<PAGE>

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

                               ----------------

                                   FORM 10-Q

                               ----------------

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

                 For the quarterly period ended March 31, 2000

                                      OR

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

    For the transition period from                    to

                        Commission file number 0-27459

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

<TABLE>
<S>                                            <C>
                  Delaware                                       77-0493142
       (State or other jurisdiction of                        (I.R.S. Employer
       incorporation or organization)                       Identification No.)
</TABLE>

                26025 Mureau Road, Calabasas, California 91302
         (Address of principal executive offices, including zip code)

                                (818) 871-0000
             (Registrant's telephone number, including area code)

                               ----------------

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

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

                        Common Stock, $0.001 par value
                23,256,250 shares outstanding as of May 1, 2000

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<PAGE>

                          DIGITAL INSIGHT CORPORATION
                                   FORM 10-Q

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
 <C>    <S>                                                                <C>
                          PART I--FINANCIAL INFORMATION

 ITEM 1 Consolidated Financial Statements...............................     2
        .  Consolidated balance sheets as of March 31, 2000 and December
           31, 1999.....................................................     2
        .  Consolidated statements of operations for the three months
           ended March 31, 2000 and 1999................................     3
        .  Consolidated statements of cash flows for the three months
           ended March 31, 2000 and 1999................................     4
        .  Notes to consolidated financial statements...................     5

 ITEM 2 .  Management's Discussion and Analysis of Financial Condition
           and Results of Operations....................................     9
        .  Risk Factors that May Affect our Financial Condition and
           Results of Operations........................................    12

 ITEM 3 Quantitative and Qualitative Disclosures about Market Risk......    21

                           PART II--OTHER INFORMATION

 ITEM 2 Changes in Securities and Use of Proceeds.......................    22

 ITEM 4 Submission of Matters to a Vote of Security Holders.............    22

 ITEM 6 Exhibits and Reports on Form 8-K................................    23

 SIGNATURES.............................................................    24
</TABLE>
<PAGE>

                        PART I -- FINANCIAL INFORMATION

ITEM 1. Financial Statements

                          DIGITAL INSIGHT CORPORATION

                          CONSOLIDATED BALANCE SHEETS
                                  (unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                         March 31,  December 31,
                                                           2000         1999
                                                         ---------  ------------
<S>                                                      <C>        <C>
Assets
------
Current assets:
  Cash and cash equivalents............................. $ 57,467     $ 79,031
  Accounts receivable, net..............................    8,975        7,741
  Accumulated implementation costs......................       33          279
  Other current assets..................................    2,355        3,781
                                                         --------     --------
    Total current assets................................   68,830       90,832
  Property and equipment, net...........................   15,400       12,363
  Deposits..............................................      307          231
  Other assets..........................................      214           62
                                                         --------     --------
    TOTAL ASSETS........................................ $ 84,751     $103,488
                                                         ========     ========
Liabilities and Stockholders' Equity (Deficit)
----------------------------------------------
Current liabilities:
  Accounts payable...................................... $  3,931     $  4,060
  Accrued compensation and related benefits.............    2,057        3,675
  Current portion of lease obligation...................      355          360
  Deferred revenue......................................    7,316        5,937
  Other accruals........................................    3,739        2,879
                                                         --------     --------
    Total current liabilities........................... $ 17,398     $ 16,911
Long-term portion of lease obligation...................      998          393
                                                         --------     --------
                                                         $ 18,396     $ 17,304
Stockholders' equity (deficit):
  Common stock.......................................... $  3,347     $     15
  Additional paid-in capital............................  113,484      116,779
  Notes receivable from stockholders....................     (219)        (216)
  Deferred stock-based compensation.....................   (2,950)      (3,279)
  Accumulated deficit...................................  (47,307)     (27,115)
                                                         --------     --------
    Total stockholders' equity (deficit)................   66,355       86,184
                                                         --------     --------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......... $ 84,751     $103,488
                                                         ========     ========
</TABLE>

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

                                       2
<PAGE>

                          DIGITAL INSIGHT CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                               Year-to-date
                                        Three months ended       through
                                            March 31,           March 31,
                                        -------------------- -----------------
                                          2000       1999      2000     1999
                                        ---------  --------- --------  -------
<S>                                     <C>        <C>       <C>       <C>
Revenues:
  Implementation fees.................  $   3,078  $  1,196  $  3,078  $ 1,196
  Service fees........................      7,341     2,979     7,341    2,979
                                        ---------  --------  --------  -------
Total revenues........................     10,419     4,175    10,419    4,175
                                        ---------  --------  --------  -------
Cost of revenues:
  Implementation......................      2,380       892     2,380      892
  Service.............................      3,709     1,812     3,709    1,812
                                        ---------  --------  --------  -------
  Total cost of revenues..............      6,089     2,704     6,089    2,704

Gross profit..........................      4,330     1,471     4,330    1,471

Operating expenses:
  Sales, general and administrative...      9,016     2,574     9,016    2,574
  Research and development............      3,718     1,362     3,718    1,362
  Amortization of stock-based
   compensation.......................        329       234       329      234
  Merger-related expenses.............     12,658       --     12,658      --
                                        ---------  --------  --------  -------
  Total operating expenses............     25,721     4,170    25,721    4,170
                                        ---------  --------  --------  -------
Loss from operations..................    (21,391)   (2,699)  (21,391)  (2,699)
                                        ---------  --------  --------  -------
Interest and other income (expense),
 net..................................        995        44       995       44
                                        ---------  --------  --------  -------
Net loss..............................  $ (20,396) $ (2,655) $(20,396) $(2,655)
                                        =========  ========  ========  =======
Taxes.................................        --        --        --       --

Net loss after taxes..................  $ (20,396) $ (2,655) $(20,396) $(2,655)
                                        =========  ========  ========  =======

Basic and diluted net loss per share..      (0.89)    (0.26)    (0.89)   (0.26)
Shares used in computing basic and
 diluted net loss per share...........     22,803    10,347    22,803   10,347

Excluding stock-based compensation:
-----------------------------------
Net loss..............................  $ (20,067) $ (2,421) $(20,067) $(2,421)
Basic and diluted net loss per share..  $   (0.88) $  (0.16) $  (0.88) $ (0.16)
Pro forma loss per share..............  $   (0.88) $  (0.16) $  (0.88) $ (0.16)
Shares used in computing weighted
 average net loss per share...........     22,803    15,457    22,803   15,457
</TABLE>

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

                                       3
<PAGE>

                          DIGITAL INSIGHT CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                           Three months ended
                                                               March 31,
                                                           --------------------
                                                             2000       1999
                                                           ---------  ---------
<S>                                                        <C>        <C>
Cash flows from operating activities:
 Net loss................................................. $( 20,396) $( 1,839)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation and amortization...........................       927       239
  Amortization of debt issuance cost......................       --          9
  Amortization of deferred stock-based compensation.......       329       234
  Interest income on stockholder notes....................        (3)       (3)
  Changes in operating assets and liabilities:
   Accounts receivable....................................    (1,234)     (519)
   Tax refund receivable..................................      (664)      --
   Unbilled receivables...................................       --       (288)
   Accumulated implementation cost........................        21        28
   Inventory..............................................        11       --
   Other assets...........................................     2,194      (179)
   Deposits...............................................       (76)       (9)
   Accounts payable.......................................      (603)      205
   Accrued compensation and related benefits..............    (1,111)       50
   Deferred revenue.......................................     1,379       663
   Other accruals.........................................       515       477
                                                           ---------  --------
    Net cash used in operating activities.................   (18,711)     (932)
                                                           ---------  --------
Cash flows from investing activities:
 Acquisition of property and equipment....................    (3,274)     (528)
                                                           ---------  --------
    Net cash used in investing activities.................    (3,274)     (528)
                                                           ---------  --------
Cash flows from financing activities:
 Proceeds from note payable...............................       474       109
 Principal payments of lease obligations..................       (90)      (49)
 Issuance of common stock.................................        15        50
 Proceeds from exercise of stock options..................        22       124
                                                           ---------  --------
    Net cash provided by financing activities.............       421       234
                                                           ---------  --------

Net increase (decrease) in cash...........................   (21,564)   (1,226)
                                                           ---------  --------
Cash and cash equivalents, beginning of period............    79,031     6,679
                                                           ---------  --------
Cash and cash equivalents, end of period.................. $  57,467  $  5,453
                                                           =========  ========
Supplementary disclosures of cash flow information:
 Cash paid during the year for interest................... $      13  $      9
 Non-cash financing activities:
  Capital lease obligation incurred.......................       682       493
  Series B warrants issued in conjunction with capital
   lease..................................................       --        147
</TABLE>

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

                                       4
<PAGE>

                          DIGITAL INSIGHT CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company and Summary of its Significant Accounting Policies

The Company

  Digital Insight Corporation (the "Company"), incorporated in March 1997,
provides Internet banking services to credit unions, small to mid-sized banks
and savings and loans. Its Internet banking services include home banking for
individual customers, business banking for commercial customers, a target
marketing program to increase financial services to end users, and customized
web site design and implementation services. Substantially all of the
Company's revenues are derived from these services.

  The Company originally operated as Digital Insight LLC, a Minnesota limited
liability company, which was formed in July 1995. On March 18, 1997, all
members of Digital Insight LLC converted their capital balances to shares of
Series A mandatorily redeemable convertible preferred and common stock of
Digital Insight Corporation, a Delaware corporation, in accordance with a
Member Control Agreement.

Revenue recognition

  Recurring fees are recognized as services are provided, and relate to the
number of end users or end user transactions and for hosting and maintaining
web sites. One-time implementation fees consist of salaries for implementation
personnel and fees for third parties, including bill payment and data
processing vendors. These fees are recognized upon completion of
implementation and customer approval. Implementation generally occurs over a
two- to four-month period. Costs and related revenues are deferred on the
balance sheet until that time. Accumulated implementation costs consist
primarily of salaries for implementation personnel in advance of related
billings. Losses on implementation, if any, are recognized in the period when
such losses are identified.

Net loss per share

  The Company computes net loss per share in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share," and
Securities and Exchange Commission ("SEC") Staff Accounting Bulletin No. 98
("SAB 98"). Under the provisions of SFAS No. 128 and SAB 98, basic and diluted
net loss per share is computed by dividing the net loss available to common
stockholders for the period by the weighted average number of shares of common
stock outstanding during the period. Shares of common stock issued in
connection with the conversion of members' capital pursuant to the Member
Control Agreement have been considered outstanding for all periods presented.
The calculation of diluted net loss per share excludes potential common shares
if the effect is antidilutive. Potential common shares are composed of common
stock subject to repurchase rights and incremental shares of common stock
issuable upon the exercise of stock options and warrants and upon conversion
of Series A, Series B, and Series C mandatorily redeemable convertible
preferred stock.

  Pursuant to SAB 98, common shares issued in each of the periods presented
for nominal consideration, if any, would be included in the per share
calculations as if they were outstanding for all periods presented. No such
shares have been issued.

Pro forma net loss per share

  Pro forma net loss per share for the three months ended March 31, 2000 and
March 31, 1999 is computed using the weighted average number of common shares
outstanding, including the pro forma effects of the automatic conversion of
the Company's mandatorily redeemable convertible Series A, Series B, and
Series C preferred stock into shares of the Company's common stock effective
upon the closing of the Company's initial public offering as if such
conversion occurred on January 1, 1999, or at date of original issuance if
later. The resulting pro forma adjustment includes an increase in the weighted
average shares used to compute basic net loss per share of $0.89 and $0.26 for
the three months ended March 31, 2000 and the three months ended

                                       5
<PAGE>

                          DIGITAL INSIGHT CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

March 31, 1999, respectively. Pro forma diluted net loss per share is computed
using the pro forma weighted average number of common and common equivalent
shares outstanding. Pro forma common equivalent shares, consisting of common
stock subject to repurchase and incremental common shares issuable upon the
exercise of stock options and warrants, are excluded from diluted net loss per
share as they are antidilutive.

Pro forma stockholders' equity

  Effective upon the closing of the Company's initial public offering in
October 1999, the outstanding shares of mandatorily redeemable convertible
preferred stock automatically converted into 4,775,455 shares of common stock.

New accounting standards

  In December 1999, the SEC issued Staff Accounting Bulletin 101 ("SAB 101"),
"Revenue Recognition," which provides guidance on the recognition,
presentation and disclosure of revenue in financial statements filed with the
SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue
and provides guidance for disclosure related to revenue recognition policies.
At this time, the Company is still assessing the impact of SAB 101 and its
effect (if any) on the Company's financial position, results of operations and
cash flows.

2. Basis of Presentation

  The consolidated financial statements are unaudited and, in the opinion of
management, reflect all adjustments (consisting only of normal recurring
adjustments) that are necessary for a fair presentation of the results for the
periods shown. The results of operations for such periods are not necessarily
indicative of the results expected for the full fiscal year or for any future
period. These consolidated financial statements should be read in conjunction
with the financial statements as of December 31, 1999 and related notes
included in the Company's Annual Report on Form 10-K, filed with the SEC on
March 28, 2000.

  The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements. Actual results may differ from those estimates.

3. nFront Business Combination

  On February 10, 2000, the Company consummated its merger with nFront upon
obtaining regulatory and stockholder approval. The merger was accounted for as
a pooling of interests and was effected by the exchange of 8,253,735 shares of
Digital Insight common stock for all of the outstanding shares of nFront
common stock. In addition, the Company converted the nFront stock options into
options to purchase 627,926 shares of Digital Insight common stock.

  The financial results for Digital Insight and nFront have been combined for
the historical periods presented in accordance with the pooling of interests
method. In addition, the Company recorded a one-time charge of approximately
$12.7 million for merger costs comprised of direct transaction costs and
nonrecurring redundant costs.

4. Acquisitions

  On March 30, 2000, the Company entered into a definitive agreement to
acquire all of the outstanding stock of AnyTime Access, Inc., a company based
in Sacramento, California that provides services and solutions that allow
credit unions, banks and other financial institutions to outsource their
consumer loan origination and

                                       6
<PAGE>

                          DIGITAL INSIGHT CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

processing functions. Upon the closing of the transaction, the Company will
issue approximately 2,126,755 shares in the form of common stock and shares
underlying options and warrants to purchase common stock in exchange for all
of the outstanding shares, options and warrants of AnyTime Access. The number
of shares is based on a valuation of approximately $140 million at $66.3685
per share of the Company's common stock. The acquisition is to be accounted
for using the purchase method of accounting and will be consummated upon the
receipt of necessary regulatory and shareholder approvals, which are
anticipated to be obtained by June 30, 2000.

  On April 8, 2000, the Company entered into a definitive agreement to acquire
the outstanding shares of 1View Network Corporation, a company based in San
Francisco that provides electronic information aggregation solutions for the
financial services market. The purchase price is to be comprised of $5 million
in cash and 1.1 million shares of the Company's common stock. The acquisition
is to be accounted for using the purchase method of accounting and will be
consummated upon the receipt of necessary regulatory and stockholder
approvals, which are anticipated to be obtained by June 30, 2000.

5. Balance Sheet Components

  Short-term investments are comprised of the following:

<TABLE>
<CAPTION>
                                                          March 31, December 31,
                                                            2000        1999
                                                          --------- ------------
     <S>                                                  <C>       <C>
     U.S. Government obligations.........................  $ 9,478    $ 7,402
     Commercial paper....................................   12,703     15,344
     Others..............................................    2,998      6,519
                                                           -------    -------
                                                           $25,179    $29,265
                                                           =======    =======
</TABLE>

  Property and equipment are comprised of the following:

<TABLE>
<CAPTION>
                                                         March 31, December 31,
                                                           2000        1999
                                                         --------- ------------
     <S>                                                 <C>       <C>
     Leasehold improvements.............................  $   650    $   479
     Data processing equipment..........................   14,002     11,916
     Furniture and fixtures.............................    1,698      1,388
     Construction in process............................    2,529      1,125
                                                          -------    -------
     Less accumulated depreciation and amortization.....   (3,479)    (2,545)
                                                          -------    -------
                                                          $15,400    $12,363
                                                          =======    =======
</TABLE>


                                       7
<PAGE>

                          DIGITAL INSIGHT CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Income Taxes

  As a result of net losses and the Company's inability to recognize a benefit
for its deferred tax assets, the Company did not record a provision for income
taxes in either the three months ended March 31, 2000 or the three months
ended March 31, 1999.

7. Westlake Village Facility Lease

  The Company entered into a lease on March 6, 2000 for a 52,130 square foot
facility in Westlake Village, California. The lease expires on March 31, 2005.
The annual basic rental is approximately $845,000, plus triple net obligations
based on 49.26% allocable share. In connection with the lease, the Company
provided a letter of credit in the amount of $760,000 as a security deposit.
The Company began construction to adapt the facility to its intended use as
general office space, including data center operations, storage, and research
and development.

                                       8
<PAGE>

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

  This Quarterly Report on Form 10-Q contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including, without
limitation, statements regarding our expectations, beliefs, intentions or
future strategies that are signified by the words "expects," "anticipates,"
"intends," "plans," "believes" or other similar expressions. Our actual
results could differ materially from those discussed in this document. All
forward-looking statements included in this document are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements. The cautionary statements made in this
document should be read as being applicable to all related forward-looking
statements wherever they appear in this document.

Overview

  Digital Insight is the leading provider of Internet banking solutions for
community financial institutions, with over 767 financial institution
customers as of March 31, 2000. We offer these community financial
institutions an outsourced service, branded in their name, which includes home
banking for their individual customers, business banking for their commercial
customers, a target marketing program to enable them to sell additional
financial services, and customized web site design and implementation
services. Since inception, substantially all of our revenues have been derived
from our Internet home banking services, associated features and web site
development. In February 2000, we acquired nFront, Inc., a company based in
Atlanta, Georgia that provides Internet banking and other financial services.
With the acquisition of nFront and its proprietary "fat server" architecture,
we now offer unparalleled expertise in both real time and batch processing.

  Our revenues consist primarily of recurring monthly service fees and, to a
lesser extent, one-time implementation fees. Our recurring revenues consist of
service fees paid to us by our financial institution customers based on the
number of end users or end user transactions, and fees for hosting and
maintaining their web sites and other monthly services. To the extent that our
installed base of customers continues to grow, we expect recurring service
fees to represent an increasing percentage of our revenues in the future. Our
customer contracts range from one to five years.

  We require a 50% non-refundable cash deposit of product implementation fees,
payable at the time that a contract is signed. We record these deposits as
deferred revenues and, together with the balance of the implementation fees,
we recognize them upon completion of implementation and customer approval.
Recognition is usually two to four months from the contract date. Upon
completion of implementation and customer approval, we begin to receive and
recognize recurring service fees. For the three months ended March 31, 2000,
no single customer accounted for more than 5% of our revenues.

  Cost of revenues consists of implementation and service costs.
Implementation costs are comprised primarily of salaries for implementation
personnel and fees paid to third parties, including bill payment and data
processing vendors. Service costs consist primarily of salaries and related
personnel expenses, network costs, expenses related to the operation of our
data center and fees paid to third parties, including bill payment vendors,
data processing vendors and communication services providers. Gross margin is
affected by the relative proportion of lower margin implementation fees and
higher margin service fees we generate, the mix of products we sell,
competitive pricing pressures and the size and complexity of our
implementations.

  Sales, general and administrative expenses consist primarily of salaries and
related expenses for executive, sales, marketing, finance, human resources and
administrative personnel and other general corporate expenses. In addition,
these expenses include marketing expenses such as trade shows and promotional
costs.

  Research and development expenses consist primarily of salaries, related
personnel expenses and consultant fees related to the design, development,
testing and enhancement of both our products and our data processing vendor
interface software. We expense all research and development costs as incurred.

                                       9
<PAGE>

  On February 10, 2000, we completed our acquisition of nFront, Inc., which
was accounted for as a pooling of interests. The results of operation data for
the three months ended March 31, 1999 and the balance sheet data as of
December 31, 1999 have been adjusted to reflect the nFront acquisition. Under
the terms of the acquisition, we exchanged 8,253,735 shares of Digital Insight
common stock for all of nFront's outstanding shares.

Comparisons of Quarters Ended March 31, 2000 and March 31, 1999

  Revenues. Revenues increased from $4.2 million for the quarter ended March
31, 1999 to $10.4 million for the quarter ended March 31, 2000, a 149.6%
increase. This increase was primarily due to the growth in service fees from
$3.0 million to $7.3 million. The number of active home banking end users
increased over the same period from over 372,000 to approximately 950,000, up
155% from a year earlier and 27% from the prior quarter. Implementation fees
increased from $1.2 million for the quarter ended March 31, 1999 to
$3.1 million for the quarter ended March 31, 2000. During the first quarter of
2000, we added a total of 154 new financial institution customers, including
151 new Internet banking contracts and 76 new cash management contracts. At
March 31, 2000, we had contracts with a total of 880 customers, 767 of which
had contracted for our Internet banking service and 282 of which had
contracted for our cash management service. As of March 31, 2000, the total
number of potential end users of contracted Internet banking institutions was
18.5 million versus 7.9 million a year earlier. End user penetration of live
Internet banking institutions was 6.7% at March 31, 2000 versus 4.7% a year
earlier.

  Gross Profit. Gross profit increased from $1.5 million for the quarter ended
March 31, 1999 to $4.3 million for the quarter ended March 31, 2000. Gross
margin improved from 35.2% to 41.6% primarily due to leverage of our
implementation costs as a result of higher implementation fees generated
during the quarter, and service fees margin improved due to continued end user
growth without a corresponding increase in costs. Implementation gross margin
declined from 25.4% to 22.7%, and service gross margin improved from 39.1% to
49.5%. Implementation gross margin may vary from period to period based upon
fluctuations in our implementation revenues and increases in our
implementation infrastructure. However, such fluctuations should not have a
significant impact on overall gross margin.

  Sales, General and Administrative. Sales, general and administrative
expenses increased from $2.6 million for the quarter ended March 31, 1999 to
$9.0 million for the quarter ended March 31, 2000. This increase was primarily
due to an increase in sales commissions associated with higher revenues and
higher personnel expenses for sales and marketing staff and, to a lesser
extent, due to our corporate branding effort, other promotional expenses and
expenses for additional marketing support programs. This increase was also due
to increased staffing for finance and accounting, new senior management
positions and growth in recruiting and human resources expenses resulting from
the merger with nFront, Inc. Sales, general and administrative expenses as a
percentage of revenues increased from 61.7% for the quarter ended March 31,
1999 to 86.5% for the quarter ended March 31, 2000.

  Research and Development. Research and development expenses increased from
$1.4 million for the quarter ended March 31, 1999 to $3.7 million for the
quarter ended March 31, 2000. This increase was primarily due to higher
personnel expenses related to more full-time software engineering staff
required for the functional enhancement of existing products and, to a lesser
extent, due to the development of new products. Research and development
expenses as a percentage of revenues increased from 32.6% for the quarter
ended March 31, 1999 to 35.7% for the quarter ended March 31, 2000, primarily
as a result of an increase in revenues.

  Amortization of Stock-Based Compensation. Amortization of stock-based
compensation increased from $234,000 for the quarter ended March 31, 1999 to
$329,000 for the quarter ended March 31, 2000. This increase was primarily due
to the hiring of new employees and related stock option grants during the
first nine months of 1999, prior to our initial public offering, when the
grant price and the deemed fair value of our common stock differed.

  Merger-related Expenses. One-time merger-related expenses represent merger
costs comprised of direct transaction costs and redundant costs related to the
nFront merger consummated on February 10, 2000.

  Interest Income. Interest income increased from $44,000 for the quarter
ended March 31, 1999 to $995,000 for the quarter ended March 31, 2000. This
increase was primarily due to higher average cash balances in the quarter
ended March 31, 2000.

                                      10
<PAGE>

  Net Loss. Net loss for the quarter ended March 31, 2000 was $20.4 million,
which includes non-recurring merger-related costs of $12.7 million. Net loss
for the quarter, excluding non-recurring merger-related expenses and
amortization of stock-based compensation, was $7.4 million, or a loss of $0.32
per share based on the weighted average number of 22.8 million shares of
common stock outstanding, versus a consensus estimate of a $0.34 loss per
share. As of March 31, 2000, we had an accumulated deficit of approximately
$47.3 million.

Provision for Income Taxes

  We incurred operating losses through March 31, 2000, and therefore have not
recorded any significant provision for income taxes. We have recorded a
valuation allowance for the full amount of our net operating loss carry-
forwards, as future realization of the tax benefit is not currently likely.

Liquidity and Capital Resources

  Prior to our initial public offering, we financed our operations primarily
through the private placement of equity securities, raising approximately
$20.8 million, including $8.4 million raised in May 1999. On October 6, 1999,
we completed our initial public offering by issuing 4,025,000 shares of common
stock (including the exercise of the underwriters' over-allotment option) and
realized proceeds, net of underwriting discounts, commissions and issuance
costs, of $54.5 million. In conjunction with the initial public offering, our
mandatorily convertible preferred stock converted to common stock and all
warrants to purchase preferred stock became warrants to purchase common stock.

  At March 31, 2000, we had cash and cash equivalents of $57.5 million. We
have a $2.0 million equipment leasing line of credit with a bank, under which
$621,000 was outstanding at March 31, 2000. At March 31, 2000, we also had an
additional $64,000 in equipment financing outstanding with an equipment
leasing company.

  Net cash used in operating activities was $18.7 million for the quarter
ended March 31, 2000 and $932,000 for the quarter ended March 31, 1999. The
increases in cash used in operating activities were primarily due to increases
in net loss and merger-related costs.

  Net cash used in investing activities was $3.3 million for the quarter ended
March 31, 2000 and $528,000 for the quarter ended March 31, 1999. The
increases in cash used in investing activities were primarily due to an
increase in short-term investments and a $1.2 million expenditure for
computers and other equipment.

  We have no material commitments other than obligations under our credit
facilities and operating and capital leases, which include a sublease we
entered into in August 1999 to occupy additional space in our principal
facility in Calabasas, California beginning on December 1, 1999, a lease for
the Norcross, Georgia facility we assumed on February 10, 2000 through the
nFront acquisition, and a lease for the Westlake Village, California facility
we entered into on March 6, 2000. Commitments for base rent under our
Calabasas, Norcross and Westlake Village facility leases are $1,840,000,
$2,309,000 and $2,180,000, respectively, for the next three years. Future
capital requirements will depend upon many factors, including the timing of
research and product development efforts and the expansion of our marketing
efforts. We expect to continue to expend significant amounts on expansion of
facility infrastructure, ongoing research and development, computer and
related data center equipment, and personnel.

  We believe that our cash and cash equivalents balances and funds available
under our existing lines of credit will be sufficient to satisfy our cash
requirements for at least the next 18 months. We intend to invest our cash in
excess of current operating requirements in short-term, interest-bearing,
investment grade securities.

Impact of Year 2000

  Many computers, software and other equipment include computer code in which
calendar year data is abbreviated to only two digits. As a result of this
design decision, some of these systems may have failed to operate or produce
correct results if "00" is interpreted to mean 1900, rather than 2000. These
problems were commonly referred to as the "Year 2000" problem.

                                      11
<PAGE>

  The Year 2000 problem affects the computers, software, other equipment that
we use, operate or maintain for our operations, and services provided by
third-party vendors. As a result, we formalized our Year 2000 compliance plan,
which was implemented by a team of employees led by our internal information
technology staff. This staff was responsible for monitoring the assessment,
including potential effects and costs, of our Year 2000 projects and
remediation of any Year 2000 problems. As part of our Year 2000 compliance
plan, we contacted our third-party vendors of products and services integrated
into our products to identify and, to the extent possible, resolve issues
relating to the Year 2000 problem. To date, we have not experienced any
significant Year 2000 problems in our operations or services provided by
third-party vendors. However, we cannot assure you that problems will not
develop in the future.

  Our costs to address Year 2000 compliance have been approximately $250,000
and were included in operating expenses for the year ended December 31, 1999,
as reported in our Annual Report on Form 10-K, filed with the SEC on March 28,
2000.

Subsequent Events

  On March 30, 2000, we entered into a definitive agreement to acquire all of
the outstanding stock of AnyTime Access, Inc., a company based in Sacramento,
California that provides services and solutions that allow credit unions,
banks and other financial institutions to outsource their consumer loan
origination and processing functions. Upon the closing of the transaction, we
will issue a total of approximately 2,126,755 shares of our common stock and
shares underlying options and warrants to purchase our common stock in
exchange for all of the outstanding shares, options and warrants of AnyTime
Access. The number of shares is based on a valuation of approximately $140
million at $66.3685 per share of our common stock. The acquisition is to be
accounted for using the purchase method of accounting and will be consummated
upon the receipt of necessary regulatory and shareholder approvals, which are
anticipated to be obtained by June 30, 2000.

  On April 8, 2000, we entered into a definitive agreement to acquire the
outstanding shares of 1View Network Corporation, a company based in San
Francisco that provides electronic information aggregation solutions for the
financial services market. The purchase price is to be comprised of $5 million
in cash and 1.1 million shares of our common stock. The acquisition is to be
accounted for using the purchase method of accounting and will be consummated
upon the receipt of necessary regulatory and stockholder approvals, which are
anticipated to be obtained by June 30, 2000.

Risk Factors that May Affect our Financial Condition and Results of Operations

  You should carefully consider the following risks in your evaluation of
Digital Insight. The risks and uncertainties described below are not the only
ones we face. Additional risks and uncertainties may also adversely impact and
impair our business. If any of the following risks actually occur, our
business, results of operations or financial condition would likely suffer. In
such case, the trading price of our common stock could decline.

  We have a limited operating history in an early-stage market and, as a
result, our business strategy may not prove to be successful.

  We began operations in July 1995. Accordingly, we have a limited operating
history, and our business and prospects must be considered in light of the
early-stage, rapidly evolving and uncertain Internet banking market in which
we operate. As a result:

  .  fluctuations in our operating results may be significant relative to our
     revenues;

  .  community financial institutions may not widely adopt Internet banking
     in general or our solution in particular;

  .  the Internet and the systems and networks of third parties may not
     operate efficiently; and

  .  competition and rapid technological change in the industry could
     adversely affect market acceptance of all of our products and services.

                                      12
<PAGE>

  As a result, our business strategy may not prove to be successful.

  We have a history of losses, expect future losses and cannot assure you that
we will achieve profitability.

  Although our revenues have increased in every quarter since 1996, we have
not achieved profitability and cannot be certain that we will realize
sufficient revenue to achieve profitability. We incurred net losses of
$712,000 in the year ended December 31, 1996, $2.5 million in the year ended
December 31, 1997, $4.4 million in the year ended December 31, 1998 and $7.5
million in the year ended December 31, 1999. As of March 31, 2000, we had an
accumulated deficit of approximately $47.3 million. We plan to increase our
operating expenses to expand our sales and marketing operations, broaden our
customer support capabilities and continue to build our operational
infrastructure. If growth in our revenues does not outpace the increase in
these expenses, we may not achieve or sustain profitability.

  The expected fluctuations of our operating results could cause our stock
price to fluctuate.

  We expect that our operating results may fluctuate significantly in the
future based upon a number of factors, many of which are not within our
control. We base our operating expenses on anticipated revenue growth and our
operating expenses are relatively fixed in the short term. The implementation
and utilization of our products involves a commitment of resources and
recurring expense by our customers and us. Among other things, we generally
provide a significant level of education to prospective customers regarding
the use and benefits of our products. We may expend substantial funds and
management resources during the sales cycle and fail to make the sale.
Accordingly, our results of operations for a particular period may be
adversely affected if the sales forecasted for that period are delayed or do
not occur. As a result, if our revenues are lower than we expect in some
future period, our operating results may be below the expectations of market
analysts or investors. If this occurs, the price of our common stock would
likely decrease.

  Our operating results may also fluctuate in the future due to a variety of
other factors, including:

  .  the overall level of demand for Internet banking services by consumers
     and businesses and the demand for our products, product enhancements and
     services in particular;

  .  spending patterns and budgetary resources of community financial
     institutions and their end user customers;

  .  technical difficulties, system downtime, system failures or reductions
     in service levels;

  .  the timing of upgrades to our computer hardware infrastructure;

  .  increases in operating costs beyond anticipated levels;

  .  the timing of customer product implementations or our failure to timely
     complete scheduled product implementations;

  .  delays in purchasing decisions or product implementations or decreases
     in demand for Internet banking by financial institutions due to Year
     2000 concerns; and

  .  governmental actions affecting Internet operations or content.

  We may not achieve the benefits we expected from the acquisition of nFront,
which may have a material adverse effect on our business, financial condition
and operating results and/or could result in loss of key personnel.

  We completed our acquisition of nFront, Inc. on February 10, 2000. We are
continuing to overcome significant challenges in order to realize the benefits
and synergies from the acquisition, including the timely, efficient and
successful execution of a number of post-merger events. Key events include:

  .  integrating the operations of the two companies;

  .  retaining and assimilating the key personnel of each company;

                                      13
<PAGE>

  .  offering the existing services of each company to the other company's
     customers;

  .  retaining the existing customers and strategic partners of each company;

  .  developing new services that utilize the assets of both companies; and

  .  maintaining uniform standards, controls, procedures and policies.

  The successful execution of these post-merger events involves considerable
risk and we may not be successful in executing them. These risks include:

  .  the potential disruption of our ongoing business and distraction of its
     management;

  .  the difficulty of incorporating acquired technology and rights into the
     combined company's products and services;

  .  unanticipated expenses related to technology integration;

  .  the impairment of relationships with employees and customers as a result
     of any integration of new management personnel; and

  .  potential unknown liabilities associated with the acquired business.

  We may not succeed in addressing these risks or any other problems
encountered during the integration process.

  We currently rely on two independent data centers to provide our Internet
banking products and services; any failure in either data center could cause
us to lose customers.

  In the event of a failure or interruption in our systems, our reputation
could be materially adversely harmed and we could lose many of our current and
potential customers. Following the acquisition of nFront, all of our
communications and network equipment is currently located at our corporate
headquarters in Calabasas, California and at our regional data center in
Norcross, Georgia. We plan to integrate these two data centers to provide
system redundancy and emergency backup capability. We have also contracted to
establish functional backup and failover capabilities for our Internet banking
with an outside data center provider in Herndon, Virginia for the Calabasas
facility and another data center in Sterling, Virginia for the Norcross
facility. We cannot assure that these data centers will become fully
integrated as scheduled or that, when fully integrated, these data centers
will provide system redundancy and failover backup as expected. We do not
currently have sufficient backup facilities to provide Internet services if
either the Calabasas facility or the Norcross facility is not functioning. A
natural disaster, such as a fire, an earthquake or a flood, at either of our
facilities could result in failures or interruptions in providing our Internet
banking products and services to our customers. In addition, our systems are
vulnerable to computer viruses, physical or electronic break-ins, power loss,
telecommunications failure and similar events. For example, in April 1999, a
failure of a critical router in our Internet banking data center caused an
outage of approximately six hours while the problem was corrected. We have
also contracted to provide a certain level of service to our customers, and a
failure or interruption of our system has in the past caused and in the future
could cause us to refund fees to some of our customers to compensate for
decreased levels of service. Even with the integration of our two facilities
and the installation of the third-party data centers, we could experience a
failure or interruption in our systems, which could lead to delays, loss of
data or the inability to provide our services to our customers.

  We are dependent on the widespread adoption of Internet banking by community
financial institutions, which have historically been slow to do so.

  We expect that we will continue to depend on Internet banking products and
services for substantially all of our revenues in the foreseeable future.
However, the market for Internet banking has only recently begun to develop.
To date, Internet banking has developed slowly within financial institutions,
and purchasing decisions for Internet banking products are often delayed due
to uncertainties relating to cost, return on investment and

                                      14
<PAGE>

customer acceptance. In particular, community financial institutions have been
slower to adopt Internet banking than larger banks. We cannot predict the size
of the market for Internet banking among community financial institutions, the
rate at which that market will grow, or whether there will be widespread end
user acceptance of Internet banking products and services such as ours.

  We also depend on our financial institution customers to market and promote
our products to their end user customers. Neither we nor our financial
institution customers may be successful in marketing our current or future
Internet banking products and services. Moreover, financial institutions
generally agree to use our products and services pursuant to contracts with
durations that range from one to five years. Upon expiration, these contracts
may be discontinued. Unless our Internet banking products and services are
successfully deployed and marketed by a large number of community financial
institutions and achieve widespread market acceptance by their end user
customers for a significant period of time, we will not be able to achieve our
business objectives and increase our revenues.

  We depend on the efficient operation of the Internet, other networks and
systems of third parties; if they do not operate efficiently, we will not be
able to effectively provide our products and services.

  We depend on the efficient operation of network connections from our
customer financial institutions and their data processing vendors to our
systems. Further, portions of our revenue are dependent on continued usage by
end users of Internet banking services and their connections to the Internet.
Each of these connections, in turn, depends on the efficient operation of web
browsers, Internet service providers and Internet backbone service providers,
all of which have had periodic operational problems or have experienced
outages. In addition, the majority of our services depend on real time
connections to the systems of financial institutions and data processing
vendors. Any operational problems or outages in these systems would cause us
to be unable to provide a real time connection to these systems and we would
be unable to process transactions for end users, resulting in decreased
revenues. In addition, any system delays, failures or loss of data, whatever
the cause, could reduce customer satisfaction with our products and services
and harm our sales.

  We depend on cooperation from data processing vendors for financial
institutions, some of whom have resisted efforts in the past to allow the
integration of our products and services with their systems.

  Our products involve integration with products and systems developed by data
processing vendors that serve financial institutions. If any of our products
fail to be supported by our customers' data processing vendors, we would have
to redesign our products to suit these customers. We cannot assure that any
redesign could be accomplished in a cost-effective or timely manner. We rely
on these vendors to jointly develop technology with us and to disclose source
code specifications to enable our products to integrate effectively with their
products and systems. In the past, some vendors have resisted integrating our
products or have caused delays or other disruptions in the implementation
process. Several of these data processing vendors offer or are planning to
offer Internet banking products and services that are directly competitive
with our products and services and have resisted efforts to allow us to
integrate our products and services with their systems in the past. In
addition, our customers' data processing vendors may develop new products and
systems that are incompatible with our products. Our failure to integrate our
products effectively with our customers' data processing vendors could result
in higher implementation costs or the loss of potential customers.

  Competition from third parties could reduce or eliminate demand for our
products and services.

  The market for Internet banking services is highly competitive, and we
expect that competition will intensify in the future. We may not be able to
compete successfully against our current or future competitors and,
accordingly, we cannot be certain that we will be able to expand the number of
our customers and end users, or retain our current customers or third-party
service providers. We face competition from four main areas: other companies
with Internet banking products aimed at community financial institutions,
vendors who primarily target the largest financial institutions, vendors of
data processing services to financial institutions, and smaller, local online
service outsourcing companies. Many of our current and potential competitors
have longer operating

                                      15
<PAGE>

histories and may be in a better position to produce and market their services
due to their greater financial, technical, marketing and other resources, as
well as their significantly greater name recognition and larger installed
bases of customers. In addition, many of our competitors have well-established
relationships with our current and potential community financial institution
customers and have extensive knowledge of our industry.

  Security breaches could damage our reputation and business.

  Our networks may be vulnerable to unauthorized access, computer viruses and
other disruptive problems. We transmit confidential financial information in
providing our services. Users of Internet banking and other electronic
commerce services are concerned about the security of transmissions over
public networks. Therefore, it is critical that our facilities and
infrastructure remain secure and that our facilities and infrastructure are
perceived by the marketplace to be secure. A material security breach
affecting us could damage our reputation, deter financial institutions from
purchasing our products, deter their customers from using our products, or
result in liability to us. Further, any material security breach affecting our
competitors could affect the marketplace's perception of Internet banking in
general and have the same effects.

  Concerns over security and the privacy of users may inhibit the growth of
the Internet and other online services generally, especially as a means of
conducting commercial transactions. Any well-publicized compromise of security
could deter people from using the Internet or using it to conduct transactions
that involve transmitting confidential information. We may need to expend
significant capital or other resources to protect against the threat of
security breaches or to alleviate problems caused by breaches. Although we
intend to continue to implement state-of-the-art security measures, persons
may be able to circumvent the measures that we implement in the future.
Eliminating computer viruses and alleviating other security problems may
result in interruptions, delays or cessation of service to users accessing web
sites that deliver our services, any of which could harm our business.

  Our failure to respond to rapid change in the market for Internet banking
could cause us to lose revenue and harm our business.

  The market for Internet banking services is new and unproven and is subject
to rapid change. Our success will depend substantially upon our ability to
enhance our existing products and to develop and introduce, on a timely and
cost-effective basis, new products and features that meet changing financial
institution and end user requirements and incorporate technological
advancements. If we are unable to develop new products and enhanced
functionalities or technologies to adapt to these changes or if we cannot
offset a decline in revenues of existing products by sales of new products,
our business would suffer. In addition, our product development process
involves a number of risks. Developing technologically advanced products is a
complex and uncertain process requiring innovation as well as the accurate
anticipation of technology and market trends. We budget our research and
development expenditures based on planned product introductions and
enhancements. If we fail to timely and cost-effectively develop new products
that respond to new technologies and the needs of the Internet banking
services market, we will lose revenue and our business will suffer.

  Newly introduced products may contain undetected or unresolved defects.

  Any new or enhanced products we introduce may contain undetected or
unresolved software or hardware defects when they are first introduced or as
new versions are released. In the past, we have discovered errors in our
products and it is possible that design defects will occur in new products.
These defects could result in a loss of sales and additional costs as well as
damage to our reputation and the loss of relationships with our customers.

  The demand for our products and services could be negatively affected by
reduced growth of commerce over the Internet or delays in the development of
the Internet infrastructure.

  Our future success depends heavily on the Internet being accepted and widely
used for commerce. If Internet commerce does not continue to grow or grows
more slowly than expected, our business would suffer. There are a number of
reasons that consumers and businesses may reject the Internet as a viable
commercial medium in

                                      16
<PAGE>

general, or as a suitable vehicle for banking transactions in particular.
These reasons include potentially inadequate network infrastructure, security
concerns, slow development of enabling technologies, reliability and quality
problems, and issues relating to ease and cost of access. In particular, the
Internet infrastructure may not be able to support the demands placed on it by
increased Internet usage and data transmission capacity requirements. In
addition, delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity, or increased
government regulation could cause the Internet to lose its viability as a
commercial medium. Even if the required infrastructure, standards, protocols
or complementary products, services or facilities are developed, we may incur
substantial expenses adapting our solutions to changing or emerging
technologies.

  We could be subject to potential liability claims related to use of our
products and services.

  Financial institutions use our products and services to provide Internet
banking services to their customers. Any errors, defects or other performance
problems in our products and services could result in financial or other
damages to these financial institutions for which we are liable. A product
liability claim brought against us, even if not successful, would likely be
time consuming, result in costly litigation and could seriously harm our
business. Although our contracts typically contain provisions designed to
limit our exposure to liability claims, existing or future laws or unfavorable
judicial decisions could negate these limitation of liability provisions.
Moreover, we may be liable for transactions executed using Internet services
based on our products and services even if the errors, defects or other
problems are unrelated to our products and services.

  We are currently experiencing a period of significant growth that is placing
a strain on our resources.

  We have recently experienced significant growth, including expansion in the
number of our employees, and we anticipate that additional expansion may be
required in order to continue our growth. This growth places a significant
demand on our management and operational resources. Our management, personnel,
systems, procedures, controls and customer service may be inadequate to
support our existing and future operations. We continue to invest heavily in
our technological infrastructure and to build and scale our systems in order
to meet the demands of our growing customer base.

  Our stock price is volatile.

  The market price of our common stock could fluctuate widely in response to
the following particular factors:

  .  actual or anticipated variations in operating results;

  .  announcements by us or our competitors of new products, significant
     contracts, acquisitions, or relationships;

  .  additions or departures of key personnel;

  .  future equity or debt offerings or our announcements of these offerings;
     and

  .  economic well being of community financial institutions.

  In addition, in recent years, the stock market in general, and the Nasdaq
National Market and the securities of technology companies in particular, have
experienced extreme price and volume fluctuations. These fluctuations have
often been unrelated or disproportionate to the operating performance of
individual companies. These broad market fluctuations may materially adversely
affect our stock price, regardless of our operating results.

  Government regulation of our business could cause it to incur significant
expenses, and failure to comply with certain regulations, if adopted, could
make our business less efficient or impossible.

  The financial services industry is subject to extensive and complex federal
and state regulation. Financial institutions such as commercial banks, savings
and loans and credit unions operate under high levels of

                                      17
<PAGE>

governmental supervision. Our customers must ensure that our services and
related products work within the extensive and evolving regulatory
requirements applicable to them. We do not represent that our systems comply
with such regulations.

  Neither federal depository institution regulators nor other regulators of
financial services require us to obtain any licenses. We are subject to
examination by federal depository institution regulators under the Bank
Service Company Act and the Examination Parity and Year 2000 Readiness for
Financial Institutions Act. These regulators have broad supervisory authority
to remedy any shortcomings identified in any such examination.

  Federal, state or foreign authorities could adopt laws, rules or regulations
relating to the financial services industry that affect our business, such as
by requiring us to comply with data, record keeping and processing and other
requirements. It is possible that laws and regulations may be enacted with
respect to the Internet, covering issues such as user privacy, pricing,
content, characteristics, taxation and quality of services and products.
Existing regulations may be modified. If enacted or deemed applicable to us,
these laws, rules or regulations could be imposed on our activities or our
business, thereby rendering our business or operations more costly,
burdensome, less efficient or impossible and requiring us to modify our
current or future products or services.

  Failure to attract and retain experienced personnel and senior management
could harm our ability to grow.

  We believe that our future success will depend in large part upon our
continued ability to identify, hire, retain and motivate highly skilled
employees, who are in great demand. In particular, we believe that we must
expand our research and development, marketing, sales and customer support
capabilities in order to effectively serve the evolving needs of our present
and future customers. Competition for these employees is intense and we may
not be able to hire additional qualified personnel in a timely manner and on
reasonable terms. In addition, our success depends on the continuing
contributions of our senior management and technical personnel, all of whom
would be difficult to replace. The loss of any one of them could adversely
affect our ability to execute our business strategy.

  Our limited ability to protect our proprietary technology may adversely
affect our ability to compete, and we may be found to infringe proprietary
rights of others, which could harm our business.

  Our future success and ability to compete depends in part upon our
proprietary technology. None of our technology is currently patented. Instead,
we rely on a combination of contractual rights and copyright, trademark and
trade secret laws to establish and protect our proprietary technology. We
generally enter into confidentiality agreements with our employees,
consultants, resellers, customers and potential customers. We also limit
access to and distribution of our source code, and further limit the
disclosure and use of other proprietary information. We cannot assure that the
steps taken by us in this regard will be adequate to prevent misappropriation
of our technology or that our competitors will not independently develop
technologies that are substantially equivalent or superior to our technology.
Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy or otherwise obtain or use our products or technology.
Monitoring unauthorized use of our products is difficult, and while we are
unable to determine the extent to which piracy of our software products
exists, software piracy can be expected to be a persistent problem. In
addition, the laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the United States.

  We are also subject to the risk of claims and litigation alleging
infringement of the intellectual property rights of others. Third parties may
assert infringement claims in the future with respect to our current or future
products. Any assertion, regardless of its merit, could require us to pay
damages or settlement amounts and could require us to develop non-infringing
technology or pay for a license for the technology that is the subject of the
asserted infringement. Any litigation or potential litigation could result in
product delays, increased costs or both. In addition, the cost of litigation
and the resulting distraction of our management resources could adversely
affect our operating results. We also cannot assure that any licenses for
technology necessary for our business will be available or that, if available,
these licenses can be obtained on commercially reasonable terms.

                                      18
<PAGE>

  Consolidation of the banking and financial services industry could cause our
sales to fall.

  Consolidation of the banking and financial services industry could result in
a smaller market for our products and services. A variety of factors could
cause our customers to reassess their purchase or potential purchase of our
products and could result in termination of services by existing customers.
After consolidation, banks and other financial institutions may experience a
realignment of management responsibilities and a reexamination of strategic
and purchasing decisions. We may lose relationships with key constituencies
within our customer's organization due to budget cuts, layoffs, or other
disruptions following a consolidation. In addition, consolidation may result
in a change in the technological infrastructure of the combined entity. Our
products and services may not integrate with this new technological
infrastructure. The acquiring institution may also have its own in-house
system or outsource to competitors. For example, in May 1999, we lost Home
Savings of America as a customer after it was acquired by Washington Mutual,
which decided to integrate Home Savings' end users into its existing home
banking system.

  Future sales of our shares could affect the stock price.

  The market price of our common stock could fall dramatically if stockholders
sell large amounts of stock in the public market. These sales, or the
possibility that these sales may occur, could affect the market price of our
common stock and could make it more difficult for us to sell equity or equity-
related securities in the future. As of May 1, 2000, there were 23,256,250
shares of our common stock outstanding. Of these, 1,365,436 shares are limited
by restrictions under applicable securities laws. These shares will be
eligible for sale in the public market as follows:

<TABLE>
<CAPTION>
     First Eligible Sale Date                                 Number of Shares
     ------------------------                                 ----------------
     <S>                                                      <C>
     May 25, 2000............................................     521,400
     May 26, 2000............................................     844,036
</TABLE>

  In addition, approximately 13,504,833 shares held by our affiliates are
subject to certain conditions and restrictions under federal securities laws,
including satisfying applicable holding periods, filing appropriate notices,
the availability of current public information about us, and complying with
certain limitations on the volume of sales.

  As of May 1, 2000, options to purchase 3,252,432 shares of common stock were
outstanding and 1,248,438 shares of common stock were available for future
grant pursuant to our stock plans. Our 1999 Stock Plan is subject to annual
increases beginning on March 1, 2001, equal to the lesser of 750,000 shares,
5% of our shares on that date, or a lesser amount determined by the board of
directors. We have registered the shares of common stock underlying
outstanding options and those reserved for issuance under our stock option
plans and under our employee stock purchase plans. Accordingly, shares
underlying vested options and stock purchase rights will be eligible for
resale upon their exercise.

  In addition, there are 22,222 shares underlying outstanding warrants that
will be eligible for resale in the public market upon expiration of the
warrant holders' respective one-year holding periods under Rule 144, which
will begin upon the date of exercise, or, in the case of a net exercise, on
the date of grant of the warrant.

  Potential acquisitions involve risks.

  We intend to continuously evaluate our position within our industry, and we
may acquire complementary technologies or businesses in the future. Due to
consolidation trends within the Internet banking services industry, failure to
adopt and successfully implement a long-term acquisition strategy could damage
our competitive position. On April 14, 2000, we filed a Current Report on Form
8-K announcing our agreements to acquire AnyTime Access, Inc. and 1View
Network Corporation. These transactions are expected to be completed in the
second quarter of 2000. Future acquisitions, including the AnyTime Access and
1View Network transactions, may involve large one-time write-offs and
amortization expenses related to goodwill and other

                                      19
<PAGE>

intangible assets. Any of these factors could adversely affect our operating
results or stock price. Acquisitions involve numerous risks, including:

  .  difficulties in assimilating the operations, products, technology,
     information systems and personnel of the acquired company with our
     operations;

  .  diverting our management's attention from other business concerns;

  .  impairing relationships with our employees, affiliates, strategic
     marketing alliances and content providers;

  .  inability to maintain uniform standards, controls, procedures and
     policies;

  .  entering markets in which we have no direct prior experience; and

  .  losing key employees of the acquired company.

  Some or all of these risks could result in a material adverse effect on our
business, financial condition and operating results. In addition, we cannot
assure you that the AnyTime Access or 1View Network transactions will close as
scheduled, or at all, or that we will be able to identify other suitable
acquisition candidates that are available for sale at reasonable prices. We
may elect to finance future acquisitions using some or all of the proceeds
from our initial public offering. We may also elect to finance future
acquisitions with debt financing, which would increase our debt service
requirements, or through the issuance of additional common or preferred stock,
which could result in dilution to our stockholders. There can be no assurance
that we will be able to arrange adequate financing for any acquisitions on
acceptable terms.

  Our charter and bylaws and Delaware law contain provisions which could
discourage a takeover.

  Provisions of our charter and bylaws may make it more difficult for a third
party to acquire, or may discourage a third party from attempting to acquire,
control of us, even if doing so would be beneficial to our stockholders. These
provisions could limit the price that investors might be willing to pay in the
future for shares of our common stock. These provisions include:

  .  division of the board of directors into three separate classes;

  .  elimination of cumulative voting in the election of directors;

  .  prohibitions on our stockholders from acting by written consent and
     calling special meetings;

  .  procedures for advance notification of stockholder nominations and
     proposals; and

  .  the ability of the board of directors to alter our bylaws without
     stockholder approval.

  In addition, our board of directors has the authority to issue up to
5,000,000 shares of preferred stock and to determine the price, rights,
preferences, privileges and restrictions, including voting rights, of those
shares without any further vote or action by the stockholders. The issuance of
preferred stock, while providing flexibility in connection with possible
financings or acquisitions or other corporate purposes, could have the effect
of making it more difficult for a third party to acquire a majority of our
outstanding voting stock.

  We are also subject to Section 203 of the Delaware General Corporation Law
which, subject to exceptions, prohibits a Delaware corporation from engaging
in any business combination with any interested stockholder for a period of
three years following the date that this stockholder became an interested
stockholder. The preceding provisions of our charter and bylaws, as well as
Section 203 of the Delaware General Corporation Law, could discourage
potential acquisition proposals, delay or prevent a change of control and
prevent changes in our management.

                                      20
<PAGE>

  Members of management and our board of directors, and their affiliates,
control 58.07% of our common stock.

  As of May 1, 2000, members of our executive management team and our board of
directors, and their affiliates, controlled approximately 58.07% of our common
stock. As a result, these management members and directors will be able to
significantly influence matters requiring stockholder approval. Moreover, this
concentration of ownership could have the effect of delaying or preventing a
change in control.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

  We are exposed to the impact of interest rate changes and changes in the
market values of our investments. Our interest income is sensitive to changes
in general level of U.S. interest rates. In this regard, changes in U.S.
interest rates affect the interest earned on our cash equivalents. Our
exposure to market rate risk for changes in interest rates relates primarily
to our investment portfolio. We have not used derivative financial instruments
in our investment portfolio. We invest our excess cash in debt instruments of
the U.S. Government and its agencies, and in high-quality corporate issuers
and, by policy, limit the amount of credit exposure to any one issuer. We
protect and preserve our invested funds by limiting default, market and
reinvestment risk. 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 which
have declined in market value due to changes in interest rates.

                                      21
<PAGE>

                         PART II -- OTHER INFORMATION

ITEM 2. Changes in Securities and Use of Proceeds

  (c) Recent Sales of Unregistered Securities. During the quarter ended March
31, 2000, upon the exercise of a warrant to purchase shares of common stock,
we issued 21,648 shares of common stock for a purchase price equivalent of
approximately $75,119. The holder of the warrant elected to exercise through a
cashless exercise method by reducing the number of shares eligible for
purchase by that number of shares equal to the aggregate purchase price. The
offer and sale of those shares was exempt from the registration requirements
of the Securities Act of 1933 by virtue of Sections 3(a)(9) and 4(2) thereof
or Regulation D promulgated thereunder.

  (d) Use of Proceeds From Sales of Registered Securities. The effective date
of our first registration statement, filed on Form S-1 under the Securities
Act of 1933 (No. 333-81547) relating to our initial public offering of our
common stock, was September 30, 1999. A total of 4,025,000 shares of our
common stock were sold at the closing at a price of $15.00 per share to an
underwriting syndicate led by Morgan Stanley Dean Witter, Incorporated,
Deutsche Bank Securities Inc., Banc of America Securities LLC and Friedman,
Billings, Ramsey & Co., Inc. Public trading commenced on October 1, 1999, and
the offering closed on October 6, 1999. The initial public offering resulted
in gross proceeds of $60.4 million, $4.2 million of which was applied toward
underwriting discount and commissions. Expenses related to the offering
totaled approximately $1.7 million. We received net proceeds in the amount of
$54.5 million. We have used the net proceeds from our initial public offering
to invest in interest bearing investment grade instruments and have used our
previously existing cash balances to fund our general operations. In
connection with the acquisition of nFront, Inc., the proceeds from the initial
public offering were also used in effectuating the transaction and in
integrating our two companies following the merger. We may also use a portion
of the net proceeds for acquisitions of complementary businesses, services and
technology. None of the net proceeds of our public offering were paid directly
or indirectly to any director, officer, or general partner of Digital Insight
or their associates, to any person owning 10% or more of any class of equity
securities of Digital Insight, or to any affiliate of Digital Insight.

ITEM 4. Submission of Matters to a Vote of Security Holders

  At a special meeting of stockholders held on February 10, 2000, our
stockholders voted with respect to the following matters:

  .  To approve the issuance of shares of Digital Insight common stock in the
     merger of a wholly owned subsidiary of Digital Insight with and into
     nFront, Inc. as contemplated by the Agreement and Plan of Merger and
     Reorganization, dated as of November 21, 1999, among Digital Insight,
     Black Transitory Corporation and nFront, as amended by Amendment No. 1
     to the Agreement and Plan of Merger and Reorganization, dated January 6,
     2000.

<TABLE>
        <S>                                                           <C>
        Votes for:................................................... 12,230,559
        Votes against:...............................................     10,328
        Abstentions:.................................................      1,684
        Broker non-votes:............................................          0
</TABLE>

  .  To approve an amendment to our 1999 Stock Plan to increase the number of
     shares of common stock reserved for issuance under the plan from
     1,500,000 to 2,500,000 shares.

<TABLE>
        <S>                                                           <C>
        Votes for:................................................... 11,443,541
        Votes against:...............................................    796,846
        Abstentions:.................................................      2,184
        Broker non-votes:............................................          0
</TABLE>


                                      22
<PAGE>

ITEM 6. Exhibits and Reports on Form 8-K

  (a) Exhibits

  The following exhibits are filed as part of, or incorporated by reference
into, this Quarterly Report on Form 10-Q:

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
  2.1*   Agreement and Plan of Merger, dated as of March 30, 2000, by and among
         Digital Insight Corporation, ATA Acquisition Corp., and AnyTime
         Access, Inc.

  2.2    First Amendment to Agreement and Plan of Merger, dated as of May 2,
         2000, by and among Digital Insight Corporation, ATA Acquisition Corp.,
         and AnyTime Access, Inc.

  2.3*   Agreement and Plan of Merger, dated as of April 8, 2000, by and among
         Digital Insight Corporation, Calabasas Acquisition Corp., and 1View
         Network Corporation.

 10.1    Lease, dated as of July 9, 1998, between Schneider Atlanta, L.P. and
         nFront, Inc.

 10.2    Standard Office Lease, dated as of March 6, 2000, by and between Arden
         Realty Finance Partnership, L.P. and Digital Insight Corporation.

 27.1    Financial Data Schedule.
</TABLE>
--------
*  Incorporated by reference to the exhibits filed with the Registrant's
   Current Report on Form 8-K, filed with the SEC on April 14, 2000.

  (b) Reports on Form 8-K

  On February 23, 2000, we filed a Current Report on Form 8-K announcing the
completion of our acquisition of nFront, Inc.

                                      23
<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.

                                          DIGITAL INSIGHT CORPORATION

Date: May 12, 2000                        By:  /s/ Kevin McDonnell
                                             ----------------------------------
                                             Kevin McDonnell
                                             Senior Vice President, Finance &
                                             Administration, Chief Financial
                                             Officer and Secretary (Principal
                                             Financial and Accounting Officer
                                             and Duly Authorized Officer)

                                      24