<PAGE>   1


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

                                    FORM 10-Q

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

     For the quarterly period ended MARCH 31, 2000 or

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

     For the transition period from_____ to _____

                         Commission file number 0-19903


                                 METRICOM, INC.
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                       77-0294597
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                 980 UNIVERSITY AVENUE, LOS GATOS, CA 95032-2375
             (Address of principal executive offices, including zip
                                      code)

                                 (408) 399-8200
              (Registrant's telephone number, including area code)


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

                            Yes [X]               No [ ]

        The number of shares of common stock outstanding as of April 30, 2000
was 30,623,868.


<PAGE>   2

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                    PAGE
                                                                                    ----
<S>                                                                                 <C>
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS                                            3

PART I. FINANCIAL INFORMATION

        ITEM 1. FINANCIAL STATEMENTS

                      Condensed Consolidated Balance Sheets                           4
                      Condensed Consolidated Statements of Operations                 5
                      Condensed Consolidated Statements of Cash Flows                 6
                      Notes to Condensed Consolidated Financial Statements            7

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

                      Overview                                                       11
                      Results of Operations                                          11
                      Liquidity and Capital Resources                                16

        ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT
                MARKET RISK                                                          18

PART II. OTHER INFORMATION

        ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                            19

        ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                     19


SIGNATURE PAGE                                                                       20

EXHIBIT INDEX                                                                        21
</TABLE>



                                       2
<PAGE>   3

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

        This document contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that are based on our current expectations about our
company and our industry. We use words such as "plan," "expect," "intend,"
"believe," "anticipate," "estimate" and other similar expressions to identify
some forward-looking statements, but not all forward-looking statements include
these words. Some of these forward-looking statements relate to the timing of
our planned network deployment, the launch of our high-speed service, our market
opportunities, our strategy, our anticipated revenues from MCI WorldCom, our
competitive position, our management's discussion and analysis of our financial
condition and results of operations and the timing and extent of our funding
needs. All of our forward-looking statements involve risks and uncertainties.
Our actual results may differ significantly from our expectations and from the
results expressed in or implied by these forward-looking statements. Some of the
factors that could cause our results to differ include our limited experience in
marketing our new Ricochet service, the uncertainty of demand for that service,
the short timeframe in which we believe we must deploy our high-speed network to
be competitive, the magnitude of our deployment and launch, our dependence on
third parties to deploy our high-speed network and manufacture modems and other
network equipment on a timely and cost-effective basis, the shortage of supply
of components experienced by our manufacturers, our dependence on channel
partners such as MCI Worldcom and our need to gain acceptance by other channel
partners, and risks related to regulatory approvals. These and other risks that
we currently consider material are described in the section captioned "Risk
Factors" appearing in our 1999 Annual Report on Form 10-K. We urge you to
consider these cautionary statements carefully in evaluating our forward-looking
statements. Except as required by law, we undertake no obligation to publicly
update any forward-looking statements to reflect subsequent events and
circumstances.



                                       3
<PAGE>   4

PART I. FINANCIAL INFORMATION

        ITEM 1. FINANCIAL STATEMENTS

                         METRICOM, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      MARCH 31,        DECEMBER 31,
                                                                         2000             1999
                                                                     -----------       -----------
                                                                     (Unaudited)
<S>                                                                  <C>               <C>
                              ASSETS

Current Assets:
  Cash and cash equivalents ...................................      $   790,970       $   354,820
  Short-term investments ......................................          290,050           144,521
  Restricted short-term investments ...........................           38,423                --
  Accounts receivable, net ....................................            1,523             2,387
  Inventories, net ............................................              981               586
  Prepaid expenses and other ..................................           11,354             3,116
                                                                     -----------       -----------
      Total current assets ....................................        1,133,301           505,430
Property and equipment, net ...................................           17,653            12,233
Network construction in progress ..............................          138,524            22,034
Other assets ..................................................           15,276             6,950
Restricted long-term investments ..............................           35,183                --
                                                                     -----------       -----------
      Total assets ............................................      $ 1,339,937       $   546,647
                                                                     ===========       ===========

             LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Accounts payable ............................................      $    41,241       $     9,649
  Accrued liabilities .........................................           26,839            12,642
  Note payable ................................................              224             4,521
                                                                     -----------       -----------
      Total current liabilities ...............................           68,304            26,812
                                                                     -----------       -----------
Long-term debt ................................................          237,659               385
                                                                     -----------       -----------
Other liabilities .............................................              301               321
                                                                     -----------       -----------
Redeemable convertible preferred stock ........................          573,992           573,329
                                                                     -----------       -----------

Stockholders' Equity (Deficit)
  Common stock ................................................               31                25
  Warrants to purchase common stock ...........................           61,869                --
  Additional paid-in capital ..................................          768,504           283,763
  Accumulated deficit .........................................         (370,247)         (337,988)
  Accumulated other comprehensive income (loss) ...............             (476)               --
                                                                     -----------       -----------
    Total stockholders' equity (deficit) ......................          459,681           (54,200)
                                                                     -----------       -----------
      Total liabilities and stockholders' equity (deficit) ....      $ 1,339,937       $   546,647
                                                                     ===========       ===========
</TABLE>

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



                                       4
<PAGE>   5

                         METRICOM, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED
                                      ---------------------------------
                                      MARCH 31, 2000     MARCH 31, 1999
                                      --------------     --------------
<S>                                   <C>                <C>
REVENUES:
  Service revenues ....................  $  2,334           $  2,431
  Product revenues ....................       889              1,755
                                         --------           --------
      Total revenues ..................     3,223              4,186
                                         --------           --------

COSTS AND EXPENSES:
  Cost of service revenues ............    13,750              4,433
  Cost of product revenues ............       300              1,326
  Research and development ............     9,623              8,235
  Selling, general and
     administrative ...................     7,989              4,140
                                         --------           --------
  Total costs and expenses ............    31,662             18,134
                                         --------           --------

    Loss from operations ..............   (28,439)           (13,948)

Interest expense ......................    (7,471)            (1,213)
Interest and other income .............    16,593                143
                                         --------           --------
    Net loss ..........................  $(19,317)          $(15,018)

Preferred dividends ...................    12,942                 --
                                         --------           --------

Net loss attributable to
  common stockholders .................  $(32,259)          $(15,018)
                                         ========           ========

Net loss attributable to
  common stockholders per share .......  $  (1.15)          $  (0.80)
                                         ========           ========

Weighted average
   shares outstanding .................    28,160             18,873
                                         ========           ========
</TABLE>


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



                                       5
<PAGE>   6

                         METRICOM, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED
                                                                   -----------------------------
                                                                    MARCH 31,          MARCH 31,
                                                                      2000               1999
                                                                   ---------           ---------
<S>                                                                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ......................................................  $ (19,316)          $ (15,018)
  Adjustments to reconcile net loss to net
     cash used in operating activities-
       Depreciation and amortization ............................      2,057                 942
       Accretion of long-term debt ..............................        950                  --
       Non-cash compensation expense ............................        716                  --
       Increase in accounts receivable,
         prepaid expenses and other current assets ..............     (7,374)               (689)
       (Increase) decrease in inventories .......................       (394)                742
       Increase (decrease) in accounts payable, accrued
         liabilities and other liabilities ......................     36,018              (3,464)
                                                                   ---------           ---------
           Net cash provided by (used in) operating activities ..     12,657             (17,487)
                                                                   ---------           ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ..............................     (7,527)             (1,292)
Network construction in progress ................................   (116,490)                 --
(Increase) decrease in other assets .............................     (8,326)                343
Purchase of short-term investments ..............................   (224,430)                 --
Sale of short-term investments ..................................     40,000                  --
Purchase of long-term investments ...............................    (35,183)                 --
                                                                   ---------           ---------
           Net cash used in investing activities ................   (351,956)               (949)
                                                                   ---------           ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock ........................    477,198               1,159
  Proceeds from sale of warrants to purchase common stock .......     61,869                  --
  Proceeds from the issuance of long-term debt ..................    236,382              19,978
                                                                   ---------           ---------
          Net cash provided by financing activities .............    775,449              21,137
                                                                   ---------           ---------
Net increase in cash and cash equivalents .......................    436,150               2,701
Cash and cash equivalents, beginning of period ..................    354,820              19,141
                                                                   ---------           ---------
Cash and cash equivalents, end of period ........................  $ 790,970           $  21,842
                                                                   =========           =========

SUMMARY OF NON-CASH TRANSACTIONS:
  Property and equipment acquired under capital lease ...........  $      51           $     280
  Common stock issued upon conversion of debt ...................  $   4,304                  --
  Preferred dividends ...........................................  $  12,942                  --
</TABLE>

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



                                       6
<PAGE>   7

                         METRICOM, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. BASIS OF PRESENTATION

        The condensed consolidated financial statements of Metricom, Inc. (the
"Company") presented in this Form 10-Q are unaudited. In the opinion of
management, the accompanying condensed consolidated financial statements reflect
all adjustments (which include only normal recurring adjustments) which are
necessary for a fair presentation of operations for the three-month periods
ended March 31, 2000 and March 31, 1999. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission.
These condensed consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1999, as filed with the Securities and Exchange Commission.

        Certain amounts on the accompanying consolidated financial statements
have been reclassified from the previously reported balances to conform to the
2000 presentation. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The results
of operations for the three-month periods ended March 31, 2000 and March 31,
1999 are not necessarily indicative of the results expected for the full fiscal
year or for any other fiscal period.

NOTE 2. INVESTMENTS

        The Company's investments in securities are considered
available-for-sale and are recorded at their fair values as determined by quoted
market prices with any unrealized holding gains or losses classified as a
separate component of stockholders' equity. Upon sale of the investments, any
previously unrealized gains or losses are recognized in results of operations.


NOTE 3. NETWORK CONSTRUCTION IN PROGRESS

        In 1999, the Company began deployment of its high-speed Ricochet
networks in a number of markets in the United States. As of March 31, 2000, the
Company had incurred and capitalized $138.5 million of costs associated with
network deployment. Network deployment costs include labor costs for site
acquisition, radio frequency engineering, zoning and



                                       7
<PAGE>   8

construction management, as well as material costs for equipment and component
inventory. As commercial service is launched in each market, the capitalized
costs associated with the network equipment assets in each market will be
transferred to Property and Equipment and depreciated over an estimated useful
life of four years.


NOTE 4. LONG-TERM DEBT, COMMON STOCK AND PREFERRED STOCK OFFERINGS

        In February 2000, the Company, together with its wholly owned finance
subsidiary, Metricom Finance, Inc., as co-issuers and co-obligors, issued $300
million aggregate principal amount of 13% Senior Notes due 2010. Metricom
Finance has no independent assets or operations. The Company has fully and
unconditionally guaranteed the obligations of Metricom Finance, Inc. under the
notes. Interest on the notes will be payable on February 15 and August 15 of
each year, beginning August 15, 2000. The notes will mature on February 15,
2010. The notes were offered together with warrants to purchase 1,425,000 shares
of common stock of the Company at an initial exercise price of $87.00 per share.
Each warrant enables the holder to purchase 4.75 shares of common stock and is
exercisable on or after August 15, 2000. Each warrant was sold for $212.06 per
each associated $1,000 principal amount of notes, and each note was sold for
$787.94. The warrants will expire on February 15, 2010. Net proceeds to the
Company from the notes and warrants offering was approximately $291.8 million,
$73.1 million of which was deposited in a restricted pledge account to secure
the payment of the first four scheduled interest payments on the notes.

        In February 2000, the Company issued 5,750,000 shares of common stock at
$87.00 per share in a public offering. Net proceeds to the Company were
approximately $473.2 million, after deducting underwriting discounts,
commissions and estimated offering expenses.

        In November 1999, the Company issued and sold to MCI WorldCom, Inc. 30
million shares of newly-designated Series A1 preferred stock at a price of $10
per share, and the Company issued and sold to Vulcan Ventures 30 million shares
of newly-designated Series A2 preferred stock at a price of $10 per share, for
gross aggregate proceeds to the Company of $600 million. Both series of
preferred stock bear cumulative dividends at the rate of 6.5% per annum for
three years, payable in cash or additional shares of preferred stock. In
addition, each series has the right to elect one director to the Company's Board
of Directors, although voting rights otherwise will be generally limited to
specified matters. The preferred stock is subject to mandatory redemption by the
Company at the original issuance price in 10 years following initial issuance
and to redemption at the option of the holder upon the occurrence of specified
changes in control or major acquisitions. Both series of preferred stock will
accrete at approximately $2.7 million per year over the ten-year period from the
beginning aggregate net book value of $573 million up to its redemption value of
$600 million. This accretion will be charged against retained earnings
(accumulated deficit).



                                       8
<PAGE>   9

NOTE 5. COMPREHENSIVE INCOME (LOSS)


<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                  ---------------------------
                                                                    2000               1999
                                                                  --------           --------
<S>                                                               <C>                <C>
Net loss attributable to common stockholders ...................  $(32,259)          $(15,018)
Other comprehensive income/(loss):
Unrealized holding loss on available-for-sale securities .......      (476)                --
                                                                  --------           --------
Comprehensive income (loss) ....................................  $(32,735)          $(15,018)
                                                                  ========           ========
</TABLE>



NOTE 6. BASIC AND DILUTED NET LOSS PER SHARE

        Basic and diluted net loss per share has been computed using the
weighted average number of shares of common stock outstanding. Potential common
equivalent shares from options and warrants to purchase common stock and from
conversion of the convertible preferred stock have been excluded from the
calculation of diluted net loss per share as their effect would be
anti-dilutive.


NOTE 7. SEGMENT REPORTING

        The Company adopted SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information," during the fourth quarter of 1998. SFAS No.
131 established standards for reporting information about operating segments in
annual financial statements and requires selected information about operating
segments in interim financial reports issued to stockholders. It also
established standards for related disclosures about products and services and
geographic areas. Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated
regularly by chief operating decision makers or decision-making groups in
deciding how to allocate resources and in assessing performance.

        The information in the following table is derived directly from the
Company's internal financial reporting used for corporate management purposes.
The Company evaluates its segments' performance based on several factors, of
which the primary financial measures are revenue and gross margin. Corporate
overhead and other costs are not allocated to business segments for management
reporting purposes. The Company does not allocate assets by segment for
management reporting purposes.

        All of the Company's operations are located in the United States. The
Company's reportable operating segments include Ricochet and UtiliNet. Ricochet
designs and manufactures and markets wireless data communications solutions.
UtiliNet manufactures and markets customer-owned networks and related products.
In February 2000, UtiliNet technology was



                                       9
<PAGE>   10

licensed to Schlumberger Resources Management Services, Inc. The agreement
grants Schlumberger the exclusive right to design, manufacture and sell UtiliNet
products in return for license and royalty fees. A summary of operating results
by reportable operating segment in the first quarter of 2000 is as follows:

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED
                                         MARCH 31,
                                  ------------------------
                                   2000             1999
                                  -------          -------
<S>                               <C>              <C>
Ricochet Revenue ..............   $ 2,707          $ 2,900
Utilinet Revenue ..............       516            1,286
                                  -------          -------
    Total .....................   $ 3,223          $ 4,186
                                  =======          =======

Cost of Service Ricochet ......   $13,750          $ 4,427
Cost of Service Utilinet ......        --                6
                                  -------          -------
    Total .....................   $13,750          $ 4,433
                                  =======          =======

Cost of Product Ricochet ......   $   135          $   786
Cost of Product Utilinet ......       165              540
                                  -------          -------
    Total                         $   300          $ 1,326
                                  =======          =======
</TABLE>

NOTE 8. NEW ACCOUNTING STANDARDS

        In June 1998, FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, hedging activities and exposure
definition. The pronouncement is effective for fiscal years beginning after June
15, 2000. The Company believes the pronouncement will not have a material effect
on its financial statements.

        In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial
Statements." SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition issues in financial statements. The Company
will adopt SAB 101 as required in the second quarter of 2000. The Company does
not believe the adoption of SAB101 will have a material effect on the Company's
consolidated results of operations and financial position.



                                       10
<PAGE>   11

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

OVERVIEW

        Since inception, we have devoted significant resources to the
development, deployment and commercialization of our wireless network products
and services. Historically, a significant portion of our revenues has been
derived primarily from the development contracts and sales of customer-owned
networks and related products, known as UtiliNet, to utility companies. In
recent years, we have deployed a commercial wireless data network known as
Ricochet in various metropolitan areas of the United States. The Company
currently provides Ricochet commercial service in the San Francisco Bay Area,
the Seattle and Washington D.C. metropolitan areas. In 1999, we completed
development of our new high-speed service, which has demonstrated in Company
tests to provide the same service as Ricochet, but at faster downstream speeds
of up to 128 kbps. We are currently in the process of deploying our high-speed
service in various metropolitan areas in the United States. While we believe we
are substantially on track with the overall national network deployment
described in our 1999 Annual Report on Form 10-K, the planned New York service
area launch is facing delays relating to timeframes for zoning approvals as well
as utility agreement negotiations. In addition, further negotiations for poletop
access rights in three other planned service areas are proceeding slowly, and we
are currently assessing the impact on these market area launches.


        In February 2000, in order to focus our operations on deployment of our
high-speed network, we entered into an agreement to license our UtiliNet
technology to Schlumberger Resources Management Services, Inc. The agreement
grants Schlumberger the exclusive right to design, manufacture and sell UtiliNet
products in return for license and royalty fees. We do not expect UtiliNet to be
a significant source of revenues in the future.

        We currently derive substantially all of our revenues from subscriptions
paid to us by users of our current Ricochet service. After we launch our
high-speed service, planned to occur during the late summer of 2000, we expect
to derive substantially all of our revenues from subscription fees paid to us by
channel partners, which will resell our service directly to their customers.
After the launch of our high-speed service, we expect to curtail our business
operations related to our current Ricochet service. As we deploy our high-speed
network and launch our high-speed service, we expect our operating expenses to
increase significantly from historical levels and to exceed revenues for the
foreseeable future. We expect to generate substantial net losses to common
stockholders for the foreseeable future.


RESULTS OF OPERATIONS

Revenues

        Currently, we derive revenues from the sale of our services and
products. We derive service revenues from Ricochet subscriber fees and Ricochet
modem rentals, and we recognize these revenues ratably over the service period.
We derive product revenues from the sale of UtiliNet products and Ricochet
modems and recognize these revenues upon shipment.



                                       11
<PAGE>   12
        Total revenues decreased to $3.2 million in the first quarter of 2000
from $4.2 million for the same period of 1999, primarily due to a decrease in
product revenues. Product revenues declined to $0.9 million for the first
quarter of 2000 from $1.8 million for the same period of last year as a result
of our licensing of our UtiliNet technology to Schlumberger. Service revenues
decreased to $2.3 million in the first quarter of 2000 from $2.4 million in the
same period of 1999. This decrease was primarily the result of a decrease in
UtiliNet service revenues of approximately $0.3 million, offset by a $0.2
million increase in Ricochet service revenues. Ricochet service revenues
increased as a result of a 10% increase in subscribers as of March 31, 2000
compared with March 31, 1999. Total UtiliNet revenues decreased to $0.5 million
in the first quarter of 2000 from $1.3 million in the same period of 1999 as a
result of our licensing of our UtiliNet technology to Schlumberger. We expect
that our UtiliNet revenues will continue to decline significantly in the future
as a result of our focus on the launch of our high-speed service.

        In the future, after we launch our high-speed service, we expect to
curtail our business operations related to our current Ricochet service. We
expect to derive substantially all of our future revenues from subscription fees
paid to us by channel partners. We anticipate that our channel partners will pay
us subscription fees based on flat rates for each user they enroll for our
service. We will require each of our channel partners to charge its subscribers
a flat rate for use of our service, although each channel partner will set the
particular rate it charges its customers.

        We currently have two channel partner relationships. In June 1999 and
April 2000, MCI WorldCom and Juno Online Services, Inc., respectively, entered
into agreements with us to sell our high-speed service to their customers. In
our agreement with MCI Worldcom, MCI WorldCom has agreed to pay us a
per-subscriber fee, subject to an agreed minimum revenue level of at least $388
million over the five years following the launch of our service, assuming that
our deployment schedule is not delayed, that we place our network into service
on schedule and that we meet quality-of-service and network performance
standards. Subject to these limitations, we currently expect MCI WorldCom to pay
us the following minimum amounts during the first five years after we launch our
service:

<TABLE>
<S>                                      <C>
First year.............................  $  5.6     million
Second year............................    40.6     million
Third year.............................    83.6     million
Fourth year............................   117.4     million
Fifth year.............................   141.0     million
</TABLE>

Notwithstanding the foregoing, if MCI WorldCom's sales efforts result in fewer
subscribers than MCI WorldCom has agreed contractually to provide, but the
number of subscribers provided by MCI WorldCom and its authorized resellers
nevertheless represent more than a specified percentage of our total users, MCI
WorldCom will pay us only the greater of a per-subscriber rate for each of its
subscribers or the subscription fees we receive from all of our other channel
partners, which could be substantially less than the minimum revenues we
currently expect from



                                       12
<PAGE>   13

MCI WorldCom. Accordingly, our ability to achieve the minimum revenue levels we
expect from our agreement with MCI WorldCom may depend on our ability to enter
into channel agreements with one or more large channel partners that can
successfully sell subscriptions to our service so that subscribers provided by
MCI WorldCom and its resellers represent less than the threshold percentage of
our total users. In addition, if our deployment schedule is delayed or if we
fail to meet deployment schedule deadlines or fail to comply with
quality-of-service standards relating to data transmission performance, network
availability, coverage and latency, ease of use and size of modems, all as
specified in our agreement, MCI WorldCom may delay or reduce its minimum
payments to us or, in the case of a deployment delay in excess of 12 months, may
terminate the contract.

Cost of Revenues

        Cost of service revenues consists primarily of network operations costs,
real estate management costs and depreciation expense on network equipment.
Network operations costs include the costs associated with the field managers,
engineers and technicians who operate and maintain our high-speed network, as
well as the costs associated with field offices we maintain, including our
network operations centers. Network operations costs also include the
telecommunications costs we incur to transmit data between our wired access
points and network interface facilities and the Internet. Real estate management
costs include the costs associated with the maintenance of lease agreements for
our poletop radios, wired access points and network interface facilities and the
ongoing rental payments for these sites. Real estate management costs also
consist of the internal and external labor costs associated with maintaining
right-of-way agreements in the markets where our network is currently deployed.

        Cost of service revenues in the first quarter of 2000 was $13.8 million
compared with $4.4 million in the same period of 1999. The significant increase
was due to increases in staffing, property, telecommunications and support costs
associated with the deployment of our new high-speed service in various markets.
Staffing of personnel who manage network deployment increased by over 400% from
March 31, 1999 to March 31, 2000. In the twelve months ending March 31, 2000, we
opened up ten new operations field offices. We expect all components of our cost
of service revenues to continue to increase significantly and rapidly as we
expand the scope of our operations through the deployment of our high-speed
network.

        Cost of product revenues consists primarily of the inventory and
manufacturing costs associated with Ricochet modem and UtiliNet product sales.
Cost of product revenues decreased to $0.3 million in the first quarter of 2000
from $1.3 million in the first quarter of 1999. Ricochet cost of product
revenues as a percentage of Ricochet product revenues declined to 37% in the
first quarter of 2000 compared with 106% in the first quarter of 1999 as a
result of increased shipments of refurbished modems for which the majority of
costs have been charged to operations in previous periods. UtiliNet cost of
product revenues as a percentage of UtiliNet product revenues declined to 32% in
the first quarter of 2000 from 53% in the first quarter of 1999 as a result of
higher selling prices and lower allocated costs in 2000. We expect Ricochet cost
of product revenues to increase in 2000 as we sell modem inventory directly to



                                       13
<PAGE>   14

MCI WorldCom or other channel partners for resale to new subscribers to our
high-speed service. In subsequent years, we anticipate that our channel partners
may begin to purchase modems directly from our licensed third-party
manufacturers.

Research and Development

        Research and development costs include the costs incurred to develop our
network technology and subscriber modems, as well as to obtain rights-of-way and
related site agreements in markets where we plan to offer service. Research and
development expenses increased to $9.6 million in the first quarter of 2000 from
$8.2 million in the same period of 1999. The increase was primarily due to an
increase in costs incurred to obtain right-of-way and site agreements in
metropolitan areas where we currently plan to offer service. Right-of-way
acquisition costs included in research and development increased to $4.4 million
in the first quarter of 2000 from $3.1 million in the same period of 1999. We
plan to continue to spend a substantial amount on staffing and support needed to
obtain right-of-way agreements in markets under development. We plan to spend a
substantial amount on the development of our networking products to reduce the
cost of our system components, increase the speed and performance of our
services and develop additional applications for our services. We also plan to
continue to improve and upgrade our network and service to address the emerging
demands for mobile data access. As a result, we expect that research and
development costs will continue to increase significantly in absolute dollars
for the foreseeable future.

Selling, General and Administrative

        Selling, general and administrative expenses include our corporate
overhead and the costs associated with our efforts to obtain and support our
channel partners, promote the Ricochet brand and our high-speed service, and
develop and implement our marketing strategy for our service and modems.
Selling, general and administrative expenses increased to $8.0 million for the
first quarter of 2000 from $4.1 million for the first quarter of 1999.
Approximately three-quarters of the increase was due to increases in
administrative staff and the labor, travel and support costs associated with
supporting the widespread deployment of our high-speed service. Approximately
one-quarter of the increase in 2000 was due to increased product marketing,
advertising and public relations expenditures related to commercialization of
the high-speed service. We expect selling, general and administrative costs to
increase significantly from historical levels as we implement our planned
advertising campaign related to the launch of the various phases of our
high-speed service. We expect to spend more than $50 million on sales and
marketing efforts in 2000 and substantially more in 2001. We also expect to
continue to expand our corporate and administrative infrastructure to support
our planned growth.



                                       14
<PAGE>   15

Interest and Other Income and Interest Expense

        Interest and other income increased to $16.6 million in the first
quarter of 2000 from $0.1 million in the same period of 1999 due primarily to a
significantly higher average balance of cash, cash equivalents and investments
on hand in 2000. As a result of the November 1999 sale of our preferred stock
for net proceeds of $573.2 million and the February 2000 sale of common stock,
13% senior notes due 2010 and warrants to purchase common stock, we have over $1
billion on hand. We are using these cash resources to fund the deployment of our
network, to fund operating losses and working capital requirements through the
first two phases of our network deployment, and to fund interest on long-term
debt and dividends on our preferred stock outstanding. Pending these uses, we
have invested this cash in high-quality, short-term, interest-bearing
securities. Accordingly, in the short-term, we expect to continue to generate a
substantial amount of interest income, although this interest income will
decline rapidly over time as we use this cash.

        Interest expense increased to $7.5 million in the first quarter of 2000
from $1.2 million in the same period of 1999 as a result of the increase in our
outstanding debt in 2000. Due to our senior notes and warrants offering in
February 2000, we have approximately $300 million in outstanding debt. The
senior notes require semi-annual cash interest payments commencing August 15,
2000. We have deposited approximately $73.1 million of the net proceeds from the
sale of the senior notes in a pledge account to secure the first four interest
payments on these securities. We therefore will continue to incur a substantial
expense, a portion of which will be non-cash, for interest on these obligations.
If we incur additional debt in the future to fund our expansion plans, our
interest costs will increase.

Preferred Dividends

        In November 1999, we issued 60,000,000 shares of preferred stock to
Vulcan Ventures Incorporated and MCI WorldCom, Inc. for gross proceeds of $600
million. Each share of preferred stock bears a cumulative dividend at the rate
of $.65 per year for the first three years after issuance, which we may pay in
cash or in additional shares of preferred stock. We have historically paid and
currently expect to continue to pay future dividends on the preferred stock in
cash. Because the preferred stock sold to Vulcan Ventures is immediately
convertible into common stock at the holder's option at a conversion price of
$10.00 per share, which was below $11.06, the per share closing price of our
common stock on the date immediately prior to our execution of the preferred
stock purchase agreement, we recorded an additional dividend of $31.8 million in
the fourth quarter of 1999 to reflect the beneficial conversion privilege
associated with this series of preferred stock. The preferred stock issued to
MCI WorldCom is also deemed to have been issued with a beneficial conversion
privilege. However, that series of preferred stock does not begin to become
convertible into common stock at the holder's option until May 2002. As a
result, this discount will be amortized over the 48-month period, which began in
November 1999, during which this series of preferred stock becomes convertible
into common stock at the holder's


                                       15
<PAGE>   16

option. Accordingly, for both series of preferred stock in the aggregate, we
will record preferred stock dividends in addition to our cash dividend on the
preferred stock as follows:

<TABLE>
<S>                             <C>
2000................            $10.1  million
2001................            $10.1  million
2002................             $7.8  million
2003................             $2.6  million
</TABLE>

        Both series of preferred stock will accrete at approximately $2.7
million per year in total over the ten-year period from the beginning aggregate
net book value of $573 million up to its aggregate face value of $600 million.
This accretion will be charged against retained earnings (accumulated deficit).
In the first quarter of 2000, preferred dividends included $9.7 million of
accrued dividends payable, $2.5 million of beneficial conversion privilege and
$0.7 million of accretion related to the preferred stock.


LIQUIDITY AND CAPITAL RESOURCES

        We have financed our operations and capital expenditures primarily
through the public and private sale of equity and debt securities. In 1996, we
completed a private placement of 8% Convertible Subordinated Notes due 2003 with
net proceeds of approximately $43.4 million. In January 1998, we completed a
private placement of common stock with Vulcan Ventures with net proceeds of
approximately $53.7 million. In November 1999, we completed a private placement
of redeemable convertible preferred stock with Vulcan Ventures and MCI WorldCom
with net proceeds of approximately $573 million. In February 2000, we completed
a public offering of common stock with net proceeds of approximately $473
million and a public offering of 13% senior notes due 2010 and warrants to
purchase common stock with available net proceeds of approximately $219 million,
after establishing the required reserve to secure the first four interest
payments on the notes. This large amount of indebtedness could adversely affect
our business, for example, by requiring us to dedicate a substantial portion of
our cash flow from operations to required payments on indebtedness or limiting
our ability to acquire additional financing in the future. See "Risk Factors -
We have a substantial amount of debt, which could adversely affect our business,
financial condition and results of operations" in our 1999 Annual Report on Form
10-K.

        Since inception, we have devoted significant resources to the
development, deployment and commercialization of wireless network products and
services. As a result, as of March 31, 2000, we had incurred $370 million of
cumulative net losses. Our operations have required substantial capital
investments for the purchase of network equipment, modems and computer and
office equipment.

                                       16
<PAGE>   17
Including network construction in progress, capital expenditures were $124.0
million during the first quarter of 2000. Network construction in progress
included approximately $50.3 million in the first quarter of 2000 related to the
purchase of component inventory located at our vendors. We expect that our
vendors holding this inventory will use these components in the manufacture and
assembly of network equipment for us in 2000. We expect that capital
expenditures will significantly increase in the future as a result of our
ongoing deployment and commercialization of the high-speed network.

        Our principal uses of cash for the foreseeable future will be to fund
the deployment of our high-speed network, to fund operating losses and to pay
interest on our debt securities issued in February 2000, as well as dividends on
our preferred stock. Based on our current projections, we believe that our cash,
cash equivalents and unrestricted investments of approximately $1.08 billion as
of March 31, 2000 will be sufficient to fund the first two phases of our network
deployment. We believe that, in addition to the funds on hand at March 31, 2000,
we will require additional cash resources of approximately $300 million to
enable us to complete the three-phase deployment of our network, as well as for
the other purposes described above. However, the funds we may actually require
to complete any phase of the deployment may vary materially from our estimates.
In addition, we could incur unanticipated costs or be required to alter our
plans in order to respond to changes in competitive or other market conditions,
which could require us to raise additional capital sooner than we expect.
Further, although it is not our current intention to do so, we may decide to use
a portion of our cash resources to acquire licensed spectrum or to license,
acquire or invest in new products, technologies or businesses that we consider
complementary to our business. We cannot assure you that the additional capital
we will require to complete the third phase of our network deployment or for
these other purposes will be available on commercially reasonable terms or at
all. If we are unable to secure additional financing as necessary, we may need
to delay or curtail our expansion plans. See in our 1999 Annual Report on Form
10-K, "Risk Factors -- We will require significant additional capital in the
future to fund our continuing development, deployment and marketing of our
high-speed network and service."

        Our current and future operations will require substantial capital
investments for the purchase of our network equipment, which consists primarily
of network radios, wired access points and network interface facilities.
Significant labor costs associated with deploying our network equipment include
design of the network, site acquisition, zoning, construction and installation
of equipment. In July 1999, we entered into an agreement with Sanmina
Corporation to manufacture our poletop radios and network radios installed at
wired access points. In October 1999, we entered into agreements with Wireless
Facilities, Inc., General Dynamics Worldwide Telecommunications Systems and
Whalen & Company to provide us with expertise and personnel to assist with the
deployment of our network. At March 31, 2000, we had outstanding commitments to
purchase approximately $325 million of network equipment and related labor from
these suppliers.



                                       17
<PAGE>   18

        We expect to incur significant expenditures to procure high-speed modems
in the future. We have agreed to purchase 47,700 modems from our current modem
supplier, Alps Electric (USA), Inc., in 2000, representing a commitment of
approximately $20 million. In January 2000, we entered into a two-year agreement
with NatSteel Electronics, Ltd. for the purchase of additional modems. In
November 1999 and October 1999, we entered into agreements with Sierra Wireless
and Novatel, respectively to develop and manufacture custom personal computer
card modems. We have agreed with both Sierra Wireless and Novatel to purchase a
minimum of 150,000 units in the first year of deliveries from each, representing
a total commitment of approximately $68 million. We anticipate that deliveries
from Alps will begin during the second quarter of 2000 and deliveries from
Sierra Wireless and Novatel will begin in early 2001. In April 2000, we entered
into an agreement with National Semiconductor Corporation to integrate the
Ricochet modem technology onto a microchip set.

        In December 1999, we called our $45 million aggregate principal amount
of convertible notes due 2003 for redemption on January 10, 2000. As of December
31, 1999, $40.7 million of the notes had been converted into approximately 2.8
million shares of common stock. In the first quarter of 2000, the remaining $4.3
million of notes outstanding were converted to 0.3 million of shares of our
common stock at a conversion price of $14.55 per share. As a result of the
conversion, we issued an aggregate of 3,064,963 shares of our common stock to
the former convertible note holders.


ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

        Our exposure to financial market risk, including changes in interest
rates and marketable securities prices, relates primarily to our investment
portfolio, long-term debt and redeemable convertible preferred stock
outstanding. Our cash equivalents and short-term investments subject to interest
rate risk are primarily highly liquid corporate debt securities from high credit
quality issuers. We do not have any significant investments in foreign
currencies and we do not have any foreign exchange contracts or derivative
instruments. We performed a sensitivity analysis to assess the impact of a
change in interest rates. In the analysis, the fair value of our investment
portfolio would not be significantly impacted by a 100-basis point change in
interest rates, due primarily to the fixed rate, short-term nature of our
portfolio. The fair value of our redeemable convertible preferred stock would
not change materially in the event of a 100-basis point change in interest
rates, due primarily to the fixed and relatively short-term nature of its 6.5%
coupon rate. We estimate that the fair value of our long-term debt would
decrease or increase by approximately $12 million in the event of a 100-basis
point increase or decrease, respectively, in interest rates.




                                       18
<PAGE>   19

PART II. OTHER INFORMATION

ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS

        In February 2000, we issued senior notes under an indenture and
supplemental indenture with Bank One Trust Company, N.A., as trustee. We will be
restricted by the terms of the indenture and supplemental indenture from taking
various actions, such as incurring additional indebtedness, paying dividends,
repurchasing junior indebtedness, making investments, entering into transactions
with affiliates, merging or consolidating with other entities and selling all or
substantially all of our assets. These restrictions could also limit our ability
to obtain future financings, make needed capital expenditures, withstand a
future downturn in our business or the economy in general or otherwise conduct
necessary corporate activities.

         For information with respect to shares of common stock issued upon
conversion of our convertible notes due 2003, see Part I, Item 2: "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources." These shares were issued pursuant to the
exemption provided by Section 3(a)(9) under the Securities Act of 1933, as
amended, in an exchange with our existing security holders exclusively where no
commission or other remuneration was paid for soliciting the exchange.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

        a. Exhibits:

            10.1* Agreement and Supplemental Agreement No. 1 for Electronic
                  Manufacturing Services between the Company and Sanmina
                  Corporation, dated as of July 2, 1999.

            27.1  Financial Data Schedule


        b. Reports on Form 8-K:

            (i)   Report on Form 8-K filed January 28, 2000 regarding a press
                  release announcing the impact of industry-wide component
                  shortages.

            (ii)  Report on Form 8-K filed February 7, 2000 filing forms of
                  underwriting agreement and supplemental indenture relating to
                  the senior notes and warrants offering.

            (iii) Report on Form 8-K filed February 10, 2000 and amended on
                  February 16, 2000 reporting the closing of the public offering
                  of common stock and senior notes with warrants and including
                  related underwriting and other agreements, certificates and
                  documents.

----------------------
*Certain portions have been deleted pursuant to a confidential treatment
request.

                                       19
<PAGE>   20

                                   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.


                                       METRICOM, INC.
                                       (Registrant)




Date: May 12, 2000                     /s/ TIMOTHY A. DREISBACH
                                       ---------------------------
                                       Timothy A. Dreisbach
                                       Chief Executive Officer and
                                       Chairman of the Board of Directors


                                       /s/  JAMES E. WALL
                                       ---------------------------
                                       James E. Wall
                                       Chief Financial Officer (Principal
                                       Financial and Accounting Officer)



                                       20
<PAGE>   21

                                  EXHIBIT INDEX


<TABLE>
<S>       <C>
10.1*     Agreement and Supplemental Agreement No. 1 for Electronic
          Manufacturing Services with Sanmina Corporation, dated July 2, 1999.

27.1      Financial Data Schedule
</TABLE>

----------------------
*Certain portions have been deleted pursuant to a confidential treatment
request.


                                       21