SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                        FOR QUARTER ENDED MARCH 31, 1997


                         COMMISSION FILE NUMBER 0-20777


                      XIONICS DOCUMENT TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)


DELAWARE                                                     04-3186685
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

70 BLANCHARD ROAD, BURLINGTON, MA                               01803
(Address of principal executive offices)                     (Zip Code)


                                 (617) 229-7000
              (Registrant's telephone number, including area code)


                                      NONE
                    (Former name, former address and former
                   fiscal year, if changed since last report)


      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 .

      At May 7, 1997, there were 11,454,526 shares of the Company's $.01 par
value common stock issued, with 11,230,463 shares outstanding.



<PAGE>
              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES


                                     INDEX

                                                                      PAGE
                                                                     NUMBER

PART I. FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements

          Balance Sheets--March 31, 1997 and June 30, 1996..........   3

          Statements of Operations--Nine Months Ended March 31,
           1997 and 1996 and Three Months Ended March 31, 1997
           and 1996.................................................   5

          Statements of Cash Flows--Nine Months Ended March 31,
           1997 and 1996............................................   6

        Notes to Condensed Consolidated Financial Statements........   7

ITEM 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations.........................  11


PART II OTHER INFORMATION


ITEM 2. Changes in Securities.......................................  15

ITEM 5. Other Information...........................................  15

ITEM 6. Exhibits and Reports on Form 8K.............................  15

        Signatures..................................................  16



<PAGE>
<TABLE>
<CAPTION>
                         PART I--FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)


                                                                                  March 31,      June 30,
                                                                                    1997           1996
                                                                                 ----------     ----------
                                                                                 (Unaudited)

                  ASSETS
<S>                                                                              <C>            <C> 
Current Assets:
   Cash and cash equivalents                                                     $21,455,132    $2,115,859
   Short-term investments                                                                ---       644,613
   Accounts receivable, less reserves of approximately $121,000 and                4,592,511     2,398,033
      $140,000 at March 31, 1997 and June 30, 1996, respectively
   Contract and other receivables                                                  7,056,439           ---
   Inventories                                                                     1,237,104     1,020,035
   Other current assets                                                              764,400       398,264
                                                                                  ----------     ---------
      Total Current Assets                                                        35,105,586     6,576,804

Property and Equipment, net                                                        2,764,198     2,169,091
Acquired intangibles, net of accumulated amortization of approximately $750,000      451,667       194,167
   and $659,000 at March 31, 1997 and June 30, 1996, respectively
Deferred offering costs                                                                  ---       926,439
Other assets                                                                       1,322,467        38,000
                                                                                  ----------     ---------

                                                                                 $39,643,918    $9,904,501
                                                                                 ===========    ==========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable                                                               $1,691,856    $1,988,470
   Term loans, current portion                                                           ---       322,667
   Equipment line of credit                                                          140,037           ---
   Deferred revenue                                                                1,689,517     1,368,833
   Accrued expenses                                                             4,485,839     1,904,909
                                                                                  ----------    ----------
      Total Current Liabilities                                                    8,007,249     5,584,879


Term loans, net of current portion                                                       ---       564,166
Secured promissory notes payable to a stockholder                                        ---     2,094,000

Redeemable preferred stock:
   Class C Redeemable Convertible Preferred Stock, $.01 par value--
      Authorized--2,779,615 shares
   Issued and outstanding--2,698,938 shares, stated at liquidation value,
      at June 30, 1996 and none at March 31, 1997                                        ---     8,231,410

Stockholders' equity (deficit):
   Preferred Stock, $.01 par value--
      Authorized--10,000,000 shares
      Issued and outstanding--none                                                       ---           ---
   Class A Convertible Preferred Stock, $.01 par value--
      Authorized--3,603,305 shares
      Issued and outstanding--3,125,051 at June 30, 1996 and none at                     ---     3,606,658
         March 31, 1997
   Common Stock, Class A, $.01 par value--
      Authorized--20,000,000 shares
      Issued--1,386,066 shares at June 30, 1996
      Outstanding--1,161,755 at June 30, 1996 and none at March 31, 1997                 ---        13,861
   Common Stock, Class B, $.01 par value--
      Authorized--10,000,000 shares
      Issued and outstanding--558,931 shares at June 30, 1996 and none at
        March 31, 1997                                                                   ---         5,589


<PAGE>



   Common Stock
      Authorized--40,000,000 shares
      Issued--10,896,749 shares at March 31, 1997 and none at June 30, 1996
      Outstanding--10,672,686 shares at March 31, 1997 and none at June 30, 1996                               108,968           ---
   Additional paid-in capital                                                     43,808,524     1,312,381
   Treasury stock, at cost--224,063 shares and 224,311 shares at March 31, 1997
      and June 30, 1997, respectively                                              (151,246)     (151,413)
      Accumulated deficit                                                        (12,129,577)  (11,357,030)
                                                                                 ------------  ------------        
      Total stockholders' equity (deficit)                                         31,636,669   (6,569,954)
                                                                                 ------------  ------------

                                                                                  $39,643,918   $9,904,501               
                                                                                 ============   ===========


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


<PAGE>


<TABLE>
<CAPTION>
              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)


                                                        Three Months Ended         Nine Months Ended
                                                       ---------------------    ----------------------
                                                       March 31,   March 31,    March 31,     March 31,
                                                         1997        1996         1997          1996
                                                       ---------   ---------    ---------     ---------

<S>                                                   <C>         <C>          <C>          <C>        
Net revenue                                           $9,829,322  $6,662,817   $27,774,829  $15,535,616
Cost of revenue                                        2,039,152   1,636,534     5,625,357    4,280,734
                                                      ----------  ----------   -----------  -----------
   Gross profit                                        7,790,170   5,026,283    22,149,472   11,254,882

Operating expenses:
   Research and development                            3,873,718   2,253,349    11,157,965    6,347,205
   Selling, general and administrative                 2,355,648   2,403,132     6,926,814    7,031,658
   Charge for purchased R&D                            5,400,000         ---     5,400,000          ---
                                                      ----------  ----------   -----------  -----------
      Income (loss) from operations                   (3,839,196)    369,802    (1,335,307)  (2,123,981)

Other income:
   Interest expense                                       (1,067)    (64,896)      (85,993)    (226,337)
   Interest income                                       307,806      19,467       659,380       52,867
   Other income                                           18,812      26,528        27,563       21,604
                                                      ----------  ----------   -----------  -----------

      Income (loss) before provision for income taxes (3,513,645)    350,901      (734,357)  (2,275,847)

Provision (benefit) for income taxes                    (514,667)        ---        38,190          ---
                                                      ----------  ----------   -----------  -----------
      Net income (loss)                              $(2,998,978)   $350,901     $(772,547) $(2,275,847)
                                                      ==========  ==========   ===========  ===========

Net income (loss) per common and common equivalent        $(0.28)      $0.03        $(0.08)      ($0.27)
 share                                                ==========  ==========   ===========  ===========

Weighted average number of common and                 10,630,541  10,406,952     9,542,882    8,316,543
common equivalent shares outstanding                  ==========  ==========   ===========  ===========



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


<PAGE>


              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)


                                                        Nine Months Ended
                                                     -------------------------
                                                      March 31,      March 31,
                                                        1997           1996
                                                    -----------     ----------
Cash flows from operating activities:
   Net Loss                                           $(772,547)   $(2,275,847)
   Adjustments to reconcile net loss to net
     cash used in operating activities:
          Depreciation and amortization                 823,045        555,440
          Noncash charge                                    ---        182,000
          Changes in assets and liabilities-- 
          Accounts receivable                        (2,194,478)       (99,162)
          Contract receivable                        (7,056,439)           ---
          Inventories                                  (217,069)      (109,966)
          Prepaid expenses and other current assets    (366,136)         3,358
          Accounts payable                             (296,614)      (226,348)
          Deferred revenue                              320,684      3,965,000
          Accrued expenses                            2,580,930        (21,836)
                                                    -----------    -----------
              Net cash (used in) provided by 
               operating activities                  (7,178,624)     1,972,639
                                                    -----------    -----------

Cash flows from investing activities:
   Acquisition of property and equipment             (1,278,115)      (678,055)
   Increase in other assets                          (1,541,967)           ---
   Decrease in short-term investments                   644,613            ---
                                                    -----------    -----------

              Net cash used in investing activities  (2,175,469)      (678,055)
                                                    -----------    -----------
Cash flows from financing activities:
   Repayment of term loans                             (886,833)           ---
   Repayment of note payable to stockholder          (2,094,000)           ---
   Repayment of equipment line of credit                    ---        (41,000)
   Proceeds from exercise of stock options               62,710         32,278
   Issuance of Class D Preferred Stock                      ---      4,500,000
   Issuance of Class C Redeemable Convertible
       Preferred Stock, net of issuance costs               ---      3,274,349
   Reissuance (purchase) of treasury stock                   50       (230,000)
   Sale of Common Stock, net of issuance costs       30,685,000            ---
   Reclassification of deferred offering costs          926,439            ---
                                                    -----------    -----------
                  Net cash provided by financing     28,693,366      7,535,627
                    activities                      -----------    -----------

Net increase in cash and cash equivalents            19,339,273      8,830,211
Cash and cash equivalents, beginning of period        2,115,859      1,226,364
             
                                                    -----------    -----------
Cash and cash equivalents, end of period            $21,455,132    $10,056,575
                                                    ===========    ===========

Supplemental disclosure of cash flow information:
    Cash paid for interest                             $135,631       $171,617
                                                    ===========    ===========
    Cash paid for income taxes                         $150,142            ---
                                                    ===========    ===========


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

<PAGE>

              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.  BASIS OF PRESENTATION

      The condensed consolidated financial statements of Xionics Document
Technologies, Inc. and subsidiaries (the Company) presented herein have been
prepared pursuant to the rules of the Securities and Exchange Commission for
quarterly reports on Form 10-Q and do not include all of the information and
note disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended June 30, 1996,
included in the Company's Registration Statement on Form S-1 (333-4613),
declared effective by the Securities and Exchange Commission on September 26,
1996.

      The condensed consolidated financial statements and notes herein are
unaudited, but in the opinion of management, include all the adjustments
(consisting of normal, recurring adjustments) necessary to present fairly the
consolidated financial position, results of operations and cash flows of the
Company and its subsidiaries.

      The results of operations for the interim periods shown herein are not
necessarily indicative of the results to be expected for any future interim
period or for the entire year.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accompanying condensed consolidated financial statements reflect the
application of certain accounting policies described in this and other notes to
these condensed consolidated financial statements.

(a)  Principles of Consolidation

      The accompanying condensed consolidated financial statements reflect the
accounts of the Company and its wholly owned subsidiaries. All material
intercompany accounts and transactions have been eliminated in consolidation.

(b)  Contract Receivable

      The Company has an outstanding contract receivable of $6,782,256 at March
31, 1997 from a significant customer. The contract receivable represents the
amount of revenue recognized in excess of cash received under an agreement
entered into by the Company and the customer whereby the Company licensed
certain of its page description technology, including its version of the
PostScript page description language, to the customer. There was no outstanding
contract receivable due to the Company as of June 30, 1996.

(c)  Inventories

      Inventories, which include material, labor and manufacturing overhead,
are stated at the lower of cost (first-in, first- out) or market and consist of
the following:

                                              MARCH 31, 1997    JUNE 30, 1996
Raw materials                                    $748,586          $493,660
Finished Goods                                    488,518           526,375
                                             ------------      ------------
                                               $1,237,104        $1,020,035

<PAGE>

              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(d)  Property and Equipment

      The Company records property and equipment at cost and provides for
depreciation and amortization on a straight-line basis over the estimated
useful lives of the assets, as follows:

                                  ESTIMATED
                                  USEFUL LIFE   MARCH 31 ,1997    JUNE 30, 1996
Asset Classification
Computer equipment                3-5 Years      $3,419,356       $2,525,394
Furniture and fixtures            3-7 Years       1,031,059          564,865
Machinery and equipment           3-5 Years         133,608           75,612
                                                 ----------       ----------
                                                  4,584,023        3,165,871
Accumulated depreciation and                      1,819,825          996,780
 amortization                                    $2,764,198      $ 2,169,091

(e)  Deferred Offering Costs

      As of June 30, 1996, the Company had capitalized approximately $926,000
in costs related to the Company's initial public offering. These costs were
capitalized as deferred offering costs on the June 30, 1996 balance sheet and
reclassified to stockholders' equity upon completion of the offering.

(f)  Noncash Investing and Financing Activities


                                             MARCH 31, 1997   MARCH 31, 1996


Supplemental disclosure of noncash
 transactions

Accretion of Preferred Stock Dividends                ---         $  395,632
                                              ===========        ===========
Conversion of Class A Convertible
Preferred Stock to Class B Common Stock               ---         $1,229,113
                                              ===========         ==========
Forgiveness of secured promissory
note payable to a stockholder                         ---         $  565,000
                                              ===========         ==========

Acquisition of property and equipment
under capital lease                            $  140,037         $  482,000
                                              ===========         ==========
Conversion of Class C Redeemable Convertible
Preferred Stock to Common Stock                $8,231,410                ---
                                              ===========         ==========

Conversion of Class A Convertible Preferred
Stock to Common Stock                          $3,606,658                ---
                                              ===========         ==========

<PAGE>

              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

(f) Noncash Investing and Financing Activities (cont.)


Conversion of Class A Common Stock
to Common Stock                              $   13,861                    ---

Conversion of Class B Common Stock
to Common Stock                              $    5,589                    ---
                                             ==========              =========

Acquisition of Property and Equipment
under Term Loans                                    ---              $ 329,500
                                             ==========              =========
                                              
Converted to Class C Redeemable Convertible Preferred Stock---
      Class B Redeemable Preferred Stock                      ---   $2,310,596
      Secured promissory notes payable to a stockholder       ---   $1,900,000
      Senior subordinated promissory notes payable to         ---   $  228,355
      stockholders

3.  ACQUISITION OF GCA  Gesellschaft Fur Computer-Anwendung mbH

      On February 21, 1997, the Company acquired GCA Gesellschaft fur
Computer-Anwendung mbH (GCA). The Company paid $5,000,000 in cash related to
the acquisition. The acquisition has been accounted for as a purchase in
accordance with APB Opinion No. 16, and accordingly, GCA's operating results
from February 21, 1997 are included in the accompanying financial statements.

      In accordance with APB Opinion No. 16, the Company has allocated the
purchase price based on the fair value of assets acquired and liabilities
assumed. A significant portion of the purchase price, as described below, has
been identified in an independent appraisal as intangible assets using proven
valuation procedures and techniques, including approximately $5,400,000 of
in-process research and development ("in-process R&D"). Acquired intangibles
include the assembled workforce and goodwill of GCA. The intangible assets are
being amortized over their estimated useful lives of 5 GCA years.

      The purchase price of $5,750,000, including direct acquisition costs, was
allocated as follows:

              Current assets            $ 444,313
              Property and equipment       91,762
              Acquired intangibles        150,000
              In-process R&D            5,400,000
              Other assets                  9,098
              Goodwill                    200,000
              Liabilities assumed        (545,173)
                                       ----------
                                       $5,750,000
                                       ----------
<PAGE>

              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

3.  ACQUISITION OF GCA Gesellschaft Fur Computer-Anwendung mbH (CONT.)

      Unaudited pro forma operating results for the Company, assuming the
acquisition of GCA occurred on July 1, 1995 are as follows:

                                           Year Ended
                                          June 30, 1996
          Net Sales                        $25,738,717
          Net Loss                         $(1,606,262)
          Net Loss per share               $     (0.19)
                                               

                                        Six Months Ended
                                        December 31,1996
                                              
          Net Sales                        $18,818,283
          Net Income                       $ 2,187,382
          Net Income per share             $      0.19
                                                                
                        
      For purposes of these pro forma operating results, the in-process R&D was
assumed to have been written off prior to July 1, 1995, so that the operating
results presented include only recurring costs.

4.  NEW ACCOUNTING STANDARD

      In March 1997, the Financial Accounting Standards Board issued SFAS No.
128, Earnings Per Share. SFAS No. 128 establishes standards for computing and
presenting earnings per share and applies to entities with publicly held common
stock. This statement is effective for fiscal years ending after December 15,
1997 and early adoption is not permitted. When adopted, the statement will
require restatement of prior years' earnings per share. The Company will adopt
this statement for its fiscal year ended June 30, 1998. In addition, the 
Company believes that the adoption of SFAS No. 128 will not have a material
effect on its financial statements.


<PAGE>


              XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES

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

      Except for the historical information contained herein, this quarterly
Report on Form 10-Q may contain 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. Investors are cautioned that forward-looking statements
are inherently uncertain. Actual performance and results of operations may
differ materially from those projected or suggested in the forward-looking
statements due to certain risks and uncertainties, including, without
limitation, (i) the Company's relationship with Hewlett-Packard Company, from
whom the Company derives a significant portion of revenue from the supply of
software and related technology and support, (ii) the Company's dependence for
revenue upon the ability of its customers to develop and sell their own
products, which incorporate the Company's technology, to end users, and (iii)
the timely introduction of new products, such as the Company's embedded
technology for multifunction peripheral devices, and the market acceptance of
those products, in an extremely competitive and rapidly changing market where
the market success of entities providing embedded software products for paper
handling devices has historically been largely determined by their success in
becoming one of the industry standards. The market price of the Company's
common shares could be subject to significant fluctuations in response to
quarter-to-quarter variations in the Company's operating results, announcements
of technological innovations or new products by the Company or its competitors
and other events or factors. In addition, the stock market in recent years has
experienced extreme price and volume fluctuations that have particularly
affected the market prices of many technology companies. These fluctuations, as
well as general economic and market conditions, may materially and adversely
affect the market price of the Company's common shares. Because of these and
other factors, past financial performance should not be considered an indicator
of future performance. Additional information concerning certain risks and
uncertainties that would cause actual results to differ materially from those
projected or suggested in the forward-looking statements is contained in the
Company's filings with the Securities and Exchange Commission, including those
risks and uncertainties discussed in the Company's Final Prospectus, dated
September 26, 1996, in the section entitled "Risk Factors." The forward-looking
statements contained herein represent the Company's judgment as of the date of
this quarterly report on Form 10-Q, and the Company cautions readers not to
place undue reliance on such statements.


OVERVIEW

      Xionics Document Technologies, Inc. (the Company) designs, develops and
markets advanced embedded systems technology for use in mainstream office
devices such as printers, copiers, scanners and multifunction devices. The
Company derives its revenue primarily from sales of its printer software
products, which include revenue from software licenses, royalties,
engineering services and maintenance, and from sales of its image
acceleration products. Software license revenue consists of the Company's
charges for licensed source code, which generally includes initial
non-refundable fees which are recognized as revenue upon the shipment of the
source code, provided there are no significant vendor obligations. Royalty
revenue is generally earned as a percentage of net revenue from unit sales by
licensees of products that incorporate the Company's software, and is
generally recognized as earned in the Company's financial statements in the
quarter in which amounts due to the Company have been determined using
estimates based upon historical payments. Engineering services revenue is
reorganized as the services are perfomed and consists of fees paid for
porting of the Company's software to

<PAGE>

customer-specific device controllers. Payments under maintenance contracts are
due at the beginning of the contract; however, revenue is recognized ratably
over the term of the contract which is typically twelve months.

RESULTS OF OPERATIONS

      Net revenue for the three months ended March 31, 1997 increased 48% to
$9.8 million compared to $6.7 million for the three months ended March 31,
1996. Net revenue for the nine months ended March 31, 1997, increased 79% to
$27.8 million compared to $15.5 million for the nine months ended March 31,
1996. The increases in both the three and nine month periods resulted primarily
from growth in sales of the Company's printer software products, including
approximately $3.8 million and $11.8 million, respectively, of revenue
recognized under an amendment to its preexisting agreement with Hewlett-
Packard Company ("HP") which was entered into in March 1996 (the "HP
Agreement").

      Gross profit for the three months ended March 31, 1997 increased 55% to
$7.8 million from $5.0 million for the three months ended March 31, 1996. Gross
margin increased to 79% for the three months ended March 31, 1997 compared to
75% for the three months ended March 31, 1996. Gross profit for the nine months
ended March 31, 1997 increased 97% to $22.1 million from $11.3 million for the
nine months ended March 31, 1996. Gross margin increased to 80% for the nine
months ended March 31, 1997 compared to 72% for the nine months ended March 31,
1996. The increases in both the three and nine month periods were attributable
primarily to increased sales of higher margin Intelligent Peripheral System
("IPS") products and related engineering services, primarily related to the HP
Agreement, partially offset by a reduction in gross margin attributable to the
Company's image acceleration products.

      Research and development expenses increased by 72% to $3.9 million for
the three months ended March 31, 1997 from $2.3 million for the three months
ended March 31, 1996. Research and development expenses increased by 76% to
$11.2 million for the nine months ended March 31, 1997 from $6.3 million for
the nine months ended March 31, 1996. For both the three and nine month periods
the higher expense level resulted primarily from increased expenditures
relating to the Company's multifunction peripheral technology, which is
currently in development. As a percentage of revenue, research and development
expenses increased to 39% for the three months ended March 31, 1997 compared to
34% for the three months ended March 31, 1996 and decreased to 40% for the nine
months ended March 31, 1997 compared to 41% for the nine months ended March 31,
1996. The declines in research and development expenses as a percentage of
revenue were principally the result of higher revenue.

      Selling, general and administrative expenses remained relatively constant
at $2.4 million for both the three months ended March 31, 1997 and March 31,
1996. Selling, general and administrative expenses decreased by 1% to $6.9
million for the nine months ended March 31, 1997 from $7.0 million for the nine
months ended March 31, 1996. The decrease in selling, general and
administrative expenses during the nine month comparative periods is primarily
due to decreases in advertising, trade show and travel expenses relating to the
Company's image acceleration products. As a percentage of revenue, selling,
general and administrative expenses decreased to 24% and 25%, respectively, for
the three and nine month periods ended March 31, 1997, compared to 36% and 45%
for the three and nine month periods ended March 31, 1996. In addition to lower
levels of expense for the comparable nine month periods, the decline in
selling, general and administrative expenses as a percentage of revenue was
also principally the result of higher revenue.

      During the three month period ended March 31, 1997, the Company completed
the acquisition of GCA Gesellschaft fur Computer-Anwendung mbH (GCA), Freiberg,
Germany, a developer of printer drivers for the worldwide

<PAGE>

multifunction/printer peripheral market. The Company acquired all of the
outstanding shares of GCA for $5.0 million cash through its wholly-owned
subsidiary Xionics Document Technologies GmbH, Dortmund, Germany.  The
purchase price of $5.7 million included $700,000 of direct costs including
the accrual of amounts for terminating certain leases and the relocation of
employees.  The acquisition resulted in one-time charges of $5.4 million for
in-process research and development costs.

      During the three and nine month periods ended March 31, 1997, net
interest expense decreased by $64,000 and $140,000, respectively, or 98% and
62%, compared to the three and nine month periods ended March 31, 1996. This
decrease resulted primarily from the reduction in bank lines of credit and note
payable to a shareholder, which were completely paid down by December 31, 1996.
Interest income and other income increased by $281,000 and $612,000,
respectively, or 610% and 822%, during the three and nine month periods ended
March 31, 1997, compared to the three and nine month periods ended March 31,
1996. Increases in interest income resulted primarily from increased cash
balances as a result of receiving net proceeds from the Company's September 26,
1996 initial public offering.

      The Company recorded a $515,000 benefit for income taxes for the three
month period ended March 31, 1997, primarily resulting from the recognition of
a portion of the Company's deferred tax asset. The Company maintained a 
$38,000 net provision for income taxes for the nine month period ended 
March 31, 1997. In addition to the anticipated tax effect of the GCA 
acquisition, the effective tax rate for the periods differs from the statutory
rate primarily as a result of the utilization of a portion of net operating
loss carry forwards. The Company did not provide for income taxes during the
three and nine month periods ended March 31, 1996 due to the loss for the
nine month period and the expected loss for fiscal 1996.

LIQUIDITY AND CAPITAL RESOURCES

      At March 31, 1997, the Company had cash and cash equivalents of $21.5
million compared to $2.8 million at June 30, 1996. This increase is primarily
due to net proceeds resulting from the September 26, 1996 initial public
offering, partially offset by $5.0 million used in the February 21, 1997
acquisition of GCA.

      At present, the Company has available a $4.0 million working capital
revolving line of credit and a $2.0 million term loan facility with a bank,
both of which are secured by substantially all assets of the Company. The
working capital line of credit terminates on December 1, 1997, and no term loan
will be made after June 30, 1997. Under the loan facilities, the Company is
required to comply with certain restrictive covenants, which the Company was in
compliance with as of March 31, 1997. The interest rate for the working capital
line of credit is the bank's prime rate; the interest for the term loan
facility is the bank's prime rate plus 0.5%. As of March 31, 1997, there were
no outstanding borrowings under the working capital line of credit and term
loan facility. Under the terms of the working capital and term loan facilities,
the Company is prohibited from declaring or paying dividends on its Common
Stock. While the Company may in the future use private or public placements of
its securities as a source of liquidity, it has no present intention to do so.

      The Company believes that its existing cash and cash equivalent balances,
together with funds generated from operations and available borrowings under
its lines of credit will be sufficient to finance the Company's operations for
at least the next 12 months. In the event the Company acquires one or more
businesses or products, the Company's capital requirements could increase
substantially, and there can be no assurance that additional capital will be
available on terms acceptable to the Company, if at all.


<PAGE>


                          PART II -- OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES

      During the quarter ended March 31, 1997, the Company issued 100,876
      shares of unregistered common stock in reliance on exemptions available
      under Securities and Exchange Commission Rule 701, pursuant to the 
      exercise of employee stock options granted under the Company's 1995 and
      1996 Stock Option Plans (the "Plans") prior to the effectiveness of the
      Company's Registration Statement on Form S-1, declared effective
      September 26, 1996.  The average exercise price for the shares issued
      was $.2729 and the total consideration received by the Company was
      $27,529 for the issuance of such shares.

ITEM 5.  OTHER INFORMATION

      On April 1, 1997, Peter J. Simone joined the Company as President  and
      Chief Operating Officer, reporting  directly  to  Robert  E.  Gilkes,
      Chairman and Chief Executive Officer.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      (a)  Exhibits

           11   Statement re: Computation of Per Share Earnings

           27   Financial Data Schedule

           99   Xionics Document Technologies,  Inc. press release dated April
                1, 1997, announcing appointment of Peter J. Simone as  
                President  and Chief Operating Officer

      (b)  Reports on Form 8-K

           On March 7, 1997, the Company filed a report on Form 8-K reporting
           its acquisition of GCA Gesellschaft fur Computer-Anwendung mbH
           through its German subsidiary, Xionics Document Technologies GmbH,
           on February 21, 1997. On May 6, 1997, the Company filed a further
           report on Form 8-K providing financial statements and pro forma
           financial statements of GCA and of the Company and GCA on a
           consolidated basis.




<PAGE>


                                   SIGNATURES


      PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THE REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.


                               XIONICS DOCUMENT TECHNOLOGIES, INC.



NAME                                TITLE                        DATE
----                                -----                        ----
    /S/ ROBERT E. GILKES         Chairman of the Board of        May  14, 1997
-----------------------------    Directors and Chief Executive
      ROBERT E. GILKES           Officer
                   
                             
   /S/ GERARD T . FEENEY
-----------------------------
      GERARD T. FEENEY           Chief Financial Officer         May  14, 1997