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

________________

FORM 10-Q
________________

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

COMMISSION FILE NUMBER: 000-24539

ECLIPSYS CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE
(State of Incorporation) 65-0632092
(IRS Employer Identification Number)

777 East Atlantic Avenue
Suite 200
Delray Beach, Florida
33483
(Address of principal executive offices)

(561)-243-1440
(Telephone number of registrant)

      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 for the past 90 days.
Yes [X] No [   ]

      Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Class	Shares outstanding as of May 8, 2001
Common Stock, $.01 par value		43,308,671

TABLE OF CONTENTS

PART I.
	Condensed Consolidated Balance Sheets (unaudited) — As of March 31, 2001 and December 31, 2000
	Condensed Consolidated Statements of Operations (unaudited) — For the Three Months ended March 31, 2001 and 2000
	Condensed Consolidated Statements of Cash Flows (unaudited) — For the Three Months ended March 31, 2001 and 2000
	Notes to Condensed Consolidated Financial Statements (unaudited)
	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Quantitative and Qualitative Disclosures About Market Risk
PART II.
	Exhibits and Reports on Form 8-K

ECLIPSYS CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2001

INDEX

PART I	Financial Information
Item 1.	Condensed Consolidated Balance Sheets (unaudited) — As of March 31, 2001 and December 31, 2000
	Condensed Consolidated Statements of Operations (unaudited) — For the Three Months ended March 31, 2001 and 2000
	Condensed Consolidated Statements of Cash Flows (unaudited) — For the Three Months ended March 31, 2001 and 2000
	Notes to Condensed Consolidated Financial Statements (unaudited)
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
PART II	Other Information
Item 6.	Exhibits and Reports on Form 8-K

2

PART I.

ITEM 1.

ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF MARCH 31, 2001 AND DECEMBER 31, 2000
(IN THOUSANDS)

		MARCH 31, 2001			DECEMBER 31, 2000
ASSETS
Current assets:
	Cash and cash equivalents	$	145,358		$	20,799
	Accounts receivable, net		63,784			63,912
	Inventory		313			1,065
	Other current assets		6,617			6,854
Total current assets			216,072			92,630
Property and equipment, net			19,787			16,801
Capitalized software development costs, net			12,046			11,469
Acquired technology, net			15,434			19,714
Intangible assets, net			5,585			7,831
Other assets			8,347			7,667
TOTAL ASSETS		$	277,271		$	156,112
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Deferred revenue	$	53,570		$	45,970
	Current portion of long-term debt		—			314
	Other current liabilities		21,499			28,361
Total current liabilities			75,069			74,645
Deferred revenue			3,374			5,258
Long-term debt			—			1,177
Other long-term liabilities			1,408			1,628
Stockholders’ equity:
	Common stock		432			371
	Unearned stock compensation		(140	)		(176	)
	Additional paid-in capital		387,071			259,903
	Accumulated deficit		(189,635	)		(186,459	)
	Accumulated other comprehensive loss		(308	)		(235	)
Total stockholders’ equity			197,420			73,404
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	277,271		$	156,112

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

		THREE MONTHS ENDED
		MARCH 31,
		2001			2000
REVENUES
	Systems and services	$	51,760		$	60,640
	Hardware		2,911			4,050
TOTAL REVENUES			54,671			64,690
COSTS AND EXPENSES
	Cost of systems and services revenues		30,813			32,277
	Cost of hardware revenues		2,283			3,276
	Sales and marketing		10,643			9,275
	Research and development		9,363			9,774
	General and administrative		2,347			2,326
	Depreciation and amortization		3,802			3,654
	Transaction costs		—			3,100
TOTAL COSTS AND EXPENSES			59,251			63,682
INCOME (LOSS) FROM OPERATIONS			(4,580	)		1,008
Interest income, net			1,404			385
Other income, net			—			3,596
NET INCOME (LOSS)		$	(3,176	)	$	4,989
BASIC NET INCOME (LOSS) PER COMMON SHARE		$	(0.08	)	$	0.14
DILUTED NET INCOME (LOSS) PER COMMON SHARE		$	(0.08	)	$	0.13
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING			41,295			36,504
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING			41,295			38,645

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4

ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(IN THOUSANDS)

				THREE MONTHS ENDED
				MARCH 31,
				2001			2000
OPERATING ACTIVITIES
Net Income (Loss)				$	(3,176	)	$	4,989
Adjustments to reconcile net income (loss) to net cash provided by   (used in) operating activities:
		Depreciation and amortization			9,690			8,702
		Provision for bad debts			600			485
		Gain on sale of investments			—			(4,462	)
		Write-down of investments			—			800
		Stock compensation expense			36			36
		Changes in operating assets and liabilities, net of acquisitions:
			Accounts receivable		(472	)		(6,691	)
			Inventory		602			(21	)
			Other current assets		237			5,317
			Other assets		(1,011	)		756
			Deferred revenue		5,716			(4,442	)
			Other current liabilities		(6,862	)		(10,328	)
			Other liabilities		(220	)		(116	)
			Total adjustments to reconcile net income (loss) to net cash       provided by (used in) operating activities		8,316			(9,964	)
			NET CASH PROVIDED BY (USED IN) OPERATING           ACTIVITIES		5,140			(4,975	)
INVESTING ACTIVITIES
	Purchase of property and equipment				(4,544	)		(1,938	)
	Purchase of investments				—			(7,905	)
	Sale of investments				—			12,432
	Capitalized software development costs				(1,702	)		(1,800	)
			NET CASH (USED IN) PROVIDED BY INVESTING         ACTIVITIES		(6,246	)		789
FINANCING ACTIVITIES
	Issuance of common stock in public offering				123,231			—
	Payments on borrowings				(1,491	)		—
	Exercise of stock options				3,431			952
	Employee stock purchase plan				567			748
	Exercise of warrants				—			4
			NET CASH PROVIDED BY FINANCING ACTIVITIES		125,738			1,704
EFFECT OF EXCHANGE RATES ON CASH AND
CASH EQUIVALENTS					(73	)		454
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					124,559			(2,028	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					20,799			33,956
CASH AND CASH EQUIVALENTS, END OF PERIOD				$	145,358		$	31,928

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART TO THESE UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5

ECLIPSYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

      The condensed consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results for the periods presented. All such adjustments are considered of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results.

      Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K filed March 15, 2001.

2. ACCOUNTS RECEIVABLE

      The current portion of unbilled accounts receivable was $12.8 million and $12.5 million as of March 31, 2001 and December 31, 2000, respectively, and is included in accounts receivable in the accompanying condensed consolidated balance sheets. The non-current portion of unbilled accounts receivable was $3.5 million and $3.3 million as of March 31, 2001 and December 31, 2000, respectively, and is included in other assets in the accompanying condensed consolidated balance sheets.

3. PUBLIC OFFERING

      During the quarter ended March 31, 2001, the Company completed a follow-on public offering for 5,750,000 shares of its common stock. Net proceeds from the offering were approximately $123.2 million.

4. INVESTMENTS

      During the quarter ended March 31, 2000, the Company recorded a gain on its investment in Shared Medical Systems Corp. (“SMS”) of approximately $4.5 million. The investment was made in connection with a proposed merger with SMS that was not consummated.

      Additionally, during the quarter ended March 31, 2000, the Company recorded a charge of approximately $800,000 to write down certain equity securities to their net realizable value.

5. TERMINATION OF MERGER

      On March 30, 2000, the Company signed an agreement to merge with Neoforma.com, Inc. (“Neoforma”), a California-based, business-to-business e-commerce services provider in the medical products, supplies and equipment industry. The merger was subject to the approval of stockholders of both the Company and Neoforma and certain other conditions. Subsequent to March 31, 2000, the Company and Neoforma agreed to terminate the Merger Agreement without the payment of a termination fee.

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PART I.

ITEM 2.

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

      This report contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under the caption “Certain Factors that May Affect Future Operating Results/Risk Factors,” presented from time to time in the Company’s filings with the Securities and Exchange Commission, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW

      We are a healthcare information technology company. Our solutions assist healthcare organizations in achieving balanced outcomes through an appropriate and sustainable combination of clinical quality, efficient use of resources and patient satisfaction. We have designed our solutions to help our customers deliver better healthcare through information. Our solutions consist of a comprehensive service offering and seven integrated software suites that we market under the Sunrise brand name.

      Our software applications consist of individual product modules that can be implemented in any combination and integrated with our customers’ existing information technology systems. We believe the open, modular nature of our software architecture reduces the overall cost of ownership and reduces the time to productive use because our solutions do not require the initial investment and disruption associated with a complete replacement of a customer’s existing legacy systems. To facilitate rapid adoption by our customers, we have engineered our solutions to take advantage of Web-based technologies. Our software applications are available to our customers for implementation in-house or through our remote hosting service, and are designed to work in a variety of healthcare settings.

      In addition, we provide a range of services to our customers, including implementation, integration, support, maintenance and training. We also provide outsourcing, remote hosting, networking services and business solutions consulting to assist customers in meeting their healthcare information technology requirements. Through this comprehensive service offering and our integrated software suites, we provide our customers with an end-to-end solution for their clinical, financial and administrative information needs.

      We market our solutions primarily to large healthcare organizations, particularly academic medical centers. We have one or more of our products installed or being installed in over 1,400 facilities in the United States and 9 other countries. We maintain decentralized sales and customer support teams in each of our five North American regions to provide direct, sustained customer contact.

      In 2000, in response to our customers’ desire for flexible pricing and more comprehensive bundled information technology solutions, we began to offer our customers the option of purchasing our solutions under arrangements that bundled the software license fees (including the right to future products within the suite sold), implementation, maintenance, outsourcing, remote hosting, networking services and other related services in one comprehensive contract that provides for monthly or annual payments over the term of the contract. We generally recognize revenues under these arrangements on a monthly basis over the term of the contract, which typically ranges from seven to ten years.

RESULTS OF OPERATIONS

      Total revenues for the quarter ended March 31, 2001 decreased $10.0 million, or 15.5%, to $54.7 million compared with $64.7 million for the first quarter 2000. Systems and services revenues decreased $8.9 million, or 14.6%, to $51.8 million compared with $60.6 million for the first quarter of 2000. This decrease in revenue was primarily attributable to the shift toward providing comprehensive bundled solutions, which represented a larger portion of our revenues in the first quarter of 2001 than in the first quarter of 2000, and the completion of the implementations under traditional licensing arrangements with some of our customers.

7

      Hardware revenues for the quarter ended March 31, 2001 decreased $1.1 million, or 28.1%, to $2.9 million compared with $4.1 million for the first quarter 2000. The decrease was primarily due to decreased volume of hardware sales a result of less hardware-intensive transactions, as well as more competitive pricing of hardware in the industry.

      Total cost of revenues decreased $2.5 million, or 6.9%, to $33.1 million, or 60.5% of total revenues, for the quarter ended March 31, 2001, from $35.6 million, or 55.0% of total revenues, for the same period in 2000. Cost of systems and services revenues decreased $1.5 million, or 4.5%, to $30.8 million, or 59.5% of systems and services revenues, for the quarter ended March 31, 2001 compared to $32.3 million, or 53.2% of systems and services revenues, for the first quarter of 2000. The decrease in cost of systems and services revenues was a result of the realization of integration synergies and restructuring, which resulted in lower salaries and payroll related expenses, including travel. These cost savings were partially offset by higher amortization of capitalized software development costs and acquired technology. Cost of hardware revenues decreased $1.0 million, or 30.3%, to $2.3 million, or 78.4% of hardware revenues, for the quarter ended March 31, 2001 compared to $3.3 million, or 80.9% of hardware revenues, for the first quarter of 2000. The decrease in cost of hardware revenues was directly attributable to lower hardware revenues.

      Sales and marketing expenses increased $1.4 million, or 14.7%, to $10.6 million, or 19.5% of total revenues, for the quarter ended March 31, 2001 compared to $9.3 million, or 14.3% of total revenues, for the first quarter in 2000. The increase was primarily due to an increase in commissions resulting from an increase in new contracted business as well as costs associated with newly implemented sales incentive programs.

      Total expenditures for research and development, including both capitalized and non-capitalized expenses decreased $0.5 million, or 4.4%, to $11.1 million, or 20.2% of total revenues, for the quarter ended March 31, 2001 compared to $11.6 million, or 17.9% of total revenues, for the first quarter of 2000. The decrease was due primarily to the realization of integration synergies and restructuring. Research and development expenses capitalized for the first quarter of 2001 decreased $0.1 million, to $1.7 million, compared to $1.8 million for the same period in 2000. The percentage of research and development expenditures capitalized of 15.4% for the quarter ended March 31, 2001 was relatively consistent with the 15.6% for the first quarter of 2000. Amortization of capitalized software development costs, which is included in cost of systems and services revenues, increased by $0.4 million to $1.1 million for the quarter ended March 31, 2001, compared to $0.7 million for the first quarter of 2000.

      General and administrative expenses were relatively unchanged at $2.3 million, or 4.3% of total revenues, for the quarter ended March 31, 2001 compared to $2.3 million, or 3.6% of total revenues, for the first quarter of 2000.

      Depreciation and amortization increased $0.1 million, or 4.1%, to $3.8 million, or 7.0% of total revenues, for the quarter ended March 31, 2001 compared to $3.7 million, or 5.6% of total revenues, for the same quarter in 2000. The increase was primarily the result of purchases of computer equipment.

      Transaction costs incurred during the quarter ended March 31, 2000 of $3.1 million were related to the costs associated with proposed mergers with Shared Medical Systems Corp. (SMS) and Neoforma.com, Inc. (Neoforma).

      Interest income increased $1.0 million to $1.4 million for the quarter ended March 31, 2001 compared to $0.4 million for the quarter ended March 31, 2000.

      Other income recorded during the first quarter of 2000 related to a gain on the Company’s investment in SMS. (See notes to the unaudited condensed consolidated financial statements.)

LIQUIDITY AND CAPITAL RESOURCES

      During the first quarter of 2001, the Company’s operations provided $5.1 million. Investing activities used $6.2 million for the purchase of fixed assets and the funding of development costs. Financing activities provided $125.7 million, from issuance of common stock in a public offering, exercise of stock options and the issuance of common stock under the employee stock purchase plan, offset by the repayment of all outstanding debt.

8

      As of March 31, 2001, the Company had $145.4 million in cash and cash equivalents.

      Management believes that its available cash and cash equivalents and anticipated cash generated from its future operations will be sufficient to meet the Company’s operating requirements for at least the next twelve months.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      We do not currently use derivative financial instruments. We generally buy investments with maturities of 90 days or less. Based upon the nature of our investments, we do not expect any material loss from our investments.

      Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if forced to sell securities that have seen a decline in market value due to changes in interest rates. A hypothetical 10% increase or decrease in interest rates, however, would not have a material adverse effect on our financial condition.

      The Company accounts for cash equivalents and marketable securities in accordance with Statement of Financial Accounting Standards (SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity Securities". Cash equivalents are short-term highly liquid investments with original maturity dates of three months or less. Cash equivalents are carried at cost, which approximates fair market value.

      We do not currently enter into foreign currency hedge transactions. Through March 31, 2001 foreign currency fluctutations have not had a material impact on our financial position or results of operations.

9

PART II.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits: See Index to exhibits.
(b)	Reports on Form 8-K:
	(1)         No reports on Form 8-K were filed with the Securities and Exchange Commission during the quarter ended March 31, 2001.

10

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ECLIPSYS CORPORATION
Date:	May 14, 2001	/s/ Gregory L.Wilson
		Gregory L. Wilson Senior Vice President, Chief Financial Officer and Treasurer

11

ECLIPSYS CORPORATION
EXHIBIT INDEX

EXHIBIT
NO.	DESCRIPTION
None

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