<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


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


                                   FORM 10-Q



/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1998



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



                         COMMISSION FILE NUMBER 0-23475


                           INFORMATION ADVANTAGE, INC.
             (Exact Name of Registrant as Specified in Its Charter)


               DELAWARE                                          41-1718445
     (State or other Jurisdiction                             (I.R.S. Employer
  of Incorporation or Organization)                          Identification No.)


                      7905 GOLDEN TRIANGLE DRIVE, SUITE 190
                       EDEN PRAIRIE, MINNESOTA, 55344-7227
          (Address of Principal Executive Offices, including Zip Code)


                                 (612) 833-3700
              (Registrant's Telephone Number, including Area Code)



Check 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 November 30, 1998, there were outstanding 24,840,156 shares of Common
Stock, $ 0.01 par value.

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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I.....................................................................   1

     ITEM 1   FINANCIAL STATEMENTS.........................................   1
     ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS..........................   6
     ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
              MARKET RISK..................................................  15

PART II....................................................................  16

     ITEM 1   LEGAL PROCEEDINGS............................................  16
     ITEM 2   CHANGES IN SECURITIES AND USE OF PROCEEDS....................  16
     ITEM 3   DEFAULTS UPON SENIOR SECURITIES..............................  16
     ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........  16
     ITEM 5   OTHER INFORMATION............................................  16
     ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K.............................  16

SIGNATURES.................................................................  17

EXHIBIT INDEX..............................................................  18


                                      i

<PAGE>

PART I

ITEM 1  FINANCIAL STATEMENTS

                           INFORMATION ADVANTAGE, INC.
                           CONSOLIDATED BALANCE SHEET
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                        OCTOBER 31,       JANUARY 31,
                                                           1998               1998
                                                        ----------      -----------
<S>                                                     <C>             <C>
ASSETS
Current Assets:
     Cash and cash equivalents ........................   $ 17,958       $ 27,765
     Short-term investments ...........................     16,351          9,177
     Accounts receivable net ..........................     19,439         13,256
     Prepaid expenses and other current assets ........      1,539          1,492
     Current deferred tax assets ......................      5,812             --
                                                        ----------      ---------
         Total current assets .........................     61,099         51,690

Furniture and equipment, net ..........................      3,764          3,856
Long-term deferred taxes and other assets .............      3,260          3,700
                                                        ----------      ---------
                                                          $ 68,123       $ 59,246
                                                        ----------      ---------
                                                        ----------      ---------

LIABILITIES AND STOCKHOLDERS'
   EQUITY
Current Liabilities:
     Current portion--long-term liabilities ...........   $    229       $    349
     Accounts payable .................................      2,552          2,200
     Accrued expenses .................................      9,330          4,178
     Deferred revenue .................................      6,489          7,707
                                                        ----------      ---------
         Total current liabilities ....................     18,600         14,434

Long-term liabilities, less current portion ...........        128            743
                                                        ----------      ---------
         Total liabilities ............................     18,728         15,177
                                                        ----------      ---------
Stockholders' equity:
     Common stock, $0.01 par value;
     60,000,000 shares authorized .....................        248            247
     Additional paid-in capital .......................     60,282         59,788
     Accumulated other comprehensive income ...........         78             13
     Accumulated deficit ..............................    (11,213)       (15,979)
                                                        ----------      ---------
        Total stockholders' equity ...................      49,395         44,069
                                                        ----------      ---------
                                                          $ 68,123       $ 59,246
                                                        ----------      ---------
                                                        ----------      ---------
</TABLE>

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

                                  1

<PAGE>

                           INFORMATION ADVANTAGE, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                          OCTOBER 31,                            OCTOBER 31,
                                                   ---------------------------           ---------------------------
                                                     1998               1997               1998               1997
                                                   --------           --------           --------           --------
<S>                                                <C>                <C>                <C>                <C>
Revenues:
     License ....................................  $ 11,230           $  7,592           $ 29,580           $ 20,165
     Services ...................................     7,261              5,662             21,002             15,322
                                                   --------           --------           --------           --------
       Total revenues ...........................    18,491             13,254             50,582             35,487
                                                   --------           --------           --------           --------
Cost of revenues:
     License ....................................       372                350              1,363              1,091
     Services ...................................     3,362              3,026              9,631              8,236
                                                   --------           --------           --------           --------
       Total cost of revenues ...................     3,734              3,376             10,994              9,327
                                                   --------           --------           --------           --------

Gross margin ....................................    14,757              9,878             39,588             26,160
                                                   --------           --------           --------           --------
Operating expenses:
     Sales and marketing ........................     9,682              7,237             25,125             21,210
     Research and development ...................     2,434              2,155              6,712              5,678
     General and administrative .................     1,360              1,628              4,510              4,271
     Merger related expenses ....................     6,502                 --              6,502                 --
                                                   --------           --------           --------           --------
       Total operating expenses .................    19,978             11,020             42,849             31,159
                                                   --------           --------           --------           --------

Loss from operations ............................    (5,221)            (1,142)            (3,261)            (4,999)
                                                   --------           --------           --------           --------
Other income (expense):
     Interest income ............................       377                147              1,195                517
     Interest expense ...........................        (8)               (59)               (28)              (177)
                                                   --------           --------           --------           --------
       Total other income (expense) .............       369                 88              1,167                340
                                                   --------           --------           --------           --------
Loss before provision for income taxes ..........    (4,852)            (1,054)            (2,094)            (4,659)
Provision for (benefit from) income taxes .......    (7,577)               113             (6,860)               258
                                                   --------           --------           --------           --------

Net income (loss) ...............................  $  2,725           $ (1,167)          $  4,766           $ (4,917)
                                                   --------           --------           --------           --------
                                                   --------           --------           --------           --------
Net income (loss) per share:
     Basic ......................................  $   0.11           $  (0.11)          $   0.19           $  (0.48)
                                                   --------           --------           --------           --------
                                                   --------           --------           --------           --------
     Diluted ....................................  $   0.10           $  (0.11)          $   0.18           $  (0.48)
                                                   --------           --------           --------           --------
                                                   --------           --------           --------           --------
</TABLE>

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

                                  2

<PAGE>

                           INFORMATION ADVANTAGE, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDSS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                        NINE MONTHS ENDED
                                                                            OCTOBER 31,
                                                                    ---------------------------
                                                                      1998               1997
                                                                    --------           --------
<S>                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss) ...........................................  $  4,766           $ (4,917)
     Adjustments to reconcile net income (loss) to
       net cash used by operating activities:
       Depreciation and amortization .............................     3,208              2,732
       Deferred taxes ............................................    (7,474)               (40)
       Changes in operating assets and liabilities:
         Accounts receivable .....................................    (6,307)            (2,153)
         Prepaid expenses and other current assets ...............      (256)              (546)
         Accounts payable ........................................       359                390
         Accrued expenses ........................................     5,212                880
         Deferred revenue ........................................    (1,054)             1,380
         Other ...................................................       340               (112)
                                                                    --------           --------
              Net  cash used in operating activities .............    (1,206)            (2,386)
                                                                    --------           --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to furniture and equipment ........................    (1,706)            (2,123)
     Purchase of marketable securities ...........................   (13,152)            (3,671)
     Maturities of marketable securities .........................     6,000                 --
     Payment under note receivable ...............................        --              1,800
     Payment in connection with the acquisition of Skribe
       Software, Inc. ............................................        --               (309)
                                                                    --------           --------
              Net cash used in investing activities ..............    (8,858)            (4,303)
                                                                    --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Borrowings from line of credit ..............................        --              1,685
     Proceeds from long-term liabilities .........................        --                400
     Principle payments on long-term liabilities .................      (251)              (644)
     Proceeds from exercise of stock options .....................       134                338
     Proceeds from exercise of stock purchase warrants and
       ESPP purchase .............................................       361                758
     Proceeds from sale of convertible redeemable
       preferred stock ...........................................        --              6,926
                                                                    --------           --------
             Net cash provided by financing activities ..........        244              9,463
                                                                    --------           --------

Effect of exchange rate on cash ..................................        13                 63
                                                                    --------           --------

Net increase (decrease) in cash and cash equivalents .............    (9,807)             2,837
Cash and cash equivalents, beginning of period ...................    27,765              5,132
                                                                    --------           --------
Cash and cash equivalents, end of period .........................  $ 17,958           $  7,969
                                                                    --------           --------
                                                                    --------           --------

</TABLE>

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

                                  3

<PAGE>


                        INFORMATION ADVANTAGE, INC.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                               (UNAUDITED)

1.   BASIS OF PRESENTATION

     In September 1998, Information Advantage, Inc. (the "Company" or "IA") 
completed a merger with IQ Software Corporation ("IQ") which was accounted 
for as a pooling of interests. The accompanying financial statements have 
been restated to reflect the balance sheets, results of operations and cash 
flows of the companies as if they had been combined from the earliest date 
presented.

     The financial information furnished is unaudited except for the balance 
sheet as of January 31, 1998, which is derived from the audited balance 
sheets of IA and IQ. The unaudited consolidated financial statements as of 
and for the three and nine month periods ended October 31, 1998 and 1997 have 
been prepared on the same basis as the consolidated financial statements for 
the year ended January 31, 1998, and include all adjustments, consisting only 
of normal recurring accruals, which in the opinion of management are 
necessary for the fair presentation of such information for the periods 
presented.

     Certain prior period amounts of IA and IQ have been reclassified to 
conform to fiscal 1999 presentation. These reclassifications had no effect on 
the results of operations or total stockholders' equity as previously 
reported.

     Certain notes normally included in financial statements prepared in 
accordance with generally accepted accounting principles have been omitted. 
These financial statements should be read in conjunction with IA's and IQ's 
audited financial statements and notes thereto for the three years ended 
January 31, 1998, included in each Company's annual reports on Form 10-K. In 
addition, the results of operations for the interim periods presented may not 
be indicative of results for the entire year, and do not include any 
potential synergies which may arise from the combining of the operations of 
the two companies.

2.   NEW ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board issued Statement 
No. 131, "Disclosures about Segments of an Enterprise and Related 
Information" (SFAS No. 131). SFAS No. 131 is effective for annual financial 
statements for periods beginning after December 15, 1997. SFAS No. 131 
establishes standards for disclosures about operating segments, products and 
services, geographic areas and major customers. The Company will adopt SFAS 
No. 131 effective for its annual report for the fiscal year ending January 
31, 1999. Management believes the adoption of SFAS No. 131 will not have a 
material effect on the Company's financial statements.

3.   MERGER RELATED EXPENSES

     In connection with the merger, the Company incurred direct transaction 
and other related expenses of $6,502. Merger related expenses consisted of 
approximately $3,250 of investment banking, legal and professional fees; 
approximately $1,650 of costs to combine and reorganize the operations of IA 
and IQ, principally related to lease terminations and severance; 
approximately $672 of adjustments to write-off certain intangible assets not 
utilized by the combined company; and approximately $930 of other one-time 
merger related expenses.

4.   DEFERRED TAX ASSETS

     During the quarter ended October 31, 1998, the Company reversed 
previously recorded deferred tax valuation allowances and recorded current 
and long-term deferred tax assets of $7,378. Deferred tax assets arise 
primarily from net operating loss carryforwards and other timing differences. 
Based on the successful completion of the merger with IQ and the foundation 
created for current and future profitable operations, management believes 
that it is more likely than not that the deferred tax asset will be fully 
utilized by the Company.

                                      4

<PAGE>

4.   EARNINGS PER SHARE

     A reconciliation of the denominators of the basic and diluted earnings 
per share computations for the three and nine month periods ended October 31 
is presented below:

<TABLE>
<CAPTION>

                                                            THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                OCTOBER 31,                    OCTOBER 31,
                                                        ---------------------------   ---------------------------
                                                            1998          1997            1998           1997
                                                        ------------   ------------   ------------   ------------
<S>                                                     <C>            <C>            <C>            <C>
Net Income (Loss) ..................................    $      2,725   $     (1,167)  $      4,766   $     (4,917)
                                                        ------------   ------------   ------------   ------------
                                                        ------------   ------------   ------------   ------------
Shares Calculation:                                                                                            
     Weighted average basic shares outstanding .....      24,822,895     10,334,640     24,737,161     10,227,771
     Effect of dilutive securities                                                                             
       Options .....................................       1,576,411             --      1,869,570             --
       Warrants ....................................          50,111             --         83,320             --
                                                        ------------   ------------   ------------   ------------
            Total shares used to compare                                                                         
            diluted earnings per share .............      26,449,417     10,334,640     26,690,051     10,227,771
                                                        ------------   ------------   ------------   ------------
                                                        ------------   ------------   ------------   ------------
Net Income (Loss) per Share:                                                                                    
     Basic .........................................    $       0.11   $      (0.11)  $       0.19   $      (0.48)
                                                        ------------   ------------   ------------   ------------
                                                        ------------   ------------   ------------   ------------
     Diluted .......................................    $       0.10   $      (0.11)  $       0.18   $      (0.48)
                                                        ------------   ------------   ------------   ------------
                                                        ------------   ------------   ------------   ------------
</TABLE>
                                      5

<PAGE>

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

     IN SEPTEMBER 1998, INFORMATION ADVANTAGE, INC. (THE "COMPANY" OR"IA") 
COMPLETED ITS MERGER WITH IQ SOFTWARE CORPORATION ("IQ"), WHICH WAS ACCOUNTED 
FOR AS A POOLING OF INTERESTS. THE FOLLOWING DISCUSSION AND ANALYSIS 
DESCRIBES CERTAIN FACTORS AFFECTING THE CONSOLIDATED RESULTS OF OPERATIONS OF 
THE COMPANY FOR THE THREE AND NINE MONTH PERIODS ENDED OCTOBER 31, 1998 AND 
ITS FINANCIAL CONDITION AS OF OCTOBER 31, 1998. THIS DISCUSSION AND ANALYSIS 
SHOULD BE READ IN CONJUNCTION WITH THE ANNUAL REPORTS ON FORM 10-K FOR THE 
FISCAL YEAR ENDED JANUARY 31, 1998 OF IA AND IQ, AND THE JOINT PROXY 
STATEMENT OF IA AND IQ DATED AUGUST 21, 1998.

     CERTAIN OF THE STATEMENTS IN THE FOLLOWING DISCUSSION CONSTITUTE 
FORWARD-LOOKING STATEMENTS WHICH ARE MADE PURSUANT TO THE SAFE HARBOR 
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. VARIOUS 
FACTORS MAY CAUSE ACTUAL RESULTS OF OPERATIONS AND FINANCIAL CONDITION TO 
VARY SIGNIFICANTLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENT MADE 
HEREIN OR IN OTHER REPRESENTATIONS MADE BY THE COMPANY'S MANAGEMENT OR BY 
OTHERS ON BEHALF OF THE COMPANY. PLEASE REFER TO THE ANNUAL REPORTS ON FORM 
10-K FOR THE FISCAL YEAR ENDED JANUARY 31, 1998 OF IA AND IQ, AND THE JOINT 
PROXY STATEMENT OF IA AND IQ, DATED AUGUST 21, 1998 FOR A DESCRIPTION OF THE 
FACTORS KNOWN TO THE COMPANY THAT MAY CAUSE ACTUAL RESULTS TO VARY.

OVERVIEW

     Information Advantage, Inc. develops, markets and supports enterprise 
scalable on-line, analytical processing (OLAP) software that is designed to 
allow a large number of users to access and analyze large amounts of data to 
make quicker and more informed business decisions. The Company's server-based 
solution, DecisionSuite, provides powerful, robust and flexible analysis 
processing capabilities that transform raw data into meaningful information 
from a wide range of desktop and Internet platforms. Through the use of an 
advanced architecture, the Company designed DecisionSuite to accommodate 
terabytes of data and thousands of active users. DecisionSuite enables 
organizations to push effective decision making to all levels of users 
thereby creating an "intelligent enterprise," one capable of quickly 
identifying and reacting to market opportunities. DecisionSuite supports many 
UNIX operating systems and employs relational database technology, allowing 
it to access most popular databases, data warehouses and data marts. In 
addition to DecisionSuite, the Company develops, markets and supports a suite 
of business intelligence software products for data access, analysis, ad hoc 
query and reporting designed to facilitate decision support.

     In September 1998, the Company formally introduced its first intranet 
portal to business intelligence, MyEureka! MyEureka! applies the concepts of 
personalized Internet portal sites, such as My Yahoo! or Excite, to offer 
users an up-to-the-minute view of their organization's decision-making 
information. This product represents the completion of the first phase of 
integration of the IA and IQ product lines.

     License revenues are derived from one-time licenses for the right to use 
the Company's products in perpetuity and are determined on a per server, per 
named user and database size basis. The Company's service revenues, which 
have accounted for approximately 40% of the Company's total revenues for the 
past three years, include fees for maintenance, training and consulting 
services. The Company anticipates that service revenues will continue to 
account for a significant portion of the Company's total revenues.

     The American Institute of Certified Public Accountants has approved 
Statement of Position (SOP) 97-2, effective for transactions entered into 
after December 15, 1997, which supersedes SOP 91-1, "Software Revenue 
Recognition." Management has adopted this new statement and has determined 
that its adoption has not had a material effect on the timing of the 
Company's revenue recognition or caused changes to its revenue recognition 
policies.

         Revenues derived from software licenses are recognized upon 
execution of a license agreement, delivery of the software product and 
fulfillment of other delivery requirements. Revenues from software provided 
for demonstration or pilot purposes are not recognized until execution of a 
license agreement and fulfillment of other delivery requirements. Revenues 
derived from maintenance contracts, which are bundled with the initial 
licenses, and all revenues from extended maintenance contracts are deferred 
and recognized ratably over the term of the maintenance contract. Revenues 
from maintenance contracts are included in service revenues. Revenues from 
training and consulting services are recognized as the services are performed.

                                      6

<PAGE>

     The Company licenses software through its direct sales force and through 
or  in conjunction with solution development partners, sales affiliates and 
marketing partners. Revenues from indirect sales involving strategic partners 
accounted for approximately 20.9% and 31.1% of the Company's license revenues 
for the quarters ended October 31, 1998 and 1997, and 21.0% and 33.6% for the 
nine month periods ended October 31, 1998 and 1997. The Company intends to 
expand its strategic relationships, thereby increasing the revenues generated 
from indirect channels as a percentage of total license revenues. The Company 
intends to expand its international operations and has committed, and 
continues to commit, significant management time and financial resources to 
developing direct and indirect international sales and support channels. The 
Company has international sales and support offices in Toronto, Canada; 
London, England; Paris, France; Cologne, Germany; and Melbourne, Australia. 
To date, most of the Company's international revenues have been derived from 
the United Kingdom and Canada.

     Although the Company's personnel related costs are higher in Europe than 
they are in the United States, and the Company's international operations are 
subject to economic, fiscal and monetary policies of foreign governments, to 
date, these factors have not had a material effect on the Company's results 
of operations or liquidity. In addition, because all of the Company's sales 
have been denominated in U.S. dollars, the Company has been able to minimize 
the impact of foreign exchange rate changes. There can be no assurance that 
the Company will be able to continue to denominate foreign sales in U.S. 
dollars or that international operations'costs and economic, fiscal and 
monetary policies of foreign governments will not in the future have a 
material adverse effect on the Company's results of operations or liquidity.

     The Company continues to make significant strategic investments in 
building an infrastructure to support long-term growth. The Company has 
increased its headcount from 226 at January 31, 1995 to 419 at October 31, 
1998, reflecting personnel increases throughout the Company and personnel 
increases due to the merger with IQ. As a result, although the Company's 
revenues have increased in each of the last eleven quarters, the Company 
incurred net losses in each quarter prior to the beginning of fiscal 1999, 
and had an accumulated deficit of $11.2 million as of October 31, 1998.

     The Company's limited consolidated operating history makes the 
prediction of future operating results difficult and unreliable. In addition, 
given its limited combined operating history and recent rapid growth, 
historical growth rates in the Company's revenues should not be considered 
indicative of future revenue growth rates or operating results. There can be 
no assurance that any of the Company's business strategies will be successful 
or that the Company will be able to achieve profitability on a consistent 
quarterly or annual basis.

                                      7

<PAGE>

QUARTERLY RESULTS OF OPERATIONS

     The following table sets forth certain unaudited consolidated statement 
of operations data for the eight fiscal quarters ended October 31, 1998, as 
well as such data expressed as a percentage of the Company's total revenues 
for those periods. All data reflects the merger with IQ which was accounted 
for as a pooling of interests. This data has been derived from unaudited 
combined financial statements that, in the opinion of management, include all 
adjustments (consisting only of normal recurring adjustments) and conforming 
reclassifications necessary for a fair presentation of such information when 
read in conjunction with the consolidated financial statements and notes 
thereto.

<TABLE>
<CAPTION>
                                                                        QUARTER ENDED

                                  JAN. 31     APR. 30     JUL. 31     OCT. 31     JAN. 31   APR. 30     JUL. 31      OCT. 31
                                    1997       1997         1997        1997       1998       1998        1998        1998
                                 --------    --------    --------    --------    --------   --------    --------    ---------
<S>                              <C>         <C>         <C>         <C>         <C>        <C>         <C>         <C>
REVENUE:
   Licenses ...................  $  5,746    $  5,940    $  6,632    $  7,592    $  8,805   $  8,621    $  9,729    $  11,230
   Services and maintenance ...     3,503       4,386       5,274       5,662       6,003      6,650       7,091        7,261
                                 --------    --------    --------    --------    --------   --------    --------    ---------
      Gross revenue ...........     9,249      10,325      11,906      13,254      14,808     15,271      16,820       18,491


COST OF REVENUE:
   License ....................       410         304         437         350         473        504         487          372
   Services ...................     1,923       2,422       2,788       3,026       2,876      3,153       3,116        3,362
                                 --------    --------    --------    --------    --------   --------    --------    ---------
      Cost of Revenue .........     2,333       2,726       3,226       3,376       3,349      3,657       3,603        3,734
                                 --------    --------    --------    --------    --------   --------    --------    ---------
      Gross Margin ............     6,917       7,599       8,681       9,878      11,459     11,614      13,217       14,757

OPERATING EXPENSES
   Sales and marketing 
     expenses .................     7,017       6,882       7,092       7,237       7,287      7,199       8,244        9,682
   Software development costs .     1,571       1,645       1,877       2,155       1,904      2,083       2,195        2,434
   General and administrative .     1,434       1,265       1,377       1,628       1,812      1,579       1,571        1,360
   Merger related expenses ....        --          --          --          --          --         --          --        6,502
                                 --------    --------    --------    --------    --------   --------    --------    ---------
      Total Operating 
       Expenses ...............    10,022       9,793      10,346      11,020      11,003     10,861      12,010       19,978
                                 --------    --------    --------    --------    --------   --------    --------    ---------

   Operating Income (Loss) ....    (3,105)     (2,194)     (1,666)     (1,142)        456        753       1,207       (5,221)

OTHER INCOME (EXPENSE)
   Interest income ............       143         125         209         147         236        412         406          377
   Interest expense ...........       (63)        (23)        (58)        (59)        (70)       (12)         (8)          (8)
                                 --------    --------    --------    --------    --------   --------    --------    ---------

      Total Other Income
        (Expense) .............       80          102         151          88         166        400         398          369
                                 --------    --------    --------    --------    --------   --------    --------    ---------

INCOME (LOSS) BEFORE INCOME
TAX PROVISION (BENEFIT) .......    (3,025)     (2,092)     (1,515)     (1,054)        622      1,153       1,605       (4,852)

INCOME TAX PROVISION
   (BENEFIT) ..................      (158)         45         100         113         248        325         392       (7,577)
                                 --------    --------    --------    --------    --------   --------    --------    ---------
NET INCOME (LOSS) .............  $ (2,867)   $ (2,137)   $ (1,615)   $ (1,167)   $    374   $    828    $  1,213    $   2,725
                                 --------    --------    --------    --------    --------   --------    --------    ---------
                                 --------    --------    --------    --------    --------   --------    --------    ---------

UNAUDITED NET INCOME (LOSS)
   PER SHARE
   Basic ......................     (0.28)      (0.21)      (0.16)      (0.11)       0.02       0.03        0.05         0.11
   Diluted ....................     (0.28)      (0.21)      (0.16)      (0.11)       0.02       0.03        0.04         0.10

SHARES USED IN COMPUTING
   NET INCOME (LOSS) PER SHARE
   Basic ......................    10,171      10,171      10,178      10,335      17,436     24,666      24,723       24,823
   Diluted ....................    10,171      10,171      10,178      10,335      19,140     26,644      26,976       26,449
</TABLE>

                                        8
<PAGE>

<TABLE>

AS A PERCENTAGE OF TOTAL 
  REVENUE:
<S>                              <C>           <C>          <C>          <C>          <C>          <C>          <C>          <C>
REVENUE:
    Licenses ..................     62%          58%          56%          57%          59%          56%          58%          61%
    Services and maintenance ..     38           42           44           43           41           44           42           39
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
       Total Revenue ..........    100          100          100          100          100          100          100          100

COST OF REVENUE:
    License ...................      4            3            4            3            3            3            3            2
    Services ..................     21           23           23           23           19           21           19           18
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
       Cost of Revenue .......,     25           26           27           26           22           24           22           20
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
       Gross Margin ..........,     75           74           73           74           78           76           78           80

PERATING EXPENSES
    Sales and marketing 
      expenses ................     76           67           60           55           49           47           49           52
    Software development 
      costs ...................     16           16           16           16           13           14           13           13
    General and 
      administrative ..........     15           12           12           12           12           10            9            7
    Merger related expenses ...      0            0            0            0            0            0            0           35
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
       Total Operating 
         Expenses .............    107           95           88           83           74           71           71          107
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
    Operating Income (Loss) ...    (34)         (21)         (15)          (9)           4            5            7          (27)

OTHER INCOME (EXPENSE)
    Interest income ...........      2            1            2            1            2            3            2            2
    Interest expense ..........     (1)          (0)          (0)          (0)          (0)          (0)          (0)          (0)
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
       Total Other Income 
         (Expense) ............      1            1            2            1            2            3            2            2
                                  -----        -----        -----        -----        -----        -----        -----         ---- 

INCOME (LOSS) BEFORE INCOME TAX
    PROVISION (BENEFIT) ........   (33)         (20)         (13)          (8)           6            8            9          (25)
                                  -----        -----        -----        -----        -----        -----        -----         ---- 

INCOME TAX PROVISION (BENEFIT)..    (2)           0            1            1            2            2            2          (41)

NET INCOME (LOSS) ..............   (31%)        (20%)        (14%)         (9%)          4%           6%           7%          16%
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
                                  -----        -----        -----        -----        -----        -----        -----         ---- 
</TABLE>

                                      9

<PAGE>

RESULTS OF OPERATIONS

     The following table sets forth certain statement of operations data as a
percentage of total revenues for the three and nine month periods ended October
31:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED         NINE MONTHS ENDED
                                                            OCTOBER 31,                OCTOBER 31,
                                                       ---------------------       -------------------
                                                        1998           1997         1998          1997
                                                       ------         ------       ------        -----
<S>                                                     <C>           <C>           <C>          <C>
Revenues
     License .........................................   60.7%         57.3%         58.5%         56.8%
     Service .........................................   39.3          42.7          41.5          43.2
                                                       ------         ------       ------        ------
         Total revenues ..............................  100.0         100.0         100.0         100.0
                                                       ------         ------       ------        ------
Cost of Revenues:
     License .........................................    2.0           2.6           2.7           3.1
     Service .........................................   18.2          22.8          19.0          23.2
                                                       ------         ------       ------        ------
         Total cost of revenues ......................   20.2          25.4          21.7          26.3
                                                       ------         ------       ------        ------
Gross margin .........................................   79.8          74.6          78.3          73.7
                                                       ------         ------       ------        ------
Operating expenses:
     Sales and marketing .............................   52.4          54.6          49.7          59.8
     Research and development ........................   13.2          16.3          13.3          16.0
     General and administrative ......................    7.4          12.3           8.9          12.0
     Merger related expenses .........................   35.2          --            12.9          --
                                                       ------         ------       ------        ------
         Total operating expenses ....................  108.2          83.2          84.8          87.8
                                                       ------         ------       ------        ------

Loss from operations .................................  (28.4)         (8.6)         (6.5)        (14.1)
Interest income, net .................................    2.0           0.7           2.3           1.0
                                                       ------         ------       ------        ------
Loss before provision for (benefit from) income
     taxes ...........................................  (26.4)         (7.9)         (4.2)        (13.1)
Provision for (benefit from) income taxes ............  (41.0)          0.9         (13.6)          0.7
                                                       ------         ------       ------        ------
Net income (loss) ....................................   14.6%         (8.8)%         9.4%        (13.8)%
                                                       ------         ------       ------        ------
                                                       ------         ------       ------        ------
</TABLE>

                                     10

<PAGE>

     The following table sets forth, for each component of revenues, the 
gross margin associated with such components of revenues for the three and 
nine month periods ended October 31:

<TABLE>
<CAPTION>

                          THREE MONTHS ENDED          NINE MONTHS ENDED
                              OCTOBER 31,                  OCTOBER 31,
                        --------------------          --------------------
                         1998           1997           1998           1997
                        ------         ------         ------         ------
<S>                     <C>            <C>            <C>            <C>
Gross Margin:
     License ........... 96.7%          95.4%          95.4%          94.6%
     Service ........... 53.7           46.6           54.1           46.2

</TABLE>

REVENUES

     LICENSE. License revenues are recognized upon execution of a license 
agreement and shipment of the product if no other significant obligations 
remain and collection of the resulting receivable is probable. License 
revenues increased 47.9%, to $11.2 million from $7.6 million, between the 
three months ended October 31, 1998 and 1997, and 46.7%, to $29.6 million 
from $20.2 million, between the nine months ended October 31, 1998 and 1997. 
The increase in the Company's license revenues in each period was 
attributable primarily to greater market acceptance of DecisionSuite, 
Objects, Vision and SAP Server software which led to an increase in volume, 
an increase in the average revenues derived from each license as the average 
number of seats per customer increased, and an increase in sales headcount. 
These increases were off-set, to a much lesser extent, by reduced market 
acceptance of the Company's older Legacy products. To date, price increases 
have not had a significant impact on revenues. The Company does not believe 
that the historical percentage growth rates of license revenues will be 
sustainable or are indicative of future results.

     SERVICE. Service revenues include fees from maintenance contracts, 
training, training materials and consulting services. Fees for maintenance, 
training, training materials and consulting services are generally charged 
separately from product licenses. Maintenance fees are for ongoing support 
and product updates, and are recognized ratably over the life of the 
contract. Revenues from training are recognized upon completion of the 
related training class. Revenues from training materials are recognized upon 
shipment or upon provision of the materials to attendees of training classes. 
Consulting revenues are recognized when the services are performed. Service 
revenues increased 28.2%, to $7.3 million from $5.7 million, between the 
quarters ended October 31, 1998 and 1997, and increased 37.1%, to $21.0 
million from $15.3 million, between the nine months ended October 31, 1998 
and 1997. Service revenues accounted for 39.3% and 42.7% of the Company's 
total revenues for the three months ended October 31, 1998 and 1997, and 
41.5% and 43.2% for the nine month periods ended October 31, 1998 and 1997. 
In particular, maintenance revenues accounted for 40.1% and 35.8% of service 
revenues for the quarters ended October 31, 1998 and 1997, and 39.2% and 
38.2% of service revenues for the nine months ended October 31, 1998 and 
1997. The Company anticipates that service revenues will continue to account 
for a significant percentage of the Company's total revenues and that 
revenues from maintenance will increase as a percentage of service revenues 
as additional licenses are sold.

     INTERNATIONAL REVENUES. International revenues include all revenues 
other than from the United States. International revenues from the Company's 
direct sales organizations in Europe and export sales to or through strategic 
partners in Europe and other areas outside of the United States accounted for 
19.5% and 18.0% of total revenues for the quarters ended October 31, 1998 and 
1997, and 21.1% and 20.4% of total revenues for the nine months ended October 
31, 1998 and 1997. The Company expects that international license and related 
service revenues will continue to account for a significant portion of its 
total revenues in the future.

                                     11

<PAGE>

COST OF REVENUES

     LICENSE. Cost of license revenues consists primarily of salaries, 
royalties, product packaging and shipping costs. Cost of license revenues was 
$372,000 and $350,000 for the quarters ended October 31, 1998 and 1997, 
representing 3.3% and 4.6% of license revenues for these periods. For the 
nine months ended October 31, 1998 and 1997, cost of license revenues was 
$1.4 million and $1.1 million, representing 4.6% and 5.4% of license revenues 
for these periods. The decrease in cost of license revenues as a percentage 
of license revenue between the nine month periods ended October 31, 1998 and 
1997 reflects economies of scale associated with increased sales of 
multiple-seat user licenses.

     SERVICE. Cost of service revenues consists primarily of 
personnel-related and facilities costs incurred in providing customer 
support, training and consulting services, as well as third-party costs 
incurred in providing training and consulting services. Cost of service 
revenues was $3.4 million and $3.0 million for the quarters ended October 31, 
1998 and 1997, and $9.6 million and $8.2 million for the nine months ended 
October 31, 1998 and 1997, representing 49.0%, 51.8%, 45.9% and 52.1%, of 
service revenues for these periods. The decrease in cost of service revenues 
as a percentage of service revenues for the three and nine month periods 
ended October 31, 1998 and 1997 was primarily due to increased productivity 
from a significant number of newly hired training, support and consulting 
personnel, and improved economies of scale of the technical support center.

OPERATING EXPENSES

     SALES AND MARKETING. Sales and marketing expenses consist primarily of 
salaries, commissions and bonuses earned by sales and marketing personnel, 
field office expenses, travel and entertainment and promotional expenses. 
Sales and marketing expenses were $9.7 million and $7.2 million for the 
quarters ended October 31, 1998 and 1997, and $25.1 million and $21.2 million 
for the nine months ended October 31, 1998 and 1997, respectively. The 
increase in sales and marketing expenses in each period was primarily due to 
the hiring of additional sales and marketing personnel and, to a lesser 
extent, the increase in the number of sales offices. In addition, the Company 
increased its marketing efforts during the quarter ended October 31, 1998 in 
order to inform and educate the market about the Company's new product 
offerings. Sales and marketing expenses represented 52.4% and 54.8% of total 
revenues for the quarters ended October 31, 1998 and 1997, and were 49.7% and 
59.8% for the nine month periods ended October 31, 1998 and 1997.

     The Company expects that sales and marketing expenses will increase as 
the Company continues to hire additional sales and marketing personnel, 
establish additional sales offices and increase promotional activities.

     RESEARCH AND DEVELOPMENT. Research and development expenses consist 
primarily of salaries and benefits of software engineering personnel, 
payments to contract programmers and expendable equipment purchases. The 
Company believes that a significant level of investment for research and 
development is required to remain competitive. Research and development 
expenses were $2.4 million and $2.2 million for the quarters ended October 
31, 1998 and 1997, and $6.7 million and $5.7 million for the nine months 
ended October 31, 1998 and 1997. The increase for each period was primarily 
attributable to additional hiring of research and development personnel. The 
Company anticipates that it will continue to devote substantial resources to 
research and development and that these expenses will increase in future 
periods.

     GENERAL AND ADMINISTRATIVE. General and administrative expenses were $1.4
million and $1.6 million for the quarters ended October 31, 1998 and 1997, and
$4.5 million and $4.3 million for the nine months ended October 31, 1998 and
1997. The increase between the nine month periods was predominantly due to
increased staffing and, to a lesser extent, associated expenses necessary to
manage and support the Company's increased scale of operations. General and
administrative expenses represented 7.4% and 12.3% of total revenues for the
quarters ended October 31, 1998 and 1997, and 8.9% and 12.0% for the nine months
ended October 31, 1998 and 1997. The Company believes that its general and
administrative expenses will increase in future periods as a result of an
anticipated expansion of the Company's administrative staff to support its
growing operations.

     MERGER RELATED EXPENSES. In connection with the merger, the Company
incurred direct transaction and other 

                                       12

<PAGE>

related expenses of $6,502,000. Merger related expenses consisted of 
approximately $3,250,000 of investment banking, legal and professional fees; 
approximately $1,650,000 of costs to combine and reorganize the operations of 
Information Advantage, Inc. and IQ Software Corporation, principally related 
to lease terminations and severance; approximately $670,000 of adjustments to 
write-off certain intangible assets not utilized by the combined company; and 
approximately $930,000 of other one-time merger related expenses.

     INTEREST INCOME. Interest income represents earnings on the Company's 
cash, cash equivalents and short-term investments. Interest income was 
$377,000 and $147,000 for the quarters ended October 31, 1998 and 1997, and 
$1,195,000 and $517,000 for the nine months ended October 31, 1998 and 1997.

     INTEREST EXPENSE. Interest expense represents interest on long-term debt 
and capitalized leases, and totaled $8,000 and $59,000 for the three months 
ended October 31, 1998 and 1997, and $28,000 and $177,000 for the nine months 
ended October 31, 1998 and 1997.

     PROVISION FOR (BENEFIT FROM) INCOME TAXES. The Company accounts for 
income taxes in accordance with Statement of Financial Accounting Standards 
No. 109, "Accounting for Income Taxes." During the quarter ended October 31, 
1998, the Company reversed prior period valuation allowances against its 
deferred tax assets, resulting in a net tax benefit of $7,378,000. Based on 
the successful completion of the merger with IQ and the foundation created 
for current and future profitable operations, management believes that it is 
more likely than not that the deferred tax asset will be fully utilized by 
the Company. At October 31, 1998, the Company had approximately $17.8 million 
in federal net operating loss carryforwards, which will begin to expire in 
the year 2007 if not utilized. In addition, the Tax Reform Act of 1986 
contains certain provisions that may limit the net operating loss 
carryforwards available for use in any given period upon the occurrence of 
certain events, including a significant change in ownership interests.

RECENTLY ISSUED ACCOUNTING STANDARDS

     In June 1997, the Financial Accounting Standards Board also issued 
Statement No. 131, "Disclosures about Segments of an Enterprise and Related 
Information" (SFAS No. 131). SFAS No.131 is effective for annual financial 
statements for periods beginning after December 15, 1997. SFAS No. 131 
establishes standards for disclosures about operating segments, products and 
services, geographic areas and major customers. Management believes the 
adoption of SFAS No. 131 will not have a material effect on the Company's 
financial statements.

LIQUIDITY AND CAPITAL RESOURCES

     OPERATING ACTIVITIES. Net cash used in operating activities was $1.2 
million and $2.4 million for the nine months ended October 31, 1998 and 1997. 
During the nine months ended October 31, 1998, cash used in operating 
activities included $6.3 million in additional accounts receivable and the 
recognition of a $7.5 million tax benefit. Resulting in an increase cash were 
net income of $4.8 million, plus an increase in accounts payable and accrued 
expenses of $5.6 million, a $1.1 million decrease in deferred revenue, and 
noncash depreciation and amortization expense of $3.2 million. During the 
nine months ended October 31, 1997, cash used in operating activities 
resulted primarily from net operating losses of $4.9 million, and a $2.2 
million increase in accounts receivable, partially offset by $2.7 million 
noncash depreciation and amortization expense, a $1.4 million decrease in 
deferred revenue, and an increase in accounts payable and accrued expenses of 
$1.3 million.

     INVESTING ACTIVITIES. Net cash of $8.9 million used in investing 
activities during the nine months ended October 31, 1998 was composed of 
$13.2 million for the acquisition of short-term investments and $1.7 million 
in purchases of fixed assets and capitalized software costs, partially offset 
by the maturities of $6.0 million in short-term investments. Net cash used in 
investing activities of $4.3 million during the nine months ended October 31, 
1997 included $3.7 million for the purchase of marketable securities, and 
purchases of $2.1 million in fixed assets and capitalized software costs, 
partially offset by the repayment of a $1.8 million note receivable.

     FINANCING ACTIVITIES. Net cash provided by financing activities during 
the nine months ended October 31, 1998 consisted of $495,000 in proceeds from 
the exercise of stock options and purchase of shares of common stock under 
the Company's employee stock purchase plan, partially offset by $251,000 in 
principal payments on capital leases. Net 

                                     13
<PAGE>

cash provided by financing activities during the nine months ended October 
31, 1997 of $9.5 million was generated principally by $6.9 million from the 
sale of preferred stock and $1.1 million in other stock purchases, partially 
offset by $644,000 in principal payments on capital leases.

     COMMITMENTS AND BORROWING CAPACITY. As of October 31, 1998, the Company 
had no material commitments for capital expenditures.

     The Company's revolving credit line of $2.0 million expired in September 
1998, and is currently under renegotiation. There were no amounts outstanding 
under this facility as of October 31, 1998.

     Total borrowings under the revolving credit line were limited generally 
to the lesser of 70% of eligible accounts receivable or $2.0 million. The 
Company's line of credit contained certain financial covenants and 
restrictions as to various matters including the Company's ability to pay 
cash dividends and effect mergers or acquisitions without the bank's prior 
approval. The Company was currently in compliance with such financial 
covenants and restrictions. The Company granted a first priority security 
interest in substantially all of its assets as security for its obligations 
under its credit line. The Company believes that this line will be replaced 
at similar or more favorable terms.

     The Company believes that the net proceeds from the December 1997 
initial public offering and its existing cash, cash equivalents and 
short-term investments will be adequate to meet its cash needs for at least 
the next 12 months. Thereafter, the Company may require additional funds to 
support its working capital requirements or for other purposes and may seek 
to raise such additional funds through public or private equity financing or 
from other sources. There can be no assurance that additional financing will 
be available at all or that, if available, such financing will be obtainable 
on terms favorable to the Company or will not be dilutive.

     MERGER PROCEEDINGS. On June 29, 1998, IA announced its intent to merge 
with IQ, subject to shareholder approval. The transaction was accounted for 
as a pooling of interests. The merger was completed on September 24, 1998. 
Merger related transaction costs of approximately $6.5 million were charged 
to operations when incurred.

YEAR 2000 READINESS DISCLOSURE

     Many currently installed computer systems and software products are 
coded to accept only 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 approximately one 
year, computer systems and software used by many companies may need to be 
upgraded to comply with such "Year 2000" requirements.

     The Company is presently assessing its Year 2000 readiness for 
operations worldwide, focusing on critical operating and applications 
systems, particularly the Year 2000 compliance of: (i) the product lines, 
(ii) the key software/hardware vendors, and (iii) the financial accounting 
systems of the newly combined Company.

     Although the Company believes that its products are Year 2000 compliant, 
management believes that the purchasing patterns of customers and potential 
customers may be affected as companies expend a significant portion of their 
limited information technology 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 result in a material adverse effect on the 
Company's business, operating results and financial condition.

     The Company is currently performing a compliance survey of its critical 
vendors, although management presently has little information concerning 
their Year 2000 compliance status. In the event that any such key suppliers 
do not achieve Year 2000 compliance in a timely manner, or at all, the 
Company's business or operations could be adversely affected.

     The Company uses outside vendors to supply its most significant 
financial accounting software. Management believes its current accounting 
software package is Year 2000 compliant. However, in the normal course of 
business, the Company has undertaken a search for a financial accounting 
software package to replace its existing system. A 

                                     14

<PAGE>

critical attribute of the system ultimately selected will be compliance with 
Year 2000 requirements. The cost of replacing the existing financial software 
is not anticipated to exceed $250,000.

     As a part of its Year 2000 assessment, the Company intends to 
demonstrate its Year 2000 readiness by simulating the Year 2000 in an 
orchestrated manner for its key infrastructure components, critical business 
processes and key applications systems. The Company expects that minor Year 
2000 compliance issues will be identified as an outcome of the Year 2000 
simulation test and intends to address these compliance issues no later than 
the second quarter of calendar 1999.

     The Company recognizes the need for Year 2000 contingency plans in the 
event that remediation is not fully successful or that the remediation 
efforts of its vendors, suppliers and governmental/regulatory agencies are 
not timely completed. The Company intends to address contingency planning 
during calendar 1999.

     The Company intends to complete its Year 2000 remediation efforts 
primarily with in-house resources, but will utilize consultants should the 
need arise. The Company believes that the costs of Year 2000 remediation 
described above will not be material and can be funded from operations.

     The Company recognizes that issues related to Year 2000 constitute a 
material known uncertainty. The Company also recognizes the importance of 
ensuring its operations will not be adversely affected by Year 2000 issues. 
It believes that the processes described above will be effective to manage 
the risks associated with the problem. However, there can be no assurance 
that the processes can be completed on the timetable described above or that 
remediation will be fully effective. The failure to identify and remediate 
Year 2000 issues, or the failure of customers, key vendors or other critical 
third parties who do business with the Company to timely remediate their Year 
2000 issues could cause system failures or errors, business interruptions 
and, in a worst case scenario, the inability to engage in normal business 
practices for an unknown length of time. The effect on the Company's 
operations, income and financial condition could be materially adverse.

ITEM 3    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       Not applicable.

                                     15

<PAGE>

PART II

ITEM 1    LEGAL PROCEEDINGS

     The Company is not currently subject to any material legal proceeding.

ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS

     From the effective date of the Registration Statement on Form S-1 
through October 31, 1998, the Company had used approximately $3.3 million of 
the net proceeds from its initial public offering for the repayment of 
indebtedness, and $1,250,000 for the purchase of furniture and equipment.

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     (a)  A Special Meeting of Stockholders was held on September 23, 1998.

     (b)  Not applicable.

     (c)  One proposal was submitted for stockholder approval at the Special
          Meeting of Stockholders which passed with voting results as follows:

          To approve the issuance of shares of Information Advantage, Inc.
          Common Stock to the stockholders of IQ Software Corporation, a Georgia
          corporation, pursuant to the terms of an Agreement and Plan of Merger,
          as amended, dated as of June 29, 1998, by and among Information
          Advantage, Inc., IQ Software Corporation and IAC Merger Corp., a
          Georgia corporation and wholly-owned subsidiary of Information
          Advantage, Inc.

<TABLE>
          <S>             <C>                     <C>                  <C>
          FOR             12,367,435              ABSTAIN              4,200
          AGAINST              4,720              BROKER NON-VOTE          0
</TABLE>


     (d)  Not applicable.

ITEM 5    OTHER INFORMATION

     Not applicable.

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibit 27.1 - Financial Data Schedule

     (b)  Reports on Form 8-K

          (1)  The Company's Current Report on Form 8-K filed on September 25,
               1998, relating to the Company's merger with IQ Software
               Corporation, a Georgia corporation.

                                       16

<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 on December 14, 1998.



                                        INFORMATION ADVANTAGE, INC.



                                        By:  /s/ Larry J. Ford
                                            ----------------------------
                                                 Larry J. Ford
                                                 President and Chief
                                                   Executive Officer



                                        By:  /s/ Donald W. Anderson
                                            ----------------------------
                                                 Donald W. Anderson
                                                 Chief Financial Officer



                                       17

<PAGE>


EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit
Number            Description
-------           -----------
<S>               <C>

27.1              Financial Data Schedule

</TABLE>






















                                       18