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

                                    FORM 10-Q


      [x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1998

                                       OR

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

                         Commission File Number: 0-18805


                          ELECTRONICS FOR IMAGING, INC.
             (Exact name of registrant as specified in its charter)


            Delaware                                              94-3086355
(State or other jurisdiction of                               (I.R.S.  Employer
 incorporation or organization)                              Identification No.)


                     2855 Campus Drive, San Mateo, CA 94403
          (Address of principal executive offices, including zip code)


                                 (415) 286-8600
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes [x]  No [ ]


The  number  of  shares of Common  Stock  outstanding  as of March 31,  1998 was
52,605,237.


An Exhibit Index can be found on Page 15.



<PAGE>


                          ELECTRONICS FOR IMAGING, INC.

                                      INDEX



                                                                        Page No.


PART I - Financial Information


Item 1.     Condensed Consolidated Financial Statements

                Condensed Consolidated Statements of Income
                     Three Months Ended March 31, 1998 and 1997
                     ..........................................................3
                Condensed Consolidated Balance Sheets
                     March 31, 1998 and December 31, 1997 .....................4

                Condensed Consolidated Statements of Cash Flows
                     Three Months Ended March 31, 1998 and 1997 ...............5

                Notes to Condensed Consolidated Financial Statements ..........6



Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations ...............................8



PART II - Other Information


Items 1-5.  Not Applicable ...................................................15


Item 6.     Exhibits and Reports on Form 8-K .................................16


Signatures ...................................................................17


                                       2



<PAGE>



PART I   FINANCIAL INFORMATION


     ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
                          ELECTRONICS FOR IMAGING, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                   (Unaudited)
<CAPTION>


                                                                             Three Months Ended
                                                                  ----------------------------------------
                                                                     March 31,                 March 31,
                                                                       1998                      1997
                                                                  --------------             -------------
<S>                                                               <C>                        <C>          
Revenue                                                           $       82,523             $      91,006
Cost of revenue                                                           45,356                    41,093
                                                                  --------------             -------------

                                                                          37,167                    49,913
                                                                  --------------             -------------

Operating expenses:
   Research, development and contract costs                               14,084                     8,126
   Sales and marketing                                                    15,322                     9,558
   General and administrative                                              3,461                     2,873
                                                                  --------------             -------------

                                                                          32,867                    20,557
                                                                  --------------             -------------

     Income from operations                                                4,300                    29,356

Other income, net                                                          2,221                     2,563
                                                                  --------------             -------------

     Income before income taxes                                            6,521                    31,919

Provision for income taxes                                                 2,348                    11,491
                                                                  --------------             -------------

     Net income                                                   $        4,173             $      20,428
                                                                  ==============             =============

Net income per basic common share                                 $         0.08             $        0.40
                                                                  ==============             =============

Shares used in per share calculation (basic)                              52,582                    51,640
                                                                  ==============             =============

Net income per diluted common share                               $         0.08             $        0.37
                                                                  ==============             =============

Shares used in per share calculation (diluted)                            54,891                    55,740
                                                                  ==============             =============



<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       3


<PAGE>


<TABLE>
                          ELECTRONICS FOR IMAGING, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share amounts)
                                   (Unaudited)
<CAPTION>

                                                                     March 31,               December 31,
                                                                       1998                      1997
                                                                  --------------             -------------
<S>                                                               <C>                        <C>
ASSETS

Current assets:
   Cash and cash equivalents                                      $       58,988             $      57,195
   Short-term investments                                                185,257                   185,536
   Accounts receivable, net                                               38,069                    30,930
   Inventories                                                            23,305                    23,790
   Other current assets                                                   37,963                    32,445
                                                                  --------------             -------------

     Total current assets                                                343,582                   329,896

Property and equipment, net                                               47,894                    46,502
Other assets                                                               9,243                     9,600
                                                                  --------------             -------------

     Total assets                                                 $      400,719             $     385,998
                                                                  ==============             =============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                               $       26,651             $      20,255
   Accrued and other liabilities                                          22,723                    19,891
   Income taxes payable                                                    3,953                     2,923
                                                                  --------------             -------------

     Total current liabilities                                            53,327                    43,069
                                                                  --------------             -------------

Long-term debt                                                             4,064                     4,064
                                                                  --------------             -------------

Stockholders' equity:
   Preferred Stock, $.01 par value, 5,000,000 shares
     authorized; none issued and outstanding                                  --                        --
   Common Stock, $.01 par value, 150,000,000 shares
      authorized; 52,605,237 and 52,558,383 shares issued and
      outstanding, respectively                                              526                       524
   Additional paid-in capital                                            137,552                   137,264
   Retained earnings                                                     205,250                   201,077
                                                                  --------------             -------------

     Total stockholders' equity                                          343,328                   338,865
                                                                  --------------             -------------

     Total liabilities and stockholders' equity                   $      400,719             $     385,998
                                                                  ==============             =============

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>


                                       4


<PAGE>


<TABLE>
                          ELECTRONICS FOR IMAGING, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<CAPTION>
                                                                        Three Months Ended March 31,
                                                                  ----------------------------------------
                                                                       1998                      1997
                                                                  --------------             -------------
<S>                                                               <C>                        <C>
Cash flows from operating activities:
   Net income                                                     $        4,173             $      20,428
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization                                       2,823                     1,441
       Changes in operating assets and liabilities:
         Accounts receivable                                              (7,139)                   (7,062)
         Inventories                                                         485                    (1,951)
         Receivable from subcontract manufacturers                        (4,749)                   (7,118)
         Other current assets                                               (769)                   (2,484)
         Accounts payable and accrued liabilities                          9,228                    11,364
         Income taxes payable                                              1,030                     9,034
                                                                  --------------             -------------

           Net cash provided by operating activities                       5,082                    23,652
                                                                  --------------             -------------

Cash flows from investing activities:
   Purchase of short-term investments                                    (28,653)                  (36,097)
   Sales and maturities of short-term investments                         28,932                    34,136
   Purchases of property and equipment, net                               (3,887)                   (1,544)
   Purchase of other assets                                                   29                         7
                                                                  --------------             -------------

           Net cash used for investing activities                         (3,579)                   (3,498)
                                                                  --------------             -------------

Cash flows from financing activities:
   Issuance of common stock related to stock plans                           290                     1,706
                                                                  --------------             -------------

           Net cash provided by financing activities                         290                     1,706
                                                                  --------------             -------------

Net change in cash and cash equivalents                                   (1,793)                   21,860

Cash and cash equivalents at beginning of period                          57,195                    71,946
                                                                  --------------             -------------

Cash and cash equivalents at end of period                         $      58,988             $      93,806
                                                                  ==============             =============

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                       5


<PAGE>


                          ELECTRONICS FOR IMAGING, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (In thousands)
                                   (Unaudited)



1.       Basis of Presentation

         The unaudited interim condensed  consolidated  financial  statements of
         Electronics  for Imaging,  Inc. (the Company) as of and for the interim
         period  ended March 31, 1998,  have been  prepared on the same basis as
         the audited  consolidated  financial  statements as of and for the year
         ended  December 31, 1997,  contained in the Company's  Annual Report to
         Stockholders,   and,  in  the  opinion  of   management,   include  all
         adjustments (consisting only of normal recurring adjustments) necessary
         to present fairly the financial position of the Company and the results
         of its operations and cash flows, in accordance with generally accepted
         accounting  principles.  The interim condensed  consolidated  financial
         statements should be read in conjunction with the audited  consolidated
         financial statements and notes thereto referred to above.

         The  preparation  of  the  interim  condensed   consolidated  financial
         statements in conformity with generally accepted accounting  principles
         for such financial statements requires management to make estimates and
         assumptions  that affect the reported amounts of assets and liabilities
         and disclosure of contingent  assets and  liabilities as of the date of
         the  interim  condensed   consolidated  financial  statements  and  the
         reported  amounts of revenue and expenses during the reporting  period.
         Actual results could differ from these estimates.

         The interim  results of the Company  are subject to  fluctuation.  As a
         result,  the Company believes the results of operations for the interim
         period  ended  March 31,  1998 are not  necessarily  indicative  of the
         results to be expected for any other interim period or the full year.



2.       Comprehensive Income

         Effective  January 1, 1998, the company adopted  Statement of Financial
         Accounting Standards No. 130, "Reporting  Comprehensive  Income".  This
         Statement requires that all items recognized under accounting standards
         as  components  of  comprehensive  earnings  be  reported  in an annual
         financial statement that is displayed with the same prominence as other
         annual  financial  statements.  This  Statement  also  requires that an
         entity classify items of other  comprehensive  earnings by their nature
         in an annual  financial  statement.  For the quarters  ending March 31,
         1998 and 1997,  the  differences  between the  Company's net income and
         comprehensive income were immaterial.


                                       6


<PAGE>


3.         Earnings Per Share

<TABLE>
                  In February 1997,  The Financial  Accounting  Standards  Board
         issued  SFAS No.  128,  Earnings  per Share.  The  Statement  redefines
         earnings   per  share  (EPS)  under   generally   accepted   accounting
         principles.  Under the new standard, primary (EPS) is replaced by basic
         EPS and fully  diluted EPS is replaced by diluted EPS. It also requires
         dual presentation of basic and diluted EPS on the face of the financial
         statements.  SFAS No. 128 was adopted in the fourth quarter of 1997 and
         the EPS for all periods  presented  have been  restated to conform with
         the  provisions  of  SFAS  No.  128.  The  following  table  represents
         unaudited  disclosures of basic and diluted EPS in accordance with SFAS
         No. 128 assuming the standard was applied during all periods  presented
         below:
<CAPTION>
                                                                     March 31,                March, 31,
                                                                       1998                      1997
                                                                     -----------             ----------
<S>      <C>                                                            <C>                  <C>
         (in thousands, except per share amounts)

         Net income available to common shareholders                    $  4,173             $   20,428

         Shares
              Basic shares                                                52,582                 51,640
              Effect of Dilutive Securities                                2,309                  4,100
                                                                     -----------             ----------
              Diluted shares                                              54,891                 55,740
                                                                     ===========             ==========

         Earnings per common share
              Basic EPS                                                 $   0.08             $     0.40
              Diluted EPS                                               $   0.08             $     0.37
</TABLE>


<TABLE>
         Antidilutive  Options.  Options to purchase 1,852,799 and 32,492 shares
         of  common   stock   outstanding   as  of  March  31,  1998  and  1997,
         respectively,  were not  included  in the  computations  of diluted EPS
         because the  options'  exercise  prices were  greater  than the average
         market price of the common shares for the quarters then ended.
<CAPTION>

4.       Balance Sheet Components (in thousands)
                                                                     March 31,               December 31,
                                                                       1998                      1997
                                                                     -----------             ----------
<S>      <C>                                                         <C>                     <C>
         Inventories:

         Raw materials                                               $    18,404             $   19,216
         Work-in-process                                                   4,283                  3,183
         Finished goods                                                      618                  1,391
                                                                     -----------             ----------

                                                                     $    23,305             $   23,790
                                                                     ===========             ==========


         Other Current Assets:

         Receivable from subcontract manufacturers                   $    22,391             $   17,642
         Other                                                            15,572                 14,803
                                                                     -----------             ----------

                                                                     $    37,963             $   32,445
                                                                     ===========             ==========
</TABLE>


                                       7


<PAGE>




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


The following  discussion and analysis  should be read in  conjunction  with the
Management's  Discussion  and  Analysis and the audited  consolidated  financial
statements  of  Electronics  for Imaging,  Inc.  (the Company) and related notes
thereto  contained in the Company's 1997 Annual Report to Stockholders.  Results
for the three months ended March 31, 1998 are not necessarily  indicative of the
results  expected  for the entire  fiscal  year ended  December  31,  1998.  All
assumptions,  anticipations,  expectations  and forecasts  contained  herein are
forward-looking  statements that involve risks and uncertainties.  The Company's
actual results could differ  materially  from those  discussed  here. For a more
complete discussion of factors which might impact the Company's results,  please
see the section entitled "Factors that Could Adversely Affect Performance" below
and in the  Company's  1997  Annual  Report  on Form  10-K,  as  filed  with the
Securities  and  Exchange  Commission.  The Company  periodically  reviews  such
factors to ensure their appropriateness.

Results of Operations

Revenue

Revenue  decreased  9.3% to $ 82.5  million  in the first  quarter  of 1998,  as
compared to $91.0 million in the first quarter of 1997.  The decrease in revenue
is primarily due to price  reductions on existing  product lines in anticipation
of new  product  introductions  as  well  as  continued  weak  sales  from  Asia
particularly  in Japan  due to the  ongoing  weakness  in those  economies.  The
Company's new generation Fiery ZX products,  new black and white products, and a
new line of embedded  printer products (under the name "Fiery Driven" for use in
desktop  color  printers)  began  shipping  in limited  volume  during the first
quarter of 1998. In  coordination  with the  introduction of these new products,
the Company  lowered prices on existing  product lines.  Although sales of these
new products are expected to increase,  they accounted for less than 8% of total
revenues in the first quarter of 1998.  The majority of revenues  continue to be
derived  from the  Company's  stand-alone  Fiery XJ and XJ+  color  servers  for
digital  color  copiers.  As  discussed  below,  the  decline in revenue is also
partially due to the continued weakness in Asian economies.

Comparing  international  revenue  in the  first  quarter  of 1998 to the  first
quarter of 1997,  these  sales  increased  from $43.7  million or 48.0% of total
revenues to $44.8 million or 54.3% of total revenues, respectively. However, the
Company believes the increase in international revenue is due to a change in the
way the Company ships  products to one of its major  customers.  Starting in the
second  quarter of 1997,  instead of receiving  product in the United States and
then shipping the product to its European facilities, one of the Company's major
customers  began having its product shipped  directly to Europe.  In conjunction
with this change,  sales  revenue that was formerly  being  recorded as domestic
sales began being recorded as European  sales.  During the first quarter of 1998
under the new more direct  distribution  model,  sales to Europe  totaled  $29.7
million or 35.9% of total  revenues  as  compared  to $22.5  million or 24.7% of
total revenues in the first quarter of 1997 under the old  distribution  model -
representing on its face a 32% increase. Reflecting historical shipment methods,
during the first quarter of 1998,  proforma  sales to Europe showed a 2% decline
from the  comparable  sales during the first quarter of 1997.  Sales to Japan in
the first quarter of 1998  decreased to $12.8 million or 15.5% of total revenues
as compared to $18.5 million or 20.4% of total  revenues in the first quarter of
1997. The decline in sales to Japan is primarily due to a continued  weakness in
the Japanese and other Asian economies. Foreign sales to areas other than Europe
and Japan for the first quarter of 1998 totaled $2.3 million and comprised  2.8%
of total  revenues as compared to $2.6 million and 2.8% of total revenues in the
first quarter of 1997.

                                       8


<PAGE>

Substantially all of the revenue of both periods was attributable to the sale of
Fiery  products  through the Company's OEM channels with such partners as Canon,
Xerox,  Ricoh,  Minolta,  Fuji Xerox,  Epson,  Sharp and  others.  For the first
quarter of 1998 the company  continued  to rely on three OEM  customers,  Canon,
Xerox  and  Ricoh for 77% of it's  first  quarter  revenue  as  compared  to 85%
reported for all of 1997. In the event that any of such relationships are scaled
back or discontinued,  the Company may experience a significant  negative impact
on its consolidated  financial position and results of operations.  In addition,
no  assurance  can be given  that the  Company's  relationships  with  these OEM
partners will continue.

As discussed above,  shipments to some of the Company's OEM partners are made to
centralized purchasing and manufacturing locations which in turn sell through to
foreign locations. As a result of these factors, the Company believes that sales
of its products  into Europe and Japan may actually be higher,  though  accurate
data is difficult to obtain. The Company expects that international revenue will
continue to represent a significant portion of its total revenue.

The Company continues to work on the development of products utilizing the Fiery
architecture  and other  products  and  intends to  continue  to  introduce  new
generations  of Fiery  products and other new product  lines in the remainder of
1998 and  beyond.  No  assurance  can be given that the  introduction  or market
acceptance of new, current or future products will be successful.

Cost of Revenue

A  substantial  majority  of the  Company's  cost of  revenue  to date  has been
attributable  to the  sale of Fiery  Color  Servers.  Fiery  Color  Servers  are
manufactured  by  third-party  manufacturers  who purchase most of the necessary
components.  The Company sources directly  proprietary memory and certain ASICs,
and software  licensed from various sources,  including  PostScript  interpreter
software,  which the Company  licenses  from Adobe  Systems,  Inc. The Company's
gross  margin  was 45.0% in the first  quarter  of 1998,  down from 54.8% in the
corresponding  quarter  of  1997.  This  was  due to a  combination  of  factors
including  a  higher  mix of low end  products  with  relatively  lower  margins
including  new embedded  products and black and white  products that the Company
introduced  in the first  quarter of 1998.  The  company  also  initiated  price
reductions  on older  products as an  inducement  for  continued  older  product
purchases in light of pending transitions to newer products. The Company expects
that sales of products with relatively  lower margins may further  increase as a
percentage of revenue. Such products include older products for which prices are
reduced during product transitions,  embedded products for both desktop printers
and copiers,  and  stand-alone  and embedded  controllers  for black-and  -white
copiers. If such sales increase as a percentage of the Company's revenue,  gross
margins may further decline.

In general,  the Company believes that gross margin will continue to be impacted
by a variety of factors.  These factors include the  availability and pricing of
key components (including DRAM and Postscript interpreter software), third party
manufacturing  costs,  product,  channel and geographic  mix, the success of the
Company's  product  transitions  and  new  products,  competition,  and  general
economic conditions in the United States and abroad.

                                        9


<PAGE>

Operating Expenses

Operating  expenses for the quarter ended March 31, 1998 increased $12.3 million
or 59.9% from the same period in 1997.  Operating  expenses in the first quarter
of 1998 also  constituted  a higher  percentage  of  revenues  than in the first
quarter of 1997,  39.8%  versus  22.6%,  respectively.  Increases  in  operating
expenses were primarily caused by the hiring of additional full time employees -
a net increase of 183 people or 49% from March 31, 1997 to March 31,  1998.  The
Company has hired additional employees to support product development as well as
to support expanded operations.  The company anticipates that operating expenses
will  continue  to grow  and may  increase  both in  absolute  dollars  and as a
percentage of revenue. The components of operating expenses are detailed below.

Research  and  Development.   Expenses  for  research  and  development  consist
primarily  of  personnel  expenses  and,  to a  lesser  extent,  consulting  and
nonrecurring  engineering  expenses,   depreciation,   and  costs  of  prototype
materials.  Research and  development  expenses  were $14.1  million or 17.1% of
revenue  in the first  quarter  of 1998,  compared  to $8.1  million  or 8.9% of
revenue in the corresponding  quarter of 1997. Research and development expenses
have  increased  primarily  due  to an  increase  in  research  and  development
projects,  which has resulted in an engineering headcount increase of 62.1% from
March 31, 1997 to March 31, 1998. The Company  believes that the  development of
new products and enhancement of existing  products is essential to its continued
success,  and management intends to continue to devote substantial  resources to
research and new product development.  Accordingly, the Company expects that its
research and development  expenses may increase in absolute dollars and possibly
also as a percentage of revenue.

Sales  and  Marketing.  Such  expenses  include  personnel  expenses,  costs for
tradeshows,   marketing   programs  and  other   promotional   material,   sales
commissions,   travel  and  entertainment  expense,   depreciation,   and  costs
associated  with sales offices in the United States,  Europe and Japan and other
locations around the world.  Sales and marketing  expenses were $15.3 million or
18.6% of revenue in the first quarter of 1998, compared to $9.6 million or 10.5%
of revenue in the  corresponding  quarter of 1997. Sales and marketing  expenses
increased as a percentage of total revenue due primarily to a 30.5 % increase in
employee  headcount  from March 31, 1997 to March 31, 1998.  In  addition,  cost
required  for the  introduction,  promotion  and  support of a broader  range of
current  products  with  both  existing  and  new OEM  relationships  as well as
technology  alliance partners has increased.  Also, in coordination with its new
product  releases,  the Company has increased its  participation  in trade shows
during  the  first  quarter  of 1998.  The  Company  expects  that its sales and
marketing  expenses  may  increase in absolute  dollars and  possibly  also as a
percentage of revenue as it continues to actively  promote its products,  launch
new Fiery models and other  products,  and continue to build its worldwide sales
and marketing organization.

General  and  Administrative.  Such  expenses  consist  primarily  of  personnel
expenses and, to a lesser  extent,  professional  fees,  expenses  required of a
public company,  and depreciation and facility costs. General and administrative
expenses  were $3.5  million or 4.2% of  revenue  in the first  quarter of 1998,
compared  to $2.9  million or 3.2% of revenue  in the  corresponding  quarter of
1997.  The increases  were primarily due to the addition of personnel to support
the   Company's   operations.   The  Company   expects   that  its  general  and
administrative  expenses may increase in absolute dollars and possibly also as a
percentage of revenue in order to support any growth in operations.

                                       10


<PAGE>

Income Taxes

The  Company's  effective  tax rate was 36.0% for the first  quarter of 1998 and
1997. In each period the Company  benefited from increased  tax-exempt  interest
income,  increases in foreign  sales and to a lesser extent the  utilization  of
research and development credits in achieving a consolidated  effective tax rate
lower than the  consolidated  federal and state  statutory  income tax rate. The
Company anticipates that these benefits will continue to have a favorable impact
on the Company's consolidated effective tax rate.

Liquidity and Capital Resources

Cash, cash equivalents and short-term investments increased to $244.2 million as
of March 31, 1998, up from $235.9  million as of March 31, 1997. The company has
an  investment  portfolio of  short-term  investments  comprised of fixed income
securities  that  are  classified  as  "held  to  maturity  securities".   These
securities, like all fixed income instruments, are subject to interest rate risk
and will fall in value if market interest rates increase.  The Company  attempts
to limit this exposure by investing primarily in short-term securities.

Working capital increased to $290.3 million as of March 31, 1998, up from $259.4
million as of March 31, 1997. Net cash provided by operating activities was $5.1
million and $23.7 million for the  three-month  periods ended March 31, 1998 and
1997,  respectively,  primarily  as a result of  profitable  operations  in both
periods.  The Company purchased  approximately $3.9 million of capital equipment
and furniture  during the three-month  period ended March 31, 1998,  compared to
purchases of $1.5 million in the corresponding period of 1997.

The Company does not have a  comprehensive  and formal Year 2000 plan for all of
its operations. The Company has informally reviewed its internal MIS systems and
believes  that Year 2000  issues will not  materially  affect its  internal  MIS
systems.  Also, the Company has tested its products to determine if the products
will successfully  rollover from the years 1999 to 2000 and 2000 to 2001, and if
the products will correctly recognize the date February 29, 2000. Products first
released after November 1, 1997 have passed  internal tests for these  criteria,
and future  products  will be required to pass the same  internal  tests  before
shipping.  Because the Company cannot control other companies'  products used in
conjunction with the Company's products (such as other companies' software), the
Company does not intend to assure its customers  that its products will meet the
above-referenced  criteria when used in  conjunction  with any other software or
hardware not manufactured by the Company. The Company has not reviewed Year 2000
plans and preparations of its  manufacturers,  suppliers,  customers,  and other
third parties with whom it does business.  The effects and costs associated with
possible Year 2000 issues are unknown to the Company at this time, and there can
be no  assurance  that such  effects and costs will not have a material  adverse
effect on the Company, its financial condition, results of operations.

The Company  believes  that its existing  capital  resources  together with cash
generated from  continuing  operations will be sufficient to fund its operations
and meet capital requirements through at least 1999.

Factors That Could Adversely Affect Performance

The following factors may adversely impact the Company's future  performance and
financial results:

Reliance  on  OEM  Resellers;   Risks  Associated  with  Significant  OEM  Group
Concentration

The  Company's  strategy of selling  principally  to OEMs  anticipates  that the
Company will be relying on high sales  volumes to a  relatively  small number of
customers. Although there can be no assurance that the Company's major customers
will continue to utilize the Company's  products at current  levels,  if at all,
the Company  expects to continue to depend upon such customers for a significant
percentage of its revenues.

                                       11


<PAGE>

A decline in demand for color copiers or color laser printers,  or other factors
affecting the computer  industry in general,  or major  customers in particular,
may adversely affect the Company's results of operations.

The  Company  relies  upon the  ability  of its OEMs to  develop  new  products,
applications and product enhancements on a timely and cost-effective  basis. The
ability of these OEMs to meet  changing  customer  needs and respond to emerging
industry standards and other technological changes is essential to the Company's
continued  success.   There  is  no  assurance  that  the  Company's  OEMs  will
effectively meet these technological challenges.  These OEMs, who are not within
the control of the Company, may incorporate into their products the technologies
of other companies in addition to or instead of the Company's products, and with
the  exception of certain  minimum  purchase  obligations,  are not obligated to
purchase products from the Company.  There can be no assurance that any OEM will
continue to carry the Company's products,  and the loss of important OEMs, or an
inability to recruit  additional OEMs, may have a material adverse effect on the
Company's business, operating results, and financial condition.


The  Company's  sales have been and will  continue to be heavily  influenced  by
order  quantities  and timing of delivery to its OEMs. No assurance can be given
that the Company will be able to successfully  maintain sales of its products in
any OEM  channel.  The  Company's  sales  may be  adversely  affected  if an OEM
introduces  or supports  additional  products  that compete  with the  Company's
products, fails to effectively market the Company's products, modifies its color
copiers or printers such that the Company's  products are no longer  compatible,
introduces  new  color  copiers  or  printers  that  are  incompatible  with the
Company's  products,  or does not allow the Company's products to support all of
the features available on its new copiers or printers.


Although the Company is pursuing,  and will continue to pursue,  the business of
additional copier and printer OEMs, customer concentration will continue to be a
risk due to the  limited  number  of OEMs  producing  copiers  and  printers  in
sufficient volume to be attractive to the Company.


Product Transitions

Although the Company plans to introduce  new  products,  delays in the launch or
availability  of these  products  could have an adverse  effect on the Company's
financial results.  Product  transitions also carry the risk that customers will
delay or cancel  orders for  existing  products.  If the  Company is not able to
successfully  manage product transitions or cannot guarantee the availability of
products  once they have been  introduced,  its  results  of  operations  may be
adversely affected.

Product Diversification and Coordination of Development with Customers

The  Company's  customers  have  requested  a  broader  range of  products  with
different  and unique  features,  and the Company  believes  that this trend may
continue.  If the  Company  cannot  successfully  manage  the  effort  and risks
associated  with a broader range of products,  its results of operations  may be
adversely affected.

The Company's  customers work closely with the Company to develop  products that
are specific to each  customer.  Many of the products the Company is  developing
require  the  Company  and its  customers  to  coordinate  development,  quality
testing,  marketing and other tasks. The Company cannot control other companies'
efforts,  and such  coordination  may result in delays that the  Company  cannot
manage by itself. If the Company cannot successfully manage the effort and risks
associated  with  coordination,  its  results  of  operations  may be  adversely
affected.

Reliance on Products That Enable Color  Printing of Digital Data and Decrease in
Demand for the Company's Products

                                       12


<PAGE>

Although  the  Company  has  expanded  its  product  line in recent  years,  and
continues  to explore  opportunities  to further  diversify  its  business,  the
Company's business has been focused heavily on sales of products that enable the
color printing of digital data.  Should  conditions arise that reduce the demand
for this service, the Company's results of operations may be adversely affected.
The Company believes that purchases of the Company's products may be affected by
a  variety  of  economic  conditions  and  considerations,  and  there can be no
assurance  that  demand for the  Company's  products  will  continue  at current
levels.  For example,  although such  conditions  are difficult to predict,  the
Company is not assuming that there will be  significant  improvement in economic
conditions  in Japan in 1998.  The  Company  believes  that  continued  economic
distress in Japan and  elsewhere in Asia may limit  demand in these  regions for
the  Company's  products.  In addition,  it is possible  that  individuals  with
responsibility  for  purchasing  the  Company's  products,  such as  information
technology professionals, may choose to devote available discretionary resources
to other perceived needs, such as technology  expenses associated with Year 2000
preparation.

New Product Introductions

 The  Company  continues  to  explore  opportunities  to develop  product  lines
distinct  from its Fiery  Color  Servers.  Such new  products  may  require  the
investment  of capital for the  development  of new  distribution  and marketing
channels at an unknown cost to the Company.  There can be no guarantee  that the
Company would be successful in the  development of such channels or that any new
products  would  gain  market  acceptance.   If  the  Company  is  not  able  to
successfully manage the introduction of new products,  its results of operations
may be  adversely  affected.  In  addition  to these  risks,  if the  Company is
successful  in  introducing  new products,  there can be no assurance  that such
product  introductions  (including more powerful products sold at a lower price)
will not adversely impact gross margins or sales of existing products.


Competition

The Company has seen  competition in the market from companies and products that
provide similar  functionality to the Company's  products and believes that such
competition  will  continue  and may  intensify.  It is also  possible  that the
Company's  customers  may  themselves  internally  develop  and supply  products
presently  sold by the Company.  There can be no assurance that the Company will
be able to continue to  successfully  compete against other  companies'  product
offerings or their  financial and other  resources.  In addition to  competition
among suppliers of the Company's products, the Company believes that competition
among the Company's  customers and potential  customers,  including  competition
over price,  may increase.  Such  competition  may have an adverse impact on the
Company's results of operations.

Managing Growth

The  Company  continues  to  increase  its  headcount,  and is  working to build
relationships  with  OEMs and  other  customers.  As a result,  the  number  and
complexity of  relationships  the Company must manage,  including  relationships
with  customers,  manufacturers,  and suppliers,  has increased and may increase
further.  If the  Company  cannot  successfully  manage  growth,  its results of
operations may be adversely affected.

Hiring and Retention of Employees

                                       13


<PAGE>

The Company  depends  upon  skilled  employees,  such as software  and  hardware
engineers, quality assurance engineers,  marketing and sales professionals,  and
persons in administrative and managerial positions. Demand for such employees in
Northern  California,  where the Company's main offices are located, is high. To
assure  that the  Company  can  adequately  support  its  business,  the Company
undertakes a number of efforts to hire and retain  qualified  employees.  If the
Company cannot successfully hire and retain employees, its results of operations
could be adversely affected.

Fluctuations in Operating Results

 Operating results may fluctuate due to factors such as demand for the Company's
products, success and timing of the new product introductions,  price reductions
by the Company and its  competitors,  delay,  cancellation  or  rescheduling  of
orders,  product  performance,  or  availability  of key  components.  Operating
results  may also  fluctuate  due to  seasonal  purchasing  patterns  of its OEM
partners or the status of the Company's  relationships  with its OEM partners as
well  as to  performance  of  third-party  manufacturers  or the  status  of the
Company's relationships with its key suppliers.  Moreover, the Company's ability
to develop and market new products, the timing and amount of sales and marketing
expenditures,  and the general demand for color copiers, digital black-and-white
copiers, and color laser printers will also effect operating results.

Limited Backlog

The Company  typically does not obtain long-term volume purchase  contracts from
its customers,  and a substantial  portion of the Company's backlog is scheduled
for  delivery  within 90 days or less.  Customers  may cancel  orders and change
volume levels or delivery  times without  penalty.  Sales and operating  results
therefore  depend on the volume and  timing of the  backlog as well as  bookings
received.  Significant  portions of the Company's  operating expenses are fixed,
and planned  expenditures  are based  primarily on sales  forecasts  and product
development  programs.  If sales do not meet the Company's  expectations  in any
given period,  the adverse  impact on operating  results may be magnified by the
Company's inability to adjust operating expenses  sufficiently or quickly enough
to compensate for such a shortfall.

Volatility of Stock Price

Due to various  factors,  including  those noted  above,  the  Company's  future
earnings and stock price may be subject to significant volatility. Any shortfall
in revenue or earnings from levels expected by securities analysts could have an
immediate and  significant  adverse effect on the trading price of the Company's
common stock in any given period.  The Company  participates in a highly dynamic
industry, which often results in significant volatility for the Company's common
stock price.

Risks Associated With The Company's Ownership of Real Property And Transition To
New Facilities

In late 1998 or early 1999, the Company anticipates moving into new headquarters
on land in Foster City,  California that the Company owns. If the Company cannot
successfully  manage the  transition,  disruption to the Company's  business and
delays  in sales  could  arise,  and  results  of  operations  may be  adversely
affected.

International Operations and Currency Fluctuations

Approximately  54.2% of the Company's  product  revenue for the first quarter of
1998 was attributable to international sales, primarily in Europe and Japan. The
Company  expects  that   international   sales  will  continue  to  represent  a
significant  portion  of its total  revenue.  The  Company is subject to certain
risks associated with international operations, including tariff regulations and
requirements  for export  licenses,  particularly  with respect to the export of
certain technologies, which may on occasion be delayed or difficult to obtain.

Given the significance of international sales to the Company,  the Company faces
a  continuing  risk in that the  strengthening  of the U.S.  dollar  versus  the
Japanese yen and major European  currencies could adversely impact the Company's
revenues  and gross  margin.  Although  the Company  typically  invoices in U.S.

                                       14


<PAGE>

dollars,  these  adverse  impacts  could occur through lower unit demand and the
necessity to lower average selling prices to compensate for the reduced strength
of local currencies

Proprietary Information

The  Company  relies on a  combination  of  copyright,  patent and trade  secret
protection,   nondisclosure   agreements,   and  licensing  and  cross-licensing
arrangements  to establish and protect its proprietary  rights.  There can be no
assurance  that any  patents  that may be  issued to the  Company,  or which the
Company may license from third parties,  or that any other proprietary rights of
the Company will not be  challenged,  invalidated or  circumvented,  or that any
rights granted thereunder would provide proprietary protection to the Company.

Infringement and Potential Litigation

The  Company  may  receive  in the  future  communications  from  third  parties
asserting that the Company's products infringe, or may infringe, the proprietary
rights of third parties. There can be no assurance that any of these claims will
not result in  protracted  and costly  litigation.  While it may be necessary or
desirable  in the  future  to  obtain  licenses  relating  to one or more of its
products  or  relating  to  current  or  future  technologies,  there  can be no
assurance  that the  Company  will be able to do so on  commercially  reasonable
terms, or at all.

Reliance on Adobe Systems, Incorporated

Under the Company's  license  agreements with Adobe, a separate  license must be
granted from Adobe to the Company for each type of copier or printer used with a
Fiery  Server or  Controller.  To date,  the Company has  successfully  obtained
licenses to use Adobe's  PostScript(TM)  software for  products  that it offers.
However,  there can be no  assurance  that Adobe will  continue to grant  future
licenses to Adobe  PostScript(TM)  software  on  reasonable  terms,  in a timely
manner,  or at all,  or that  Adobe  will  continue  to give  quality  assurance
approvals.  Such actions by Adobe may adversely affect the Company's  results of
operations.  If Adobe does not grant the Company such licenses or approvals,  if
the Adobe license  agreements are terminated,  or if the Company's  relationship
with Adobe is otherwise  impaired,  the  Company's  operations  may be adversely
affected.

                                       15


<PAGE>



P
ART II           OTHER INFORMATION



     ITEMS 1 - 5.

There is no applicable  information  to report under Part II, Items 1 - 5 during
the period covered by this report.


     ITEM 6.      Exhibits and Reports on Form 8-K

         (a)          Exhibits
                      Exhibit 27.1 Financial Data Schedule...............Page 18

         (b)          Reports on Form 8-K
                      No reports on Form 8-K were  filed by the  Company  during
                      the three-month period ended March 31, 1998.


                                       16


<PAGE>


                                   SIGNATURES

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



                                          ELECTRONICS FOR IMAGING, INC.

Date:  May 14, 1998


                                          By /s/  Dan Avida
                                          Dan Avida
                                          President and Chief Executive Officer
                                          and Acting Principal Financial Officer




                                          By /s/  Eric Saltzman
                                          Eric Saltzman
                                          Vice President, Strategic Relations
                                          and Duly Authorized Officer

                                       17






<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
This  schedule  contains  summary  financial   information  extracted  from  the
condensed  balance  sheet,  condensed  statement  of  operations  and  condensed
statement of cash flows  included in the Company's form 10-Q for the three month
period  ended march 31, 1998 and is  qualified  in its  entirety by reference to
such financial statements and notes thereto.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>               DEC-31-1998
<PERIOD-START>                  JAN-01-1998
<PERIOD-END>                    MAR-31-1998
<CASH>                                         58,988
<SECURITIES>                                  185,257
<RECEIVABLES>                                  38,657
<ALLOWANCES>                                      588
<INVENTORY>                                    23,305
<CURRENT-ASSETS>                              343,582
<PP&E>                                         72,932
<DEPRECIATION>                                 25,038
<TOTAL-ASSETS>                                400,719 
<CURRENT-LIABILITIES>                          53,327
<BONDS>                                         4,064
<PREFERRED-MANDATORY>                               0
<PREFERRED>                                         0
<COMMON>                                          526
<OTHER-SE>                                    342,802
<TOTAL-LIABILITY-AND-EQUITY>                  400,719
<SALES>                                        82,523
<TOTAL-REVENUES>                               82,523
<CGS>                                          45,356
<TOTAL-COSTS>                                  45,356
<OTHER-EXPENSES>                               32,867
<LOSS-PROVISION>                                   44
<INTEREST-EXPENSE>                              2,461
<INCOME-PRETAX>                                 6,521
<INCOME-TAX>                                    2,348
<INCOME-CONTINUING>                             4,173
<DISCONTINUED>                                      0
<EXTRAORDINARY>                                     0
<CHANGES>                                           0
<NET-INCOME>                                    4,173
<EPS-PRIMARY>                                     .08
<EPS-DILUTED>                                     .08
        


</TABLE>