended  September 30, 1997,
services revenues increased to $5,713,000 from $2,063,000 for the same period in
fiscal 1996.  For the nine-month  period ended  September 30, 1997, the services
revenues consisted of North American services revenues of $2,709,000,  or 47% of
the total services revenues,  and international services revenues of $3,004,000,
or 53% of the total services revenues.  Services revenues increased during these
periods from the respective  prior year periods due to the increasing  number of
licenses of BroadVision One-To-One with a service or maintenance component.

                                       9

<PAGE>


Operating Expenses

         The Company's  operating  expenses have increased  substantially  since
inception.  The Company  believes that continued  expansion of its operations is
essential  to  achieving  its  objectives  and,  therefore,  intends to increase
expenditures in all operating areas.

         Cost of Software Licenses. Cost of software licenses includes the costs
of  royalties  to third  parties for  software  that is embedded  in, or bundled
together and sold with, the Company's  products,  product media and duplication,
and  manuals  and  commissions  payable to  distributors.  The amount of product
royalties  payable  is  generally  related  to the  volume of sales  made by the
Company to its customers.  The amount of commissions  payable to distributors is
related to the distributor  agreement which is generally based on the percentage
of revenue.  Cost of software licenses increased to $460,000 for the three-month
period  ended  September  30, 1997 from  $72,000 for the same  quarter in fiscal
1996.  For the  nine-month  period ended  September  30, 1997,  cost of software
licenses  increased to  $1,098,000  from  $261,000 for the same period in fiscal
1996. The cost of software licenses increased during these periods due to higher
volume of software sales and sales generated from the Company's distributors for
which a commission payable is incurred.

         Cost   of   Services.   Cost  of   services   consists   primarily   of
employee-related  costs  and  fees  for  third-party   consultants  incurred  in
providing  consulting,  post-contract  support,  and training services.  Cost of
services  increased to $1,010,000 for the three-month period ended September 30,
1997 from  $520,000  for the same  quarter in fiscal  1996.  For the  nine-month
period ended September 30, 1997,  cost of services  increased to $3,154,000 from
$1,017,000  for the same period in fiscal 1996. The increase in cost of services
was due to the increasing  number of licenses of BroadVision  One-To-One  with a
support or maintenance  component and the increasing  fixed costs resulting from
the Company's expansion of its services  organization.  The Company expects that
services  costs will  continue to increase  in  absolute  dollar  amounts as the
Company continues to expand its services organization.

         Research and  Development.  Research and development  expenses  consist
primarily of salaries, other employee-related costs, and consulting fees related
to the development of the Company's products.  Research and development expenses
increased by 60% to $2,113,000,  for the three-month  period ended September 30,
1997 from  $1,320,000  for the same quarter in fiscal 1996.  For the  nine-month
period ended September 30, 1997, research and development  expenses increased by
59% to  $5,595,000  from  $3,513,000  for the same period in fiscal 1996.  These
increases  in the  dollar  amount  of  research  and  development  expenses  are
primarily  attributable  to  costs  of  additional  personnel  in the  Company's
research and  development  operations.  The Company  continues to direct product
development  expenditures  toward developing new products and enhancing existing
products.  The Company  anticipates that research and development  expenses will
continue  to  increase  in  absolute  dollars  for the  remainder  of 1997.  All
expenditures  related to research and development have been expensed as incurred
and,  therefore,  no amortization of capitalized  software  development costs is
included.

         Sales and Marketing.  Sales and marketing expenses consist primarily of
salaries  and other  employee-related  costs,  commissions  and other  incentive
compensation,  travel and entertainment, and expenditures for marketing programs
such as  collateral  materials,  trade  shows,  public  relations  and  creative
services.   Sales  and  marketing  expenses  increased  to  $4,630,000  for  the
three-month period ended September 30, 1997 from $3,574,000 for the same quarter
in fiscal 1996. For the nine-month  period ended  September 30, 1997,  sales and
marketing  expenses increased to $13,091,000 from $7,667,000 for the same period
in  fiscal  1996.  These  increases  in sales  and  marketing  expenses  reflect
primarily the hiring of additional sales and marketing personnel, developing and
expanding its sales distribution channels, 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  significantly
in absolute dollars.

                                       10

<PAGE>


         General and Administrative. General and administrative expenses consist
primarily of salaries,  other employee-related  costs, and fees for professional
services.  General and  administrative  expenses  increased  to $763,000 for the
three-month  period ended  September 30, 1997 from $592,000 for the same quarter
in fiscal 1996. For the nine-month period ended September 30, 1997,  general and
administrative  expenses  increased to $2,210,000  from  $1,230,000 for the same
period in fiscal 1996. These increases for general and  administrative  expenses
reflect  primarily  the  hiring  of  additional  administrative  and  management
personnel,   increases  in  the  provision  for  doubtful  accounts,   increased
professional  fees,  and the  addition  of other  infrastructure  to support the
expansion of the Company's  operations.  The Company  expects to continue to add
administrative staff to support broadened operations,  expand North American and
international  office  facilities,  and incur  costs  related  to being a public
company and, therefore,  expects general and administrative expenses to increase
significantly in absolute dollars.

         Prior to its initial  public  offering  ("IPO"),  the Company  recorded
deferred  compensation  for the  difference  between the exercise  price and the
deemed fair value of the Company's Common Stock with respect to 1,794,000 shares
issuable upon exercise of options granted. These amounts were initially recorded
as deferred compensation and will be amortized to cost of services, research and
development,  selling and marketing, and general and administrative expense over
the vesting periods of the options,  generally 60 months.  Deferred compensation
amortized to  compensation  expense  decreased to $104,000 from $134,000 for the
same  quarter in 1996.  For the  nine-month  period  ended  September  30, 1997,
deferred  compensation  amortized to compensation  expense decreased to $331,000
from  $379,000  for  the  same  period  in  fiscal  1996.  The  decrease  in the
amortization  of  deferred  compensation  is due to the  cancellation  of  stock
options for terminated employees. The amortization of deferred compensation will
have an adverse effect on the Company's  reported results of operations  through
the year 2003, but such effect will be  significantly  reduced  beginning in the
third quarter of 2001.


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  under the caption  "Risk  Factors"  and  elsewhere in the
Company's Form 10-K filed with the SEC.

     The Company  expects that a  significant  portion of its  revenues  will be
derived from a limited number of orders, and the timing of receipt,  fulfillment
and  deployment of such orders is likely to cause material  fluctuations  in the
Company's  operating  results,  particularly on a quarterly  basis, as with many
software companies.  Specifically, the Company is taking steps to accelerate the
pace of deployment  which could result in  acceleration  of revenue  recognition
and, consequently,  the potential for greater fluctuation in quarterly operating
results.  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. Due to these 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.

     The  Company   anticipates  that  its  operating   expenses  will  increase
substantially  in the foreseeable  future as it continues the development of its
technology,  increases  its sales and  marketing  activities,  and  creates  and
expands its  distribution  channels.  Accordingly,  the Company expects to 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 achieve or
sustain revenue

                                       11

<PAGE>


growth or  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 stage of development.  Some of
these risks and  uncertainties  relate to the new and rapidly evolving nature of
the markets in which the Company  operates.  Such market  risks  include,  among
other things,  the early stage of market  development for online  commerce,  the
dependence  of  online  commerce  upon  the  development  of the  Internet,  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, among other  things,  successfully
implement its marketing strategy, respond to competitive developments,  continue
to develop and upgrade its  products  and  technologies  more  rapidly  than its
competitors,  and  commercialize its products and services  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  under the
caption "Risk  Factors" and elsewhere in the Company's  Form 10-K filed with the
SEC. 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.


LIQUIDITY AND CAPITAL RESOURCES

     Prior to the IPO, the Company  financed its  operations  primarily  through
private  placements of Common and Preferred  Stock,  which provided net proceeds
totaling  $15.5  million  through  May 1996.  The IPO  yielded  net  proceeds of
approximately   $20.7   million.   At  September  30,  1997,   the  Company  had
approximately  $9.0 million in cash and cash equivalents.  The Company currently
has no significant  capital  commitments  other than commitments under equipment
and operating  leases disclosed in its Form 10-K filed with the SEC. The Company
has entered into a loan and security  agreement with a bank for $3.0 million for
leasehold improvements on the anticipated move to new facilities in late 1997 as
disclosed  in Form 10-K.  The  Company  does not  believe  that it will  require
additional credit facilities for at least the next 12 months however,  there can
be no assurance that the Company will not require additional financing.  If such
financing  is required,  there can be no assurance  that it will be available or
that the Company will obtain favorable terms.

     The  Company   anticipates  that  its  available  cash  resources  will  be
sufficient  to meet  its  presently  anticipated  working  capital  and  capital
expenditure  requirements  for at least the next 12 months.  This  estimate is a
forward-looking  statement  that involves  risks and  uncertainties,  and actual
results may vary as a result of a number of factors,  including  those discussed
under the caption "Risk  Factors" and elsewhere in the Company's Form 10-K filed
with the SEC and those discussed under the caption "Factors Affecting  Operating
Results" above and elsewhere  herein.  The Company may need to raise  additional
funds in  order  to  support  more  rapid  expansion,  develop  new or  enhanced
services, respond to competitive pressures,  acquire complementary businesses or
technologies, or respond to unanticipated requirements.  The Company may seek to
raise additional funds through private or public sales of securities,  strategic
relationships,  bank or lease financings,  or otherwise. If additional funds are
raised through the issuance of equity  securities,  the percentage  ownership of
the  stockholders  of the Company will be reduced,  stockholders  may experience
additional dilution, or such equity securities may have rights,  preferences, or
privileges  senior to those of the holders of the Company's Common Stock.  There
can be no assurance  that  additional  financing will be available on acceptable
terms,  if at all. If adequate  funds are not  available or are not available on
acceptable  terms, the Company may be unable to develop or enhance its products,
take advantage of future  opportunities,  or respond to competitive pressures or
unanticipated  requirements,  which could have a material  adverse effect on the
Company's business, financial condition, and operating results.

                                       12

<PAGE>


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  (SEC  file  number   0-28252)  (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
              above-referenced  registation statement commenced on June 21, 1996
              (the "Offering").

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

         (4)  (i)   The Offering has not 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 Registrant's
                    account in connection with the issuance and  distribution of
                    the Common Stock pursuant to the Offering  (estimates are so
                    indicated):

                    Underwriting discounts and commissions $1,646,000 (estimate)
                    Finders' Fees                                None
                    Expenses paid to or for underwriters         None
                    Other expenses                          1,119,000 (estimate)
                                                           ----------
                              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 (estimates are so indicated):

                    Construction of plant, building
                         and facilities                          None
                    Purchase and installation of machinery
                         and equipment                     $4,046,000 (estimate)
                    Purchase of real estate                      None
                    Acquisition of other business(es)            None
                    Repayment of indebtedness                    None
                    Working capital                        12,233,000 (estimate)

                    Temporary investments:
                         Money market                       1,628,000 (estimate)
                         Certificates of Deposit            2,993,000 (estimate)

                    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.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable

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

<PAGE>

         Not applicable

ITEM 5.  OTHER INFORMATION

         Not applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

              Item     Description
              ----     -----------
              11.1     Statement re: Computation of Net Loss Per Share
              27.1     Financial Data Schedule

                                       13

<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.


                                           BROADVISION, INC


Date: ________________                     _____________________________________
                                           Pehong Chen
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)



Date: ________________                     _____________________________________
                                           Randall C. Bolten
                                           Vice President, Operations and Chief
                                             Financial Officer
                                           (Principal Financial and Accounting 
                                             Officer)

                                       14

<PAGE>


                                BROADVISION, INC.

                                INDEX TO EXHIBITS


Exhibit
  No.                                  Description
-------                                -----------
11.1              Statement regarding Computation of Per Share Earnings . . . . 

27.1              Financial Data Schedule . . . . . . . . . . . . . . . . . . . 
--------------------------------------------------------------------------------

                                       15