<PAGE>

--------------------------------------------------------------------------------
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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
           THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED
                                 MARCH 31, 1998

                         COMMISSION FILE NO.: 000-22035
                         ------------------------------

                        METRO INFORMATION SERVICES, INC.
             (Exact name of registrant as specified in its charter)

        VIRGINIA                                      54-1112301
(State of incorporation)                 (I.R.S. Employer Identification Number)

POST OFFICE BOX 8888, VIRGINIA BEACH, VIRGINIA        23450
(Address of principal executive office)               (Zip Code)

                                 (757) 486-1900
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant 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 has been subject to the
filing requirements for the past 90 days. Yes /X/  No / /

     As of April 30, 1998, the registrant had issued and outstanding 14,839,764
shares of Common Stock, $.01 par value.


--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                       1
<PAGE>


                        METRO INFORMATION SERVICES, INC.
                                   FORM 10-Q

                               TABLE OF CONTENTS

                                                                          Page
                                                                        Number
                                                                        ------
PART I.           FINANCIAL INFORMATION:

  ITEM 1.         Balance Sheets as of
                  December 31, 1997 and March 31, 1998 (unaudited)             3

                  Statements of Income for the
                  Three Months Ended March 31, 1997 and 1998 (unaudited)       4

                  Statements of Cash Flows for the
                  Three Months Ended March 31, 1997 and 1998 (unaudited)       5

                  Statement of Changes in Shareholders' Equity for the
                  Three Months Ended March 31, 1998 (unaudited)                6

                  Notes to Financial Statements (unaudited)                    7

  ITEM 2.         Management's Discussion and Analysis
                  of Financial Condition and Results of Operations             9

PART II.           OTHER INFORMATION                                          14

SIGNATURES                                                                    16



                                       2
<PAGE>



PART I.  FINANCIAL INFORMATION:

ITEM 1.  FINANCIAL STATEMENTS

                        METRO INFORMATION SERVICES, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                       December 31,               March 31,
                                                                           1997                     1998
                                                                       ------------              -----------
                                                                                                 (Unaudited)
<S>                                                                    <C>                       <C>        
ASSETS
Current assets:
     Cash and cash equivalents                                         $22,028,594               $20,614,279
     Accounts receivable, net                                           24,136,582                29,065,444
     Prepaid expenses                                                      402,115                   459,436
     Deferred income taxes (Note 5)                                        662,687                   714,908
                                                                       ------------              -----------
        Total current assets                                            47,229,978                50,854,067
Property and equipment, net                                              5,672,548                 7,216,394
Goodwill, net (Notes 3 and 4)                                            5,327,622                 5,270,204
Other assets                                                               303,067                   136,481
                                                                       ------------              -----------
        Total assets                                                   $58,533,215               $63,477,146
                                                                       ------------              -----------
                                                                       ------------              -----------

LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
     Accounts payable                                                  $ 4,118,209               $ 2,943,733
     Accrued compensation and benefits                                   8,551,501                11,329,407
                                                                       ------------              -----------
        Total current liabilities                                       12,669,710                14,273,140
Deferred income taxes (Note 5)                                             735,632                   782,863
                                                                       ------------              -----------
        Total liabilities                                               13,405,342                15,056,003
                                                                       ------------              -----------
Shareholders' equity
        Preferred stock, $0.01 par value; authorized
          1,000,000 shares; none issued and outstanding                         --                        --
        Common stock, $0.01 par value, authorized
          50,000,000 shares; issued and outstanding
          14,819,984 shares at December 31, 1997,
          14,838,564 shares at March 31, 1998 (Note 6)                     148,200                   148,386
        Paid in capital                                                 36,085,946                36,480,468
        Retained earnings                                                8,893,727                11,792,289
                                                                       ------------              -----------
           Total shareholders' equity                                   45,127,873                48,421,143
                                                                       ------------              -----------
              Total liabilities and shareholders' equity               $58,533,215               $63,477,146
                                                                       ------------              -----------
                                                                       ------------              -----------

</TABLE>


See accompanying notes to financial statements



                                       3
<PAGE>


                        METRO INFORMATION SERVICES, INC.
                        STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>


                                                                           Three months
                                                                          ended March 31,
                                                               -------------------------------------
                                                                   1997                      1998
                                                               -----------               -----------
<S>                                                            <C>                       <C>        
Revenue                                                        $33,045,313               $47,109,515
Cost of revenue                                                 23,318,716                32,763,637
                                                               -----------               -----------
Gross profit                                                     9,726,597                14,345,878
                                                               -----------               -----------
Selling, general and administrative expenses                     6,747,023                 9,290,457
Depreciation and amortization expense                              238,744                   392,688
                                                               -----------               -----------
     Total operating expenses                                    6,985,767                 9,683,145
                                                               -----------               -----------
Operating income                                                 2,740,830                 4,662,733
Interest income                                                    104,083                   168,203
                                                               -----------               -----------
Income before income taxes                                       2,844,913                 4,830,936
Income taxes (Note 5)                                            1,013,041                 1,932,374
                                                               -----------               -----------
Net income (Note 5)                                            $ 1,831,872               $ 2,898,562
                                                               -----------               -----------
                                                               -----------               -----------
Net income per share:
     Basic (Note 5)                                            $      0.13               $      0.20
                                                               -----------               -----------
                                                               -----------               -----------
     Diluted (Note 5)                                          $      0.13               $      0.19
                                                               -----------               -----------
                                                               -----------               -----------
Weighted average number of shares of common stock 
 and common stock equivalents outstanding:
     Basic                                                      14,033,333                14,823,296
                                                               -----------               -----------
                                                               -----------               -----------
     Diluted                                                    14,045,029                14,988,967
                                                               -----------               -----------
                                                               -----------               -----------

</TABLE>


See accompanying notes to financial statements


                                       4
<PAGE>


                        METRO INFORMATION SERVICES, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                            Three months
                                                                                           ended March 31
                                                                                  --------------------------------
                                                                                     1997                  1998
                                                                                  -----------         ------------
<S>                                                                           <C>                    <C>         
Cash flows from operating activities:
  Net income                                                                    $ 1,831,872            $ 2,898,562
  Adjustments to reconcile net income to net
      cash provided by operating activities:
   Depreciation and amortization - cost of revenue                                        -                  6,662
   Depreciation and amortization - selling, general & administrative expenses       238,744                392,688
   Net loss on sale of property and equipment                                        37,114                  7,144
   Deferred income taxes                                                           (203,313)                (4,990)
   Changes in operating assets and liabilities increasing
       (decreasing) cash, net of the effects of acquisitions:
           Accounts receivable                                                   (3,257,575)            (4,928,862)
           Prepaid expenses                                                        (145,620)               (57,321)
           Other assets                                                              (7,136)               182,562
           Accounts payable                                                         343,416                109,548
           Accrued compensation and benefits                                      1,832,086              2,777,906
                                                                                -----------            -----------
                Net cash provided by operating activities                           669,588              1,383,899
                                                                                -----------            -----------
Cash flows from investing activities:
  Acquisition of property and equipment                                            (565,115)            (1,113,180)
  Acquisition of computer software                                                        -               (797,018)
  Acquisition of businesses                                                               -             (1,284,024)
  Proceeds from sale of property and equipment                                        8,420                  1,300
                                                                                -----------            -----------
                Net cash used in investing activities                              (556,695)            (3,192,922)
                                                                                -----------            -----------
Cash flows from financing activities:
  Net repayments under line of credit                                            (2,547,388)                     -
  Decrease in other assets related to issuance of 2,300,000 shares                  471,849                      -
  Proceeds from issuance of 2,300,000 shares                                     33,162,735                      -
  Proceeds from issuance of shares to Employee Stock Purchase Plan                        -                289,428
  Proceeds from issuance of shares to Employee Incentive Stock Option Plan                -                105,280
  Distributions to shareholders                                                  (9,000,000)                     -
                                                                                -----------            -----------
                Net cash provided by financing activities                        22,087,196                394,708
                                                                                -----------            -----------
Net increase (decrease) in cash and cash equivalents                             22,200,089             (1,414,315)

Cash and cash equivalents at beginning of period                                    157,372             22,028,594
                                                                                -----------            -----------

Cash and cash equivalents at end of period                                      $22,357,461            $20,614,279
                                                                                -----------            -----------
                                                                                -----------            -----------
Supplemental disclosure of cash flow information -
  Cash paid for interest                                                        $    31,757            $    14,567
                                                                                -----------            -----------
                                                                                -----------            -----------
  Cash paid for income taxes                                                    $         -            $   284,150
                                                                                -----------            -----------
                                                                                -----------            -----------

</TABLE>


See accompanying notes to financial statements.


                                       5
<PAGE>


                        METRO INFORMATION SERVICES, INC.
            STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>


                                                                                       Shareholders' Equity
                                                     ------------------------------------------------------------------------------
                                                           Common Stock                   
                                                     -------------------------            Paid in         Retained
                                                       Shares          Amount             Capital         Earnings         Total
                                                     -----------      --------          -----------      ----------     -----------
<S>                                                   <C>             <C>               <C>             <C>             <C>        
BALANCE AS OF DECEMBER 31, 1997                       14,819,984      $148,200          $36,085,946     $ 8,893,727     $45,127,873

Net proceeds from issuance of
     12,000 shares of common stock to
     Employee Stock Purchase Plan                         12,000           120              289,308              --     $   289,428

Net proceeds from issuance of 6,580
     shares of common stock to Employee
     Incentive Stock Option Plan                           6,580            66              105,214              --     $   105,280

Net income                                                    --            --                   --       2,898,562     $ 2,898,562
                                                     -----------      --------          -----------      ----------     -----------

BALANCE AS OF MARCH 31, 1998                          14,838,564      $148,386          $36,480,468     $11,792,289     $48,421,143
                                                     -----------      --------          -----------      ----------     -----------
                                                     -----------      --------          -----------      ----------     -----------

</TABLE>


See accompanying notes to financial statements.


                                       6
<PAGE>


                        METRO INFORMATION SERVICES, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       Basis of Presentation

         The information presented for March 31, 1997 and 1998, and for the 
three-month periods then ended, is unaudited, but, in the opinion of the 
Company's management, the accompanying unaudited financial statements contain 
all adjustments (consisting only of normal recurring adjustments) which the 
Company considers necessary for the fair presentation of the Company's 
financial position as of March 31, 1998 and the results of its operations and 
its cash flows for the three-month periods ended March 31, 1997 and 1998. The 
financial statements included herein have been prepared in accordance with 
generally accepted accounting principles and the instructions to Form 10-Q 
and Rule 10-01 of Regulation S-X. Accordingly, certain information and 
footnote disclosures normally included in financial statements prepared in 
accordance with generally accepted accounting principles have been condensed 
or omitted. These financial statements should be read in conjunction with the 
Company's audited financial statements for the year ended December 31, 1997, 
which were included as part of the Company's Annual Report on Form 10-K (File 
No. 000-22035). Certain 1997 amounts have been reclassified for comparability 
with the 1998 financial statement presentation.

         Results for the interim periods presented are not necessarily 
indicative of results that may be expected for the entire year.

2.       Internal Use Software Costs

         On March 4, 1998, the American Institute of Certified Public 
Accountants issued Statement of Position ("SOP") 98-1, ACCOUNTING FOR THE 
COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE. This SOP 
provides guidance on capitalizing certain costs related to computer software 
developed or obtained for internal use. The SOP is effective for financial 
statements for fiscal years beginning after December 15, 1998. Earlier 
application is encouraged in fiscal years for which annual financial 
statements have not been issued. The Company adopted the SOP effective 
January 1, 1998. The SOP causes amounts that otherwise would have been 
charged to selling, general and administrative expenses in the period 
incurred to be capitalized and amortized over the useful life of the computer 
software, typically three to seven years. Although the full impact of this 
SOP on future periods has not been estimated, management of the Company 
expects the SOP will have a favorable impact on the Company's 1998 financial 
statements. As of March 31, 1998, $145,000 in costs have been capitalized by 
the Company pursuant to this SOP. For the three months ended March 31, 1998, 
the effect of this change in accounting was to increase net income by $87,000 
and increase basic and diluted net income per share by less than $0.01. 
Because the SOP requires that computer software be ready for its intended use 
before amortization begins, no amortization expense has been recognized for 
these amounts through March 31, 1998.

3.       Acquisitions

         On July 1, 1997, the Company completed the acquisition of two 
information services technology companies using a portion of the proceeds 
from the Company's initial public offering completed in January 1997. The 
Company acquired the business operations of Data Systems Technology, Inc. 
(DST), which had offices in Columbia and Greensboro, South Carolina, for 
$133,930 with up to an additional $366,070 contingency payment due in the 
third quarter of 1998, assuming certain operating income targets are attained 
by the acquired business. The Company also acquired the business operations 
of Kansas City-based J2, Inc. d.b.a. DP Career Associates (DPCA), for $5.2 
million, of which $3.9 million was paid on July 1, 1997 and $1.3 million was 
paid on February 27, 1998 as a result of the acquired business attaining 
certain gross profit targets. Each acquisition is accounted for as a 
purchase. In connection with these acquisitions, the Company has recorded 
approximately $5,396,000 of goodwill which is being amortized on a 
straight-line basis over 30 years.

                                       7
<PAGE>


4.       Goodwill

         Goodwill represents the excess of cost over fair value of net 
tangible assets acquired through acquisitions and is amortized on a 
straight-line basis over its estimated useful life, generally 30 years. 
Management periodically assesses whether there has been a permanent 
impairment in the value of goodwill. The amount of such impairment is 
determined by comparing anticipated undiscounted future cash flows to the 
carrying value of the related goodwill.

5.       Income Taxes

         Before January 1, 1997, the Company, with the consent of its 
shareholders, was taxed under the provisions of Subchapter S of the Internal 
Revenue Code of 1986, which provides that, in lieu of corporate income taxes, 
the shareholders of the S Corporation are taxed on their proportionate share 
of the Company's taxable income. Effective January 1, 1997, the Company 
terminated its S Corporation election and became a C Corporation subject to 
corporate income taxes. The cumulative effect of this change, through March 
31, 1997, was to reduce income taxes appearing on the Statement of Income for 
the three months ended March 31, 1997 by $125,000 and create a current 
deferred tax asset and a long-term deferred tax liability. The balances of 
the deferred tax accounts at December 31, 1997 and March 31, 1998 relate 
primarily to differences in the timing of deductions of health care claims 
reserves, vacation liabilities, depreciation and amortization for financial 
statement and tax purposes.

6.       Initial Public Offering

         On January 29, 1997, the Company consummated an initial public 
offering of 3,100,000 shares of its Common Stock at a price of $16.00 per 
share, of which 2,300,000 shares were issued and sold by the Company and 
800,000 shares were sold by a shareholder of the Company. Shortly thereafter 
the representatives of the several underwriters exercised their 
over-allotment option resulting in the sale of 465,000 shares by other 
shareholders of the Company. The net proceeds to the Company from the 
offering were $33,144,000. The Company did not receive any proceeds from the 
sale of shares by the selling shareholders.

7.       Credit Facilities

         The Company maintains credit facilities of $39,900,000. The 
facilities are provided in equal amounts by three banks and have a five-year 
maturity which may be extended each year for an additional year. If the 
facilities are not extended, principal on one of the facilities must be 
repaid in four equal annual installments while the other two facilities 
require principal repayment at the end of four years. Until that time, 
interest only is payable monthly. Two of the facilities allow the Company to 
select among prime rate and London Interbank Offered Rate (LIBOR) based 
interest rates while the third has only LIBOR based interest rates. All of 
the facilities have interest rates that increase as the balance outstanding 
under the facilities increases. At March 31, 1998 and December 31, 1997, no 
amounts were outstanding under the facilities. The Company has selected a 
30-day LIBOR based rate and, if any borrowings were outstanding under the 
facilities at March 31, 1998, the rate on such borrowings would have ranged 
from 6.0% to 6.6%. The facilities also contain fees, ranging from 0.125% to 
0.3125% annually, which are charged on the unused portion of the facilities. 
The facilities are collateralized by accounts receivable of the Company.

         The credit facilities include several covenants, including one 
requiring the maintenance of a certain tangible net worth ratio, which limits 
the amount of dividends that can be paid. The covenants also impose limits on 
incurring additional debt and require a certain debt service coverage ratio 
to be maintained. Amounts advanced under the facilities can be used for 
acquisitions and general working capital purposes.

                                       8
<PAGE>


PART I
ITEM 2:

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

         CAUTIONARY STATEMENT UNDER THE "SAFE-HARBOR" PROVISIONS OF THE 
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: INCLUDED IN THIS REPORT AND 
OTHER INFORMATION PRESENTED BY MANAGEMENT FROM TIME TO TIME, INCLUDING, BUT 
NOT LIMITED TO, ANNUAL REPORTS TO SHAREHOLDERS, QUARTERLY SHAREHOLDER 
LETTERS, FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, NEWS RELEASES 
AND INVESTOR PRESENTATIONS, ARE FORWARD-LOOKING STATEMENTS ABOUT BUSINESS 
STRATEGIES, MARKET POTENTIAL, FUTURE FINANCIAL PERFORMANCE AND OTHER MATTERS 
WHICH REFLECT MANAGEMENT'S EXPECTATIONS AS OF THE DATE OF THIS REPORT. 
WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," 
"EXPECTS," "SEEKS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY 
FORWARD-LOOKING STATEMENTS. THERE ARE A NUMBER OF IMPORTANT FACTORS THAT 
COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE 
INDICATED BY SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, WITHOUT 
LIMITATION: THE COMPANY'S ABILITY TO ATTRACT, DEVELOP AND RETAIN QUALIFIED 
CONSULTANTS, THE COMPANY'S ABILITY TO OPEN NEW OFFICES, THE COMPANY'S ABILITY 
TO EFFECTIVELY IDENTIFY, MANAGE AND INTEGRATE ACQUISITIONS, CHANGES IN 
CONSULTANT UTILIZATION AND PRODUCTIVITY RATES, THE COMPANY'S ABILITY TO 
ACQUIRE OR DEVELOP ADDITIONAL SERVICE OFFERINGS, CLIENT DECISIONS TO REDUCE 
OR INCREASE IT SERVICES OUTSOURCING, EARLY TERMINATION OF CLIENT CONTRACTS 
WITHOUT PENALTY, CHANGES IN THE COMPANY'S DEPENDENCE ON SIGNIFICANT CLIENTS, 
CHANGES IN GROSS MARGINS DUE TO A VARIETY OF FACTORS (INCLUDING INCREASED 
WAGE AND BENEFIT COSTS THAT ARE NOT OFFSET BY BILL RATE INCREASES), THE TYPES 
OF SERVICES PERFORMED BY THE COMPANY DURING A PARTICULAR PERIOD AND 
COMPETITION. PLEASE REFER TO A DISCUSSION OF THESE AND OTHER FACTORS IN THE 
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 
1997 AND OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS. THE COMPANY 
DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE PUBLICLY THESE FORWARD-LOOKING 
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR 
OTHERWISE.

         THE FOLLOWING SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL 
STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT. THE COMPANY'S 
FISCAL YEAR ENDS ON DECEMBER 31.

                                    OVERVIEW

         Metro Information Services, Inc. ("Metro" or the "Company") provides 
a wide range of information technology ("IT") consulting and custom software 
development services through 32 offices in the United States and Puerto Rico. 
The Company's more than 1,800 consultants, 65% of whom are salaried, work 
with clients' internal IT departments on all aspects of computer systems and 
applications development. Services performed by Metro include application 
systems development and maintenance, IT architecture and engineering, systems 
consulting, project outsourcing and general support services. The Company 
supports all major computer technology platforms (mainframe, mid-range, 
client/server and network environments) and supports client projects using a 
broad range of software applications. For example, the Company implements 
SAP's client/server software, custom develops Oracle, Informix, DB2, 
VisualBasic and C++ applications, implements and supports Windows NT, Novell 
and UNIX based network environments and supports numerous other application 
environments.

         Metro's clients operate in a wide variety of industries including 
communications, distribution, financial services, health care, information 
technology, manufacturing and utilities. The Company emphasizes long-term 
relationships with its clients rather than one-time projects or assignments. 
During the 12 months ended March 31, 1998, the Company performed IT services 
for 418 clients (excluding clients that generated less than $25,000 in 
revenue during such period).

         IT services are primarily provided by the Company through 
supplemental IT services arrangements and, to a lesser extent, through 
project outsourcing services arrangements. Substantially all services are 
billed on a time and materials basis. During the three months ended March 31, 
1998, the Company estimates that supplemental IT services accounted for more 
than 90% and project outsourcing services accounted for less than 10% of the 
Company's revenue.

                                       9
<PAGE>


         Revenue growth is derived primarily from increases in the number of 
consultants placed with existing and new clients. Between March 31, 1997 and 
March 31, 1998, the number of full time consultants grew from 1,358 to 1,802, 
including consultants gained through acquisitions. In addition, over the same 
period, the Company increased the average billing rates charged to clients 
for consultants in an attempt to keep pace with the increased costs of 
consultants.

         The Company's past financial performance should not be relied on as 
an indication of future performance. Period-to-period comparisons of the 
Company's financial results are not necessarily meaningful indicators of 
future performance.

                             RESULTS OF OPERATIONS

         FOR PURPOSES OF THE FOLLOWING DISCUSSION, A MATURE OFFICE IS AN 
OFFICE THAT WAS OWNED BY THE COMPANY FOR AT LEAST 12 MONTHS AT THE BEGINNING 
OF THE EARLIER PERIOD BEING COMPARED AND A NEW OFFICE IS AN OFFICE OPENED OR 
ACQUIRED THEREAFTER.

         THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED 
         MARCH 31, 1997

         REVENUE. Revenue increased $14.1 million, or 42.6%, to $47.1 million 
for the three months ended March 31, 1998 from $33.0 million for the three 
months ended March 31, 1997. This increase is primarily a result of increased 
billings to existing clients, the addition of new clients and increased 
billing rates charged for the Company's consultants.

         COST OF REVENUE. Cost of revenue increased $9.5 million, or 40.5%, 
to $32.8 million for the three months ended March 31, 1998 from $23.3 million 
for the three months ended March 31, 1997. Cost of revenue increased 
primarily due to compensation and benefits associated with growth in the 
number of consultants. As a percentage of revenue, cost of revenue decreased 
to 69.5% for the three months ended March 31, 1998 from 70.6% for the three 
months ended March 31, 1997 primarily because of bill rates to clients 
increasing faster than pay rates to consultants during the period.

         GROSS PROFIT. Gross profit increased $4.6 million, or 47.5%, to 
$14.3 million for the three months ended March 31, 1998 from $9.7 million for 
the three months ended March 31, 1997. As a percentage of revenue, gross 
profit increased to 30.5% for the three months ended March 31, 1998 from 
29.4% for the three months ended March 31, 1997.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and 
administrative expenses increased $2.6 million, or 37.7%, to $9.3 million for 
the three months ended March 31, 1998 from $6.7 million for the three months 
ended March 31, 1997. This increase is due primarily to costs associated with 
recently opened offices, growth of administrative staff in mature offices, 
hiring additional corporate staff to support the increased number of offices 
and development of the Company's proprietary business systems. As a 
percentage of revenue, selling, general and administrative expenses decreased 
to 19.7% for the three months ended March 31, 1998 from 20.4% for the three 
months ended March 31, 1997.

         DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization 
expense increased $154,000, or 64.5%, to $393,000 for the three months ended 
March 31, 1998 from $239,000 for the three months ended March 31, 1997. This 
increase is primarily attributable to depreciation on additions to computer 
equipment and software and, to a lesser extent, amortization of goodwill 
related to the Company's acquisitions. As a percentage of revenue, 
depreciation and amortization expense increased to 0.9% for the three months 
ended March 31, 1998 from 0.7% for the three months ended March 31, 1997.

         OPERATING INCOME. Operating income increased $2.0 million or 70.1%, 
to $4.7 million for the three months ended March 31, 1998 from $2.7 million 
for the three months ended March 31, 1997. As a percentage of revenue, 
operating income increased to 9.9% for the three months ended March 31, 1998 
from 8.3% for the three months ended March 31, 1997. The improvement in 
operating income margin is in part the result of the Company's centralization 
of administrative functions and leverage obtained from the Company's 
proprietary business systems.

                                       10
<PAGE>


         INTEREST INCOME. Interest income increased by $64,000, or 61.6%, to 
$168,000 for the three months ended March 31, 1998 from $104,000 for the 
three months ended March 31, 1997. This change reflects a decrease in the 
average level of borrowings during the period and investment of a portion of 
the proceeds of the Company's January 1997 initial public offering of Common 
Stock in interest bearing instruments.

         INCOME BEFORE INCOME TAXES. Income before income taxes increased 
$2.0 million, or 69.8%, to $4.8 million for the three months ended March 31, 
1998 from $2.8 million for the three months ended March 31, 1997. As a 
percentage of revenue, income before income taxes increased to 10.3% for the 
three months ended March 31, 1998 from 8.6% for the three months ended March 
31, 1997.

         INCOME TAXES. The Company's effective tax rate was 40% for the three 
months ended March 31, 1998 and 35.6% for the three months ended March 31, 
1997. Income taxes increased $0.9 million or 90.7%, to $1.9 million for the 
three months ended March 31, 1998 from $1.0 million for the three months 
ended March 31, 1997. As a percentage of revenue, income taxes increased to 
4.1% for the three months ended March 31, 1998 from 3.1% for the three months 
ended March 31, 1997. In 1996, the Company was an S corporation for federal 
and certain state income tax purposes. Income taxes for the three months 
ended March 31, 1997 include a one-time reduction in income tax expense of 
$125,000, which represents the cumulative effect of the Company converting 
from an S corporation to a C corporation effective January 1, 1997. Excluding 
the $125,000 one-time reduction in income taxes, income taxes for the three 
months ended March 31, 1997 would have been $1.1 million, the Company's 
effective tax rate would have been 40% and income taxes for the three months 
ended March 31, 1998 would have represented an increase of $0.8 million or 
69.8%.

         NET INCOME. Net income increased $1.1 million, or 58.2%, to $2.9 
million for the three months ended March 31, 1998 from $1.8 million for the 
three months ended March 31, 1997. As a percentage of revenue, net income 
increased to 6.2% for the three months ended March 31, 1998 from 5.5% for the 
three months ended March 31, 1997.

         EARNINGS PER SHARE. Diluted earnings per share increased $0.06, or 
46.2%, to $0.19 for the three months ended March 31, 1998 from $0.13 for the 
three months ended March 31, 1997. Excluding the $125,000 one-time credit 
described under `INCOME TAXES' above, diluted earnings per share for the 
three months ended March 31, 1997 would have been $0.12 and diluted earnings 
per share for the three months ended March 31, 1998 would have represented an 
increase of $0.07 or 58.3%.

The following table sets forth the percentage of revenue and the percentage 
change from the prior period of certain items reflected in the statements of 
income for the:

<TABLE>
<CAPTION>


                                                       THREE MONTHS ENDED              PERCENTAGE
                                                             MARCH 31,                   CHANGE
                                                      PERCENTAGE OF REVENUE          1998 OVER 1997
                                                     -----------------------         --------------
                                                      1997             1998
                                                     ------            -----  
<S>                                                  <C>               <C>           <C>  
Revenue                                              100.0%            100.0%             42.6%
Cost of revenue                                       70.6              69.5              40.5
                                                     ------            -----  
Gross profit                                          29.4              30.5              47.5
                                                     ------            -----  
Selling, general and administrative expenses          20.4              19.7              37.7
Depreciation and amortization expense                  0.7               0.9              64.5
                                                     ------            -----  
Total operating expenses                              21.1              20.6              38.6
                                                     ------            -----  
Operating income                                       8.3               9.9              70.1
Interest income                                        0.3               0.4              61.6
                                                     ------            -----  
Income before income taxes                             8.6              10.3              69.8
Income taxes                                           3.1               4.1              90.7
                                                     ------            -----  
Net income                                             5.5%              6.2%             58.2
                                                     ------            -----  
                                                     ------            -----  

</TABLE>


                                       11
<PAGE>


SELECTED QUARTERLY RESULTS AND SEASONALITY

         The following table sets forth certain quarterly operating 
information for each of the 13 quarters ending with the quarter ended March 
31, 1998, both in dollars and as a percentage of revenue. This information 
was derived from the unaudited financial statements of the Company which, in 
the opinion of management, were prepared on the same basis as the financial 
statements contained elsewhere in this report and include all adjustments, 
consisting of normal recurring adjustments, which management considers 
necessary for the fair presentation of the information for the periods 
presented. The financial data shown below should be read in conjunction with 
the financial statements and notes thereto included in this report. Results 
for any fiscal quarter are not necessarily indicative of results for the full 
year or for any future quarter.

<TABLE>
<CAPTION>

                                                      Gross Profit          Operating Income
                                                     ---------------        ----------------
                                                              % of                    % of
Statements of Income Data                   Revenue  Amount  Revenue        Amount   Revenue
-------------------------                   -------  ------  -------        ------   -------
                                                             (Dollars in thousands)
<S>                                          <C>     <C>     <C>            <C>      <C>
1995:

         March............................   19,760   5,732     29.0         1,422      7.2
         June.............................   20,695   6,195     29.9         1,683      8.1
         September........................   21,881   6,117     28.0         1,428      6.5
         December.........................   23,568   6,786     28.8           790(1)   3.4(1)

1996:

         March............................   26,328   7,726     29.3         2,107      8.0
         June.............................   27,812   8,452     30.4         2,248      8.1
         September........................   29,142   8,817     30.3         2,431      8.3
         December.........................   30,681   9,216     30.0         2,314      7.5

1997:

         March............................   33,045   9,727     29.4         2,741      8.3
         June.............................   35,883  10,841     30.2         3,409      9.5
         September........................   40,569  12,580     31.0         4,314     10.6
         December.........................   43,080  13,351     31.0         4,612     10.7

1998:

         March............................   47,110  14,346     30.5         4,663      9.9

</TABLE>

--------------
(1) Includes the $770,000 of non-recurring, non-cash compensation expense 
    charged to selling, general and administrative expenses accrued in the 
    fourth quarter of 1995 for stock issued for services performed by 
    employees in 1995. Excluding the effect of such expense, income from 
    operations and income from operations as a percentage of revenue for the 
    fourth quarter of 1995 would have been $1.6 million and 6.6%, respectively.

         Metro's operating results are adversely affected when client 
facilities close due to holidays or inclement weather. The Company generally 
experiences a certain amount of seasonality in the fourth quarter due to the 
number of holidays and closings of client facilities during that quarter. 
Further, the Company generally experiences lower operating results in the 
first quarter due in part to the timing of unemployment and FICA tax accruals 
and delays in clients' contract renewal related to clients' budget approval 
processes.

                                       12
<PAGE>


                        Liquidity and Capital Resources

         In January 1997, the Company completed an initial public offering of 
3,100,000 shares of its Common Stock at a price of $16.00 per share. Of the 
3,100,000 shares, 2,300,000 shares were issued and sold by the Company and 
800,000 shares were sold by a shareholder of the Company. Shortly thereafter 
the representatives of the several underwriters exercised their 
over-allotment option resulting in the sale of 465,000 shares by other 
shareholders of the Company. The net proceeds to the Company were 
approximately $33,144,000. The Company did not receive any of the proceeds 
from the sale of shares by the selling shareholders. The Company used 
$4,352,920 of the proceeds from the initial public offering during the third 
quarter of 1997 and $1,284,024 during the three months ended March 31, 1998 
for the acquisitions of Data Systems Technology, Inc. and DP Career 
Associates described above.

         The Company made its first sale of stock under the Metro Information 
Services, Inc. Employee Stock Purchase Plan on September 30, 1997. The 
Company sold 10,000 shares for an aggregate purchase price of $167,350 on 
September 30, 1997, 9,984 shares for $184,587 on December 31, 1997 and 12,000 
shares for $289,428 on March 31, 1998.

         During the three months ended March 31, 1998, certain employees 
exercised stock options which vested on December 31, 1997 pursuant to the 
1997 Employee Incentive Stock Option Plan. Total proceeds from the issuance 
of stock for option exercises during the three months ended March 31, 1998 
were $105,280.

         The Company funded its operations primarily from cash generated by 
operations. Net cash provided by operations was $1,383,899 for the three 
months ended March 31, 1998 and consisted primarily of net income of 
$2,898,562 and, excluding the effects of acquisitions, increases in accounts 
receivable of $4,928,862 and accrued compensation and benefits of $2,777,906. 
The increases in accounts receivable and accrued compensation and benefits 
are primarily due to the revenue growth experienced during the three months 
ended March 31, 1998. The Company's working capital was $36,581,000 
at March 31, 1998 compared to $34,560,000 at December 31, 1997.

         The Company has $39,900,000 of credit facilities provided in equal 
amounts by three banks. The facilities have a five-year maturity which may be 
extended each year for an additional year. If the facilities are not 
extended, principal on one of the facilities must be repaid in four equal 
annual installments while the other two facilities require principal 
repayment at the end of four years. Until that time interest only is payable 
monthly. Two of the facilities allow the Company to select among prime rate 
and London Interbank Offered Rate (LIBOR) based interest rates while the 
third has only LIBOR based interest rates. All of the facilities have 
interest rates which increase as the balance outstanding under the facilities 
increases. At March 31, 1998, no amounts were outstanding under the 
facilities. The Company has selected a 30-day LIBOR based rate and, if any 
borrowings were outstanding under the facilities at March 31, 1998, the rate 
on such borrowings would have ranged from 6% to 6.6%. The facilities also 
contain fees, ranging from 0.125% to 0.3125% annually, which are charged on 
the unused portion of the facilities. The facilities are collateralized by 
accounts receivable of the Company.

         The credit facilities include several covenants, including one 
requiring the maintenance of a certain tangible net worth ratio, which limit 
the amount of dividends that can be paid. The covenants also impose limits on 
incurring additional debt and require a certain debt service coverage ratio 
to be maintained. Amounts advanced under the facilities can be used for 
acquisitions and general working capital purposes.

         The Company believes that the net proceeds from its initial public 
offering, combined with available funds under its credit facilities and cash 
flows from operations will be adequate to meet its needs for working capital 
and capital expenditures for at least the next two years. Any significant 
acquisitions, however, may require additional debt and equity financing.

                                       13
<PAGE>



PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

(D) USE OF PROCEEDS FROM REGISTERED SECURITIES. The effective date of the 
Company's Securities Act registration statement on Form S-1 was January 29, 
1997. The Commission file number is 000-22035. Between the effective date and 
March 31, 1998, the expenses incurred in connection with the issuance and 
distribution of the securities registered were as follows:

<TABLE>
<CAPTION>

                                                        AS PREVIOUSLY             ADDITIONAL
                                                     REPORTED ON FORM 10-     EXPENSES INCURRED       EXPENSES INCURRED
                                                     K FOR PERIOD ENDING          THROUGH              TO DATE AS OF
DIRECT OR INDIRECT PAYMENTS TO OTHERS:                DECEMBER 31, 1997        MARCH 31, 1998          MARCH 31, 1998
--------------------------------------               --------------------     ------------------      -----------------
<S>                                                       <C>                     <C>                  <C>        
Underwriting discounts and commissions                   $2,576,000                  --                   $ 2,576,000
Other expenses                                            1,080,366                  --                     1,080,366
                                                         ----------               ---------               -----------
Total expenses                                           $3,656,366                  --                   $ 3,656,366
                                                         ----------               ---------               -----------
                                                         ----------               ---------               -----------
Net offering proceeds after total expenses
 above                                                                                                    $33,143,634
                                                                                                          -----------
                                                                                                          -----------

</TABLE>


Between the effective date and March 31, 1998, net offering proceeds of
$33,143,634 were used for the following purposes:

<TABLE>
<CAPTION>


                                                     AS PREVIOUSLY REPORTED
                                                     ON FORM 10-K FOR THE                                      USE OF PROCEEDS
                                                         PERIOD ENDING                      CHANGES                THROUGH
DIRECT OR INDIRECT PAYMENTS TO OTHERS:                 DECEMBER 31, 1997              IN USE OF PROCEEDS        MARCH 31, 1998
--------------------------------------               --------------------             ------------------      -----------------
<S>                                                      <C>                              <C>                    <C>         
Acquisition of other businesses                           $ 4,352,920                     1,284,024               $ 5,636,944
Repayment of indebtedness                                  11,962,829                        --                    11,962,829
Temporary investments:
   Municipal Bonds                                         16,827,885                    (1,284,024)               15,543,861
                                                          -----------                    ----------               -----------
Total Use of Proceeds                                     $33,143,634                        --                   $33,143,634
                                                          -----------                    ----------               -----------
                                                          -----------                    ----------               -----------

</TABLE>


The use of proceeds does not represent a material change in the use of 
proceeds described in the prospectus. There have been no other changes to the 
information provided by the Company on Form SR for the period ended April 30, 
1997, on Form 10-Q for the period ended September 30, 1997 or on Form 10-K 
for the period ended December 31, 1997.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable

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

         None


                                       14
<PAGE>


ITEM 5.  OTHER INFORMATION

     On April 24, 1998, Steven A. Lurus, then the Company's Secretary, 
Director of Finance and Chief Accounting Officer, tendered his resignation 
from all positions he holds with the Company effective May 31, 1998. 
Effective April 30, 1998, Robert J. Eveleigh, Director, Vice President of 
Finance, Treasurer and Chief Financial Officer of the Company, was named to 
replace Mr. Lurus as Secretary of the Company. 

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits required by Item 601 of Regulation S-K:

                 ( i )    11 Computation of earnings per share
                 ( ii )   27 Financial Data Schedule


                                       15
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, 
the Company has duly caused this Form 10-Q to be signed on its behalf by the 
undersigned, thereunto duly authorized, in the City of Virginia Beach, 
Commonwealth of Virginia on the 15th day of May, 1998.

                                       Metro Information Services, Inc.

                                  By          /s/  John H. Fain
                                       -----------------------------------------
                                                   John H. Fain
                                       President and Principal Executive Officer

                                  By       /s/  Robert J. Eveleigh
                                       -----------------------------------------
                                                Robert J. Eveleigh
                                           Principal Financial Officer


                                       16