--------------------------------------------------------------------------------
                                 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, 2002

                                       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: 00025683

                                MARIMBA, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                   77-0422318
   (State of incorporation)                (IRS Employer Identification No.)

                440 Clyde Avenue, Mountain View, California 94043
          (Address of principal executive offices, including ZIP code)

                                 (650) 930-5282
              (Registrant's telephone number, including area code)

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

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

         The number of shares outstanding of the Registrant's Common Stock as of
April 25, 2002 was 24,240,475.
================================================================================

<PAGE>
                                  MARIMBA, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                             PAGE NO.
                                                                                             -------
<S>                                                                                          <C>
PART I.  Financial Information

Item 1.       Condensed Consolidated Balance Sheets as of March 31, 2002
              and December 31, 2001                                                               1

              Condensed Consolidated Statements of Operations for the

              Three Months Ended March 31, 2002 and 2001                                          2

              Condensed Consolidated Statements of Cash Flows for the

              Three Months Ended March 31, 2002 and 2001                                          3

              Notes to Condensed Consolidated Financial Statements                                4

Item 2.       Management's Discussion and Analysis of Financial

              Condition and Results of Operations                                                 8

Item 3.       Qualitative and Quantitative Disclosure About Market Risk                          19

PART II.  Other Information

Item 1.       Legal Proceedings                                                                  20

Item 2.       Changes in Securities and Use of Proceeds                                          20

Item 3.       Defaults Upon Senior Securities                                                    20

Item 4.       Submission of Matters to a Vote of Security Holders                                20

Item 5.       Other Information                                                                  21

Item 6.       Exhibits and Reports on Form 8-K                                                   21

Signature                                                                                        22
</TABLE>

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.

                                  MARIMBA, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                     March 31,   December 31,
                                                                        2002         2001
                                                                        ----         ----
                                                                    (unaudited)       (1)
<S>                                                                  <C>              <C>
ASSETS
Current assets:

     Cash and cash equivalents ...................................   $  21,830    $  26,141
     Short-term investments ......................................      21,853       16,249
     Accounts receivable, net of allowances of $1,395 and $2,358,
       respectively ..............................................       5,244        7,791
     Prepaid expenses and other current assets                             841        1,164
                                                                     ---------    ---------
          Total current assets ...................................      49,768       51,345
Property and equipment, net ......................................       3,411        3,900
Long-term investments ............................................      14,754       18,246
Other assets                                                               360          360
                                                                     ---------    ---------
                                                                     $  68,293    $  73,851
                                                                     =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

     Accounts payable and accrued liabilities ....................   $   2,109    $   2,378
     Accrued compensation ........................................       3,024        3,408
     Deferred revenue                                                ---------    ---------
                                                                         9,255       10,558
                                                                     ---------    ---------
          Total current liabilities ..............................      14,388       16,344

Long-term liabilities ............................................         284          265

Stockholders' equity:
     Common stock ................................................           2            2
     Additional paid-in capital ..................................     100,823      100,523
     Deferred compensation .......................................      (1,299)      (1,542)
     Accumulated other comprehensive income (loss) ...............         (74)         141
     Accumulated deficit                                               (45,831)     (41,882)
                                                                     ---------    ---------
          Stockholders' equity                                          53,621       57,242
                                                                     ---------    ---------
                                                                     $  68,293    $  73,851
                                                                     =========    =========
</TABLE>

    (1) The balance sheet at December 31, 2001 has been derived from the audited
consolidated financial statements at that date, but does not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements.

                             See accompanying notes.

                                       1
<PAGE>


                                  MARIMBA, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                                    March 31,
                                                                    ---------
                                                               2002          2001
                                                               ----          ----
                                                                   (unaudited)

<S>                                                            <C>           <C>
Revenues:
     License..............................................    $3,968        $6,983
     Service..............................................     4,093         4,021
                                                               -----         -----
Total revenues............................................     8,061        11,004
Cost of revenues:
     License..............................................       126           123
     Service..............................................     1,456         1,865
                                                               -----         -----
Total cost of revenues....................................     1,582         1,988
                                                               -----         -----
Gross profit..............................................     6,479         9,016
Operating expenses:
     Research and development.............................     2,058         3,255
     Sales and marketing..................................     6,676         8,869
     General and administrative...........................     1,565         2,126
     Amortization of deferred compensation................       552           592
                                                               -----         -----
Total operating expenses..................................    10,851        14,842

Loss from operations......................................    (4,372)       (5,826)
Interest income, net .....................................       432         1,031
                                                               -----         -----
Loss before income taxes..................................    (3,940)       (4,795)
Provision for income taxes................................         9            21
                                                               ------        -----
Net loss..................................................    $(3,949)     $(4,816)
                                                              =======      =======
Basic and diluted net loss per share......................     $ (.16)      $ (.20)
                                                               ======       ======
Weighted-average shares of common stock outstanding
  used in computing basic and diluted net loss per share..     24,219      23,575
                                                               ======      ======
</TABLE>

                             See accompanying notes.


                                       2
<PAGE>

                                  MARIMBA, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                     Three Months Ended
                                                                           March 31,
                                                                           ---------
                                                                      2002          2001
                                                                      ----          ----
                                                                         (unaudited)
<S>                                                                   <C>           <C>
Operating activities:
Net loss........................................................     $(3,949)    $ (4,816)
Adjustments to reconcile net loss to net cash used in
  operating activities:
     Depreciation...............................................         507          500
     Amortization of deferred compensation......................         552          592
     Loss on disposal of property and equipment.................           3           --
     Changes in operating assets and liabilities:
       Accounts receivable, net.................................       2,547        4,528
       Prepaid expenses and other current assets................         323          655
       Accounts payable and accrued liabilities.................        (269)         (311)
       Accrued compensation.....................................        (384)         (307)
       Long-term liabilities....................................          19            45
       Deferred revenue.........................................      (1,303)       (3,041)
                                                                      ------        ------
          Net cash used in operating activities.................      (1,954)       (2,155)
                                                                      ------        ------

Investing activities:

Capital expenditures, net.......................................          21)        (1,536)
Purchases of investments........................................      (12,387)      (16,587)
Proceeds from matured investments...............................       10,065        22,832
                                                                       ------        ------
          Net cash provided by (used in) investing activities...       (2,343)       4,709

Financing activities:
Proceeds from issuance of common stock, net of repurchases......           (9)         555
                                                                           ---      -------
          Net cash provided by (used in) financing activities...           (9)         555
                                                                           ---      -------
Effect of exchange rate changes on cash.........................           (5)           (1)
                                                                           ---           ---

Net increase (decrease) in cash and cash equivalents............       (4,311)        3,108
Cash and cash equivalents at beginning of period................       26,141        33,122
                                                                       ------        ------
Cash and cash equivalents at end of period......................      $21,830      $ 36,230
                                                                       =======     ========

Supplemental disclosure of non-cash investing and financing
  activities
       Deferred compensation....................................        $ 309        $ --
                                                                        =====         ====
</TABLE>

                             See accompanying notes.


                                       3
<PAGE>


                                  MARIMBA, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    Basis of Presentation

    The accompanying unaudited condensed consolidated financial statements have
been prepared by Marimba, Inc. ("Marimba", the "Company", "we", "our" or "us")
and reflect all adjustments, consisting only of normal recurring adjustments,
which in the opinion of management are necessary to present fairly the financial
position and the results of operations for the interim periods. The balance
sheet at December 31, 2001 has been derived from audited financial statements at
that date. The financial statements have been prepared in accordance with the
regulations of the Securities and Exchange Commission, but omit certain
information and footnote disclosures necessary to present the statements in
accordance with generally accepted accounting principles. For further
information, refer to the Consolidated Financial Statements and Notes thereto
included in Marimba's Annual Report on Form 10-K for the year ended December 31,
2001 filed with the Securities and Exchange Commission on March 28, 2002.
Results for the interim periods are not necessarily indicative of results for
the fiscal year ending December 31, 2002 or for any future interim or full-year
periods.

Net Loss Per Share

    Basic and diluted net loss per share have been computed using the
weighted-average number of shares of common stock outstanding during the period,
less shares subject to repurchase.

    The following table presents the calculation of basic and diluted net loss
per share:
<TABLE>
<CAPTION>

                                                                   Three Months Ended
                                                                        March 31,
                                                                        ---------
                                                                    2002          2001
                                                                ------------  --------
                                                                (in thousands, except per
                                                                       share data)

<S>                                                              <C>           <C>
Net loss ....................................................   $ (3,949)   $ (4,816)
                                                                ========    ========

Basic and diluted:
     Weighted-average shares of common stock outstanding ....     24,237      23,710
     Less weighted-average shares subject to repurchase .....        (18)       (135)
                                                                --------    --------
     Weighted-average shares of common stock outstanding used
in computing basic and diluted net loss per share ...........     24,219      23,575
                                                                  ======      ======

     Basic and diluted net loss per share ...................   $   (.16)   $   (.20)
                                                                ========    ========
</TABLE>


    Marimba has excluded all outstanding stock options and shares subject to
repurchase by Marimba from the calculation of diluted loss per share because all
such securities are antidilutive for all periods presented. Weighted-average
options outstanding to purchase 7,304,165 and 6,662,826 shares of common stock
for the three months ended March 31, 2002 and 2001, respectively, were not
included in the computation of diluted net loss per share, because the effect
would be antidilutive. Such securities, had they been dilutive, would have been
included in the computation of diluted net loss per share using the treasury
stock method.

Revenue Recognition

     Marimba derives its revenues primarily from two sources (i) license
revenues, which consist of software license fees and (ii) service revenues,
which are comprised of fees for maintenance and support, consulting and
training. Maintenance and support agreements provide technical support and the
right to unspecified upgrades on an if-and-when available basis. Significant
management judgments and estimates must be made and used in connection with the
revenue recognized in any accounting period. Material differences may result in
the amount and timing of our revenue for any period if our management made
different judgments or utilized different estimates.

                                       4
<PAGE>

     Marimba applies the provisions of Statement of Position 97-2 ("SOP 97-2"),
"Software Revenue Recognition", as amended by Statement of Position 98-9 ("SOP
98-9"), "Modification of SOP 97-2, Software Revenue Recognition, With Respect to
Certain Transactions" to all transactions involving the sale of software
products.

     In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"), 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 disclosures related to revenue recognition policies. Marimba
applied the provisions of SAB 101 to all revenue transactions for the first
quarter of 2002 and all of fiscal 2001. SAB 101 has not had a material impact on
our results of operations, financial position or cash flows.

     In accordance with the provisions of Accounting Principles Board Opinion
No. 29 ("APB 29"), "Accounting for Nonmonetary Transactions", Marimba records
barter transactions at the fair value of the goods or services provided or
received, whichever is more readily determinable in the circumstances. To date,
revenues from barter transactions have been insignificant and represent less
than 1% of net revenues.

     Marimba licenses software products to corporate customers, OEM partners and
resellers on a perpetual basis or a term basis. We recognize revenue from the
sale of software licenses when persuasive evidence of an arrangement exists, the
product has been delivered, the fee is fixed or determinable and collection of
the resulting receivable is probable.

     Marimba uses either a definitive customer purchase order or signed license
agreement as evidence of an arrangement. License revenues in arrangements with
customers who are not the ultimate users, primarily resellers, are not
recognized until the software is sold through to the end-user. Advance payments
from resellers for guaranteed minimum commitments are deferred until the
software is sold through to the end-user or upon expiration of the specified
commitment time period if the minimum commitments have not been met. Delivery
generally occurs when license keys and passwords have been made available to the
customer through e-mail.

     At the time of the transaction, Marimba assesses whether the fee associated
with revenue transactions is fixed or determinable and whether or not collection
is probable. We assess whether the fee is fixed or determinable based on the
payment terms associated with the transaction and our history with the customer
or with similar customers. If a significant portion of a fee is due after our
normal payment terms, we generally account for the fee as not being fixed or
determinable. In these cases, Marimba recognizes revenue as the fees become due.

     Marimba assesses the probability of collection based on a number of
factors, including past transaction history with the customer and the
credit-worthiness of the customer. If we determine that collection of a fee is
not probable, we defer the fee and recognize revenue at the time collection
becomes probable, which is generally upon receipt of cash.

     For arrangements with multiple obligations (for example, undelivered
maintenance and support), Marimba allocates revenue to each component of the
arrangement using the residual value method based on vendor specific objective
evidence of the fair value of the undelivered elements, which is specific to
Marimba. This means that Marimba defers revenue from the arrangement fee
equivalent to the fair value of the undelivered elements. Fair values for the
ongoing maintenance and support obligations for our licenses are based upon
separate sales of renewals to other customers. Fair value of services, such as
training or consulting, is based upon separate sales by us of these services to
other customers. Most of our arrangements involve multiple obligations.

     Marimba's arrangements do not generally include acceptance clauses.
However, if an arrangement includes an acceptance provision, acceptance occurs
upon the earlier of receipt of a written customer acceptance or expiration of
the acceptance period.

     Marimba recognizes revenues for maintenance and support ratably over the
maintenance term, which is generally one year. Consulting services are generally
billed based on daily rates and training services are generally billed on per
student or per class session basis. We generally recognize consulting and
training revenues as the services are performed.


                                       5
<PAGE>

Credit Risks and Revenue Concentration

     No customers accounted for greater than 10% of total revenues in the first
quarter of 2002. In the first quarter of 2001, three customers accounted for
24%, 12% and 12% of total revenues.

     Marimba performs ongoing credit evaluations of customers, but does not
generally require collateral. We grant credit terms to most customers ranging
from 30 to 90 days, however in some instances Marimba may provide longer payment
terms.

2.   Comprehensive Loss

     Comprehensive income (loss) is comprised of net income (loss) and other
comprehensive income (loss) such as foreign currency translation gain/loss and
unrealized gains or losses on available-for-sale marketable securities. Our
total comprehensive loss is as follows (in thousands):
<TABLE>
<CAPTION>

                                           Three Months Ended March 31,
                                               2002              2001
                                               ----              ----
                                                  (in thousands)
<S>                                             <C>               <C>
Net loss ....................................   $(3,949)   $(4,816)
Other comprehensive income (loss):
     Change in unrealized gains and losses on
     available-for-sale securities ..........      (210)        97
     Foreign currency translation adjustment         (5)        (1)
                                                -------    -------

         Comprehensive loss .................   $(4,164)   $(4,720)
                                                =======    =======
</TABLE>


3.  Stock Option Exchange

      On January 25, 2002, options to purchase a total 829,452 shares of
Marimba's common stock were granted under the Marimba, Inc. 2000 Supplemental
Stock Plan in exchange for canceled options accepted under the voluntary stock
option exchange program offered by Marimba during the period from April 27 to
July 23, 2001. The exercise price of the new options is $3.10 per share, the
closing price of Marimba's common stock on the Nasdaq National Market on the
date of grant of the new options. The exchange program was designed to comply
with Financial Accounting Standards Board Interpretation No. 44 ("FIN 44"),
"Accounting for Certain Transactions Involving Stock Compensation", and is not
expected to result in any additional compensation charges or variable plan
accounting.

4.  Legal Matters

Securities Litigation

     Beginning in April 2001, a number of substantially identical class action
complaints alleging violations of the federal securities laws were filed in the
United States District Court for the Southern District of New York naming as
defendants Marimba, Inc., certain of its officers and directors, and certain
underwriters of the company's initial public offering (Morgan Stanley & Co.,
Inc., Credit Suisse First Boston Corp. and Bear Stearns & Co., Inc.). The
complaints have since been consolidated into a single action, and a consolidated
amended complaint was filed on April 24, 2002. The complaints allege, among
other things, that the underwriters of our initial public offering violated the
securities laws by failing to disclose certain alleged compensation arrangements
(such as undisclosed commissions or stock stabilization practices) in the
offering's registration statement and by engaging in manipulative practices to
artificially inflate the price of Marimba's stock in the aftermarket subsequent
to the initial public offering. Marimba and certain of its officers and
directors are named in the complaints pursuant to Section 11 of the Securities
Act of 1933, and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of
1934. The complaint seeks unspecified damages. Similar complaints have been
filed against over 300 other issuers that have had initial public offerings
since 1998 and all such actions have been included in a single coordinated
proceeding. Marimba intends to defend these actions vigorously. However, due to
the inherent uncertainties of litigation, we cannot accurately predict the
ultimate outcome of the

                                       6
<PAGE>

litigation. Any unfavorable outcome of this litigation
could have an adverse impact on our business, liquidity, financial condition and
results of operations.

Beck Systems, Inc. vs. Marimba, Inc.

     On July 6, 2001, Beck Systems, Inc. filed a complaint against Marimba, Inc.
and two of its customers in the United States District Court for the Northern
District of Illinois (Beck Systems, Inc. v. Marimba, Inc. et al., Civil Action
No. 01 C 5207), alleging infringement of two patents held by Beck Systems. Beck
Systems alleges that Marimba's infringement relates to the manufacture and
marketing of Marimba's desktop/mobile management and server management products.
On August 29, 2001, Marimba filed its answer to Beck Systems' complaint, denying
any liability to Beck Systems, asserting various affirmative defenses, and
seeking the court's determination that the patents in suit are not infringed,
are invalid, and/or are unenforceable. Marimba further requested the court for
an award of attorneys' fees, costs and expenses. On April 2, 2002, Beck Systems
filed a second amended complaint in the same action alleging infringement of one
additional patent by the same Marimba products. The parties are currently
engaged in discovery for this suit, and a trial date has not been set. Marimba
intends to defend this suit vigorously. However, due to the inherent
uncertainties of litigation, we cannot accurately predict the ultimate outcome
of the litigation, particularly in cases such as this where sophisticated
factual issues must be assessed and complex technical issues must be decided.
Any unfavorable outcome of this litigation could have an adverse impact on our
business, liquidity, financial condition and results of operations.



                                       7
<PAGE>

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

     The information in this report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Act of 1934, each as amended. Such statements are based upon current
expectations that involve risks and uncertainties. Any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. For example, the words "believes," "anticipates,"
"plans," "expects," "intends" and similar expressions are intended to identify
forward-looking statements. Factors that might cause such a discrepancy include,
but are not limited to, those discussed in "Other Factors Affecting Operating
Results, Liquidity and Capital Resources" below. Additional information about
factors that could affect future results and events is included in our fiscal
2001 Form 10-K and other reports or submissions filed with the Securities and
Exchange Commission. All forward-looking statements in this report are based on
information available to Marimba as of the date hereof, and Marimba undertakes
no obligation to release publicly any updates or revisions to any such
forward-looking statements.

Overview

    Marimba is a leading provider of software change management solutions. We
develop, market and support end-to-end change and configuration management
software solutions. Our Desktop/Mobile Management, Server Management and
Embedded Management product families provide an efficient and reliable way for
enterprises to distribute, update and manage applications and related data to
desktops, laptops, servers and devices. Our products help customers reduce their
total cost of ownership and improve quality of service by streamlining the
distribution and management of applications and content.

     In January 1997, we released our first version of the Desktop/Mobile
Management products and since that time have continued to develop and market
that product line and enhance the core Desktop/Mobile Management infrastructure
with additional functionality and complimentary add-on products. In the first
half of 2000, Marimba introduced a new product line called Server Management.
The Server Management products are designed to address many of the server
management challenges inherent in thin client and Web commerce computing
environments today. Additionally, Marimba offers Embedded Management products
that allow device and software vendors to deliver software fixes, new features
and services by embedding Marimba software management capabilities into their
devices or applications. During 2001, revenues from the Desktop/Mobile, Server
and Embedded Management product lines accounted for 76%, 18% and 6% of total
license revenues, respectively. Revenues from the Desktop/Mobile, Server and
Embedded Management products lines accounted for 63%, 19% and 18% of total
license revenues, respectively, during the first quarter of 2002. During the
first quarter of 2001, revenues from our Desktop/Mobile and Server Management
product lines accounted for 76% and 21% of total license revenues, respectively.
During the same period, revenues from our Embedded Management product line
accounted for less than 3% of total license revenues.

    Revenues to date have been derived primarily from the license of our
products and to a lesser extent from support and maintenance, consulting and
training services. Customers who license our products generally purchase
maintenance contracts, typically covering a 12-month period. Additionally,
customers may purchase consulting services, which are customarily billed at a
fixed daily rate plus out-of-pocket expenses. We also offer training services
that are billed on a per student or per class session basis.

    Since inception, we have made substantial investments in sales, marketing
and research and development to expand and enhance our product lines and
increase the market awareness of Marimba and our products. We have incurred
significant losses since inception and had an accumulated deficit of
approximately $45.8 million at March 31, 2002. We believe that our success
depends on further increasing our customer base and on growth in our market
overall. Accordingly, over the long term, we intend to continue to invest
heavily in sales, marketing and research and development.

    In view of the rapidly changing nature of our business and our limited
operating history, we believe that period-to-period comparisons of revenues and
operating results are not necessarily meaningful and should not be relied upon
as

                                       8
<PAGE>

indications of future performance, growth or financial results. Additionally,
we do not believe that historical growth rates or profitability are necessarily
sustainable, nor indicative of future growth or financial results.

Critical Accounting Policies and Estimates

     For our critical accounting policies and estimates, refer to Marimba's
Annual Report on Form 10-K for the year ended December 31, 2001 filed with the
Securities and Exchange Commission on March 28, 2002.

Results of Operations

    The following table sets forth certain statements of operations data as a
percentage of total revenues for the three months ended March 31, 2002 and 2001.
This data has been derived from the unaudited condensed consolidated financial
statements contained in this report which, in the opinion of management include
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position and results of operations for the interim
periods. The operating results for any quarter should not be considered
indicative of results of any future period. This information should be read in
conjunction with the Consolidated Financial Statements and Notes thereto
included in Marimba's Annual Report on Form 10-K for the year ended December 31,
2001.
<TABLE>
<CAPTION>

                                                Three Months
                                                  March 31,
                                                 ---------
                                               2002       2001
                                               ----       ----

<S>                                            <C>         <C>
Consolidated Statement of Operations Data:
Revenues:

  License ................................      49.2%     63.5%
  Service ................................      50.8      36.5
                                               -----     -----
Total revenues ...........................     100.0     100.0
Cost of revenues:
  License ................................       1.6       1.1
  Service ................................      18.1      17.0
                                               -----     -----
Total cost of revenues ...................      19.6      18.1
                                               -----     -----
Gross margin .............................      80.4      81.9
Operating expenses:
  Research and development ...............      25.5      29.6
  Sales and marketing ....................      82.8      80.6
  General and administrative .............      19.4      19.3
  Amortization of deferred compensation ..       6.8       5.4
                                               -----     -----
Total operating expenses .................     134.6     134.9
                                               -----     -----
Loss from operations .....................     (54.2)    (53.0)
Interest income, net .....................       5.4       9.4
                                               -----     -----
Loss before income taxes .................     (48.9)    (43.6)
Provision for income taxes ...............      (0.1)     (0.2)
                                               -----     -----
Net loss .................................     (49.0)%   (43.8)%
                                               =====     =====
</TABLE>

Revenues

    Total revenues decreased $2.9 million or 26.7%, to $8.1 million in the first
quarter of 2002 from $11.0 million in the first quarter of 2001. There were no
customers that accounted for greater than 10% of total revenues in the first
quarter of 2002, whereas three customers accounted for 24%, 12% and 12% of total
revenues in the first quarter of 2001.

    License Revenues. License revenues decreased $3.0 million, or 43.2%, to $4.0
million in the first quarter of 2002 from $7.0 million in the first quarter of
2001. The reduction of license revenues was due to a decrease in product
licenses sold, reflecting the impact of the general economic weakness in the
Unites States, primarily through delays in anticipated customers' IT purchases
and generally longer sales cycles.


                                       9
<PAGE>

     Service Revenues. Service revenues include maintenance and support,
consulting and training. Service revenues in the first quarter of 2002 were $4.1
million, comparable to service revenues of $4.0 million in the first quarter of
2001. As a percentage of total revenues, service revenues increased to 50.8% in
the first quarter of 2002 from 36.5% in the first quarter of 2001. The increase
in service revenues as a percentage of total revenues was due primarily to lower
total lower revenues in the first quarter of 2002.

Costs of Revenues

    Cost of License Revenues. Cost of license revenues consists primarily of the
cost of third-party software products that were either integrated into our
products or resold by Marimba. Cost of license revenues was less than 2% of
total revenues in the first quarter of 2002 and 2001. We expect cost of license
revenues to remain a relatively small percentage of total revenues.

   Cost of Service Revenues. Cost of service revenues decreased to $1.5 million
in the first quarter of 2002 from $1.9 million in the first quarter of 2001,
representing 35.6% and 46.4% of service revenue in each period, respectively.
The decrease in cost of service revenues in the first quarter of 2002 compared
to the first quarter of 2001 was due primarily to operating efficiencies and an
overall decrease in sales.

Operating Expenses

    Research and Development. Research and development ("R&D") expenses
decreased to $2.1 million in the first quarter of 2002 from $3.3 million in the
first quarter of 2001. R&D expenses, as a percentage of total revenues,
decreased to 25.5% in the quarter ended March 31, 2002 from 29.6% in the quarter
ended March 31, 2001. R&D expenses decreased in absolute dollars due primarily
to our decision to focus on Marimba's core change and configuration management
products and the resulting discontinuance of Marimba.net (a managed hosting
service) and closure of our Houston, Texas development facility that had
previously been dedicated to performance management product development.

    Sales and Marketing. Sales and marketing ("S&M") expenses decreased to $6.7
million in the first quarter of 2002 from $8.9 million in the first quarter of
2001. S&M expenses, as a percentage of total revenues, increased to 82.8% in the
quarter ended March 31, 2002 from 80.6% in the quarter ended March 31, 2001. S&M
expenses decreased in absolute dollars due primarily to lower incentive
compensation as a result of lower license revenues and a decrease in travel and
entertainment expenses.

    General and Administrative. General and administrative ("G&A") expenses
decreased to $1.6 million in the first quarter of 2002 from $2.1 million in the
first quarter of 2001. G&A expenses, as a percentage of total revenues,
increased to 19.4% in the quarter ended March 31, 2002 from 19.3% in the quarter
ended March 31, 2001. G&A expenses decreased in absolute dollars due primarily
to lower discretionary spending, as well as a reduction in costs from the prior
comparable period due to the restructuring that took place in April 2001.

    Deferred Compensation. We recorded deferred compensation of approximately
$1.4 million in 1998, representing the difference between the exercise prices of
options granted to acquire 940,500 shares of common stock during 1998 and the
deemed fair value for financial reporting purposes of our common stock on the
grant dates. In addition, we granted options to purchase common stock in April
1999 for which we recorded additional deferred compensation of approximately
$2.0 million. In fiscal year 2000 and 2001, we recorded deferred compensation of
approximately $1.9 million each year, net of reductions of $703,000 and $564,000
during the same periods due to cancelled shares, which represented the intrinsic
value of certain restricted stock awards. Additional deferred compensation of
approximately $309,000 was recorded in February 2002 for certain restricted
stock awards. Deferred compensation is being amortized over the vesting periods
of the options based on a graded vesting method. Amortization of deferred
compensation was $552,000 for the first quarter of 2002 and $592,000 for the
first quarter of 2001.

    Interest Income, Net. Interest income, net, was $432,000 and $1.0 million
for the quarters ended March 31, 2002 and 2001, respectively. The decrease was
due primarily to lower invested cash balances and the decline in interest rates.


                                      10
<PAGE>


Liquidity and Capital Resources

      As of March 31, 2002, our principal sources of liquidity included
approximately $21.8 million of cash and cash equivalents and $21.9 million of
short-term investments in marketable securities. Net cash used in operating
activities for the first quarter of 2002 of $2.0 million primarily reflects our
net loss for the period and a decrease in deferred revenue, partially offset by
a decrease in accounts receivable.

     Net cash used in investing activities was approximately $2.3 million for
the quarter ended March 31, 2002, primarily related to purchases of investments,
partially offset by sales and maturities of investments.

     Net cash used in financing activities was $9,000, which represents the
repurchase of unvested restricted stock upon the termination of an employee.

    Marimba's contractual obligations consist of noncancellable operating lease
agreements. As of March 31, 2002, future minimum lease payments under
noncancellable operating leases are expected to be approximately $6.0 million,
and become due as presented in the table below:

                                              Operating
                                               Leases
                                               ------
                                           (in thousands)

Less than 1 year ............................ $1,875
1 to 3 years ................................  3,922
4 to 5 years ................................    217
                                              ------
     Total minimum lease payments             $6,014
                                              ======

    We currently anticipate that our current cash, cash equivalents and
investments will be sufficient to meet our anticipated cash needs for working
capital and capital expenditures for at least the next 12 months. Thereafter,
cash generated from operations, if any, may not be sufficient to satisfy our
liquidity requirements. We may therefore need to sell additional equity or raise
funds by other means. Any additional financings, if needed, might not be
available on reasonable terms or at all. Failure to raise capital when needed
could seriously harm our business and operating results. If additional funds are
raised through the issuance of equity securities, the percentage of ownership of
our stockholders would be reduced. Furthermore, these equity securities might
have rights, preferences or privileges senior to our common stock.

OTHER FACTORS AFFECTING OPERATING RESULTS, LIQUIDITY AND CAPITAL RESOURCES

     The factors discussed below are cautionary statements that identify
important factors that could cause actual results to differ materially from
those anticipated by the forward-looking statements contained in this report.
For more information regarding the forward-looking statements contained in this
report, see the introductory paragraph to this Item 2 above.

Our Limited Operating History May Prevent Us From Achieving Success in Our
Business

    We were founded in February 1996 and have a limited operating history that
may prevent us from achieving success in our business. The revenues and income
potential of our business and market are unproven. We will encounter challenges
and difficulties frequently encountered by early-stage companies in new and
rapidly evolving markets. We may not successfully address any of these
challenges and the failure to do so would seriously harm our business and
operating results. In addition, because of our limited operating history, we
have limited insight into trends that may emerge and affect our business.

We Have Incurred Losses and May Incur Future Losses

    Our failure to significantly increase our revenues would seriously harm our
business and operating results. There is no assurance that we will reach
sustained profitability. As of March 31, 2002, we had an accumulated deficit of
approximately $45.8 million. We expect over the long term to increase our
research and development, sales and marketing and general and administrative
expenses. As a result, we will need to increase our quarterly revenues to offset


                                       11
<PAGE>


these increasing expenses and return to profitability. We may not be able to
sustain our historical revenue levels. In fact, we may not have any revenue
growth, and our revenues could decline.

Fluctuations in Quarterly Operating Results and Absence of Significant Backlog

    Our quarterly operating results have varied significantly in the past and
will likely vary significantly in the future. As a result, we believe that
period-to-period comparisons of our operating results are not meaningful and
should not be relied upon as indicators of our future performance. In the
future, our operating results may be below the expectations of securities
analysts and investors. Our failure to meet these expectations would likely harm
the market price of our common stock. Operating results vary depending on a
number of factors, many of which are outside our control. Our operating results
may also depend on general economic factors, including an economic slowdown or
recession.

    A substantial portion of our revenues for most quarters has been booked in
the last month of the quarter and the magnitude of quarterly fluctuations in
operating results may not become evident until late in or even at the end of a
particular quarter. As a result, a delay in recognizing revenue, even from just
one account, could have a significant negative impact on our operating results.
In the past, a significant portion of our sales have been realized near the end
of a quarter. A delay in an anticipated sale past the end of a particular
quarter could negatively impact our operating results.

    We generally expect that revenues in the first quarter of each year will not
substantially increase over, and may be lower than, revenues in the fourth
quarter of the preceding year due to the annual nature of companies' purchasing
and budgeting cycles and the year-to-date structure of our sales incentive
program.

    Our expense levels are relatively fixed for a particular quarter and are
based, in part, on expectations as to future revenues. As a result, if revenue
levels fall below our expectations for a particular quarter, our operating
results will be adversely affected because only a small portion of our expenses
vary with our revenues. We have historically operated with little product
backlog, because our products are generally delivered as orders are received. As
a result, revenue in any quarter will depend on the volume and timing, and our
ability to fill, orders received in that quarter.

We Expect Significant Long-Term Increases in Our Operating Expenses

    Despite recent cost cutting measures implemented by Marimba, we intend over
the long term to substantially increase our operating expenses as we:

     o Increase our sales and marketing activities, including expanding our
       direct sales force;

     o Increase our research and development activities;

     o Expand our customer support and professional services organizations; and

     o Expand our distribution channels.

    With these additional expenses, we must significantly increase our revenues
in order to achieve and sustain profitability. These expenses will be incurred
before we generate any revenues associated with this increased spending. If we
do not significantly increase revenues from these efforts, our business and
operating results would be adversely affected.

Our Success Depends on our Desktop/Mobile Management Product Family

    We expect to continue to derive a substantial portion of our revenues from
our Desktop/Mobile Management product line and related services. A decline in
the price of our Desktop/Mobile Management products or our inability to increase
sales of these products would seriously harm our business and operating results.
We cannot predict the success of our Desktop/Mobile Management products. We
periodically update our Desktop/Mobile Management products to make improvements
and provide additional enhancements. New versions of this product line may not
provide the benefits we expect and could fail to meet customers' requirements or
achieve widespread market acceptance.


                                       12
<PAGE>


    Our strategy requires our Desktop/Mobile Management products to be highly
scalable -- in other words, able to rapidly increase deployment size from a
limited number of end-users to a very large number of end-users. If we are
unable to achieve this level of scalability, the attractiveness of our products
and services would be diminished.

We Need to Grow Our Server Management and Embedded Management Product Revenues
and Develop New Products and Services

     During 2001, revenues from our Server and Embedded Management product lines
accounted for 18% and 6% of total license revenues, respectively. Revenues from
our Server and Embedded Management product lines accounted for 19% and 18% of
total license revenues, respectively, during the first quarter of 2002. During
the first quarter of 2001, revenues from our Server and Embedded Management
product lines accounted for 21% and less than 3% of total license revenues,
respectively. There can be no assurance that the revenues from each of these
product lines will grow, in absolute amount or as a percentage of total license
revenues, or that our Server Management products and Embedded Management
products will meet customer expectations or gain widespread market acceptance.
To provide comprehensive systems management solutions, we will need to develop
and introduce new products and services which offer functionality that we do not
currently provide. We may not be able to develop these technologies, and
therefore, we may not be able to offer a comprehensive systems management
solution. In addition, in the past we have experienced delays in new product
releases, and we may experience similar delays in the future. If we fail to
release new product on a timely basis, our business and operating results could
be seriously harmed.

We Depend on the Growth of Our Customer Base and Increased Business from Our
Current Customers

    Our success is substantially dependent on the continued growth of our
customer base. If we fail to increase our customer base, our business and
operating results would be seriously harmed. Our ability to attract new
customers will depend on a variety of factors, including the reliability,
security, scalability and cost-effectiveness of our products and services, as
well as our ability to effectively market our products and services.

    If we fail to generate repeat and expanded business from our current
customers, our business and operating results would be seriously harmed. Many of
our customers initially make a limited purchase of our products and services for
pilot programs. These customers may not choose to purchase additional licenses
to expand their use of our products. In addition, as we deploy new versions of
our products or introduce new products, our current customers may not require
the functionality provided by our new products and may not ultimately license
these products.

    Because the total amount of maintenance and support fees we receive in any
period depends in large part on the size and number of licenses that we have
previously sold, any downturn in our software license revenues would negatively
impact our future service revenues. Our support and maintenance programs are
sold on an annual basis. Renewal of annual support and maintenance is generally
at the customer's election. If customers elect not to renew their support and
maintenance agreements, our services revenues could be significantly adversely
impacted. If support and maintenance revenues were to decline, or not grow as
rapidly as expected, Marimba would need to increase its license revenues and
other service revenues in order to make up for the decline in support and
maintenance revenues.

Implementation of Our Products by Large Customers May Be Complex and Customers
Could Become Dissatisfied if Implementation of Our Products Proves Difficult,
Costly or Time Consuming

    Our products must integrate with many existing computer systems and software
programs used by our customers. Integrating with many other computer systems and
software programs can be complex, time consuming and expensive and can cause
delays in the deployment of our products for such customers. Customers could
become dissatisfied with our products if implementations prove to be difficult,
costly or time consuming, and this could negatively impact our ability to sell
our products.

We Must Retain and Attract Key Personnel

    Our success depends largely on the skills, experience and performance of the
members of our senior management and other key personnel, including our
President and Chief Executive Officer, Richard Wyckoff, our Vice President,
Finance and Chief Financial Officer, Mark Garrett, and our Vice President of
Worldwide Sales, Matt Thompson. We have in the past lost senior management
personnel. Several members of our senior management are relatively new to
Marimba, including Messrs. Wyckoff, Garrett and Thompson, and our success will
depend in part on the successful assimilation and performance of these
individuals.


                                       13
<PAGE>


    We may not be successful in attracting qualified senior management personnel
or be able to attract, assimilate and retain other key personnel in the future.
None of our senior management or other key personnel is bound by an employment
agreement. If we lose additional key employees and are unable to replace them
with qualified individuals, our business and operating results could be
seriously harmed. In addition, our future success will depend largely on our
ability to continue attracting and retaining highly skilled personnel. Like
other companies in the software industry, we face intense competition for
qualified personnel.

We Have a Long Sales Cycle that Depend upon Factors Outside Our Control

    A customer's decision to license our products typically involves a
significant commitment of resources and is influenced by the customer's budget
cycles and internal approval procedures for IT purchases. In addition, selling
our products requires us to educate potential customers on our product's use and
benefits. As a result, our products have a long sales cycle which can take over
six months. We face difficulty predicting the quarter in which sales to expected
customers may occur. The sale of our products is also subject to delays from the
lengthy budgeting, approval and competitive evaluation processes of our
customers that typically accompany significant capital expenditures. For
example, customers frequently begin by evaluating our products on a limited
basis and devote time and resources to test our products before they decide
whether to purchase a license for deployment. Customers may also defer orders as
a result of anticipated releases of new products or enhancements by us or our
competitors.

We Are Exposed to General Economic Conditions and Reductions in Corporate IT
Spending, and the Current Economic Downturn May Continue to Adversely Impact Our
Business

    Our business is subject to the effects of general economic conditions and,
in particular, market conditions in the industries that we serve. We believe
that our operating results are being adversely impacted by recent unfavorable
general economic conditions and reductions in corporate IT spending. Finally,
since many of our customers may be suffering adverse effects of the general
economic slowdown, we may find that collecting accounts receivable from existing
or new customers will take longer than we expect or that some accounts
receivable will become uncollectable. If these economic conditions do not
improve, or if we experience a worsening in general economic conditions or
corporate IT spending, our business and operating results could continue to be
adversely impacted.

Our Markets Are Highly Competitive

    Our markets are highly competitive, and we expect this competition to
persist and intensify in the future. Our failure to maintain and enhance our
competitive position could seriously harm our business and operating results. We
encounter competition from a number of sources, including:

     o Sellers of enterprise-wide management systems, which include electronic
       software distribution;

     o Companies that market products that support the distribution of software
       applications and content; and

     o Desktop software management products.

    In addition, we compete with various methods of software distribution
(including thin client systems and web browsers) and with application server
vendors and others that have introduced software distribution capabilities into
their products.

    Potential competitors may bundle their products or incorporate additional
components into existing products in a manner that discourages users from
purchasing our products. Furthermore, new competitors or alliances among
competitors may emerge and rapidly acquire significant market share. Our
competitors may be able to respond more quickly to new or emerging technologies
and changes in customer requirements than we can.

    Most of our competitors have longer operating histories and significantly
greater financial, technical, marketing and other resources than we do. Many of
these companies have more extensive customer bases and broader customer
relationships that they could leverage, including relationships with many of our
current and potential customers. These companies also have significantly more
established customer support and professional service organizations than we do.
In addition, these companies may adopt aggressive pricing policies which we are
unable to match. In the past, we have lost potential customers to competitors
for various reasons, including lower prices.

                                       14
<PAGE>


Protection of Our Intellectual Property Is Limited

    We rely on a combination of patent, trademark, trade secret and copyright
law and contractual restrictions to protect the proprietary aspects of our
technology. These legal protections afford only limited protection. Despite our
efforts to protect our proprietary rights, unauthorized parties may attempt to
copy aspects of our products or to obtain and use our proprietary information.
Litigation may be necessary to enforce our intellectual property rights, to
protect our trade secrets and to determine the validity and scope of the
proprietary rights of others. Such litigation could result in substantial costs
and diversion of resources and could significantly harm our business and
operating results. In addition, we sell our products internationally, and the
laws of many countries do not protect our proprietary rights as well as the laws
of the United States.

We Are Involved in Patent Infringement Litigation and May Be Found to Infringe
Proprietary Rights of Others

     We are a defendant in the patent infringement litigation described in Part
II, Item 1 - "Legal Proceedings" of this report. We intend to defend this
litigation vigorously. However, due to the inherent uncertainties of litigation,
we cannot accurately predict the ultimate outcome of the litigation,
particularly in cases such as this where sophisticated factual issues must be
assessed and complex technical issues must be decided. Our defense of this
litigation, regardless of the merits of the complaint, has been, and will likely
continue to be, time-consuming, costly and a diversion for Marimba's technical
and management personnel. Any unfavorable outcome of this litigation could have
an adverse impact on our business, financial condition and results of
operations.

     Other companies, including our competitors, may obtain patents or other
proprietary rights that could prevent, limit or interfere with our ability to
make, use or sell our products. As a result, we may be found to infringe the
proprietary rights of others. Furthermore, companies in the software market are
increasingly bringing suits alleging infringement of their proprietary rights,
particularly patent rights.

    We could incur substantial costs to defend any intellectual property
litigation (including the one described above), and intellectual property
litigation could result in one or more of the following:

     o   Our paying monetary damages, which could be tripled if the infringement
         is found to have been willful;

     o   The issuance of a preliminary or permanent injunction requiring us to
         stop selling one or more of our products in their current forms;

     o   Our having to redesign one or more of our products, which could be
         costly and time-consuming and could substantially delay shipments,
         assuming that a redesign is feasible;

     o   Our having to reimburse the holder of the infringed intellectual
         property for some or all of its attorneys' fees and costs;

     o   Our having to obtain from the holder licenses to its intellectual
         property, which licenses might not be made available to us on
         reasonable terms; or

     o   Our having to indemnify our customers against any losses they may incur
         due to the alleged infringement.

    In the event of a successful claim of infringement against us and our
failure or inability to license the infringed technology, our business and
operating results would be significantly harmed.

We Are Involved in a Securities Class Action Litigation and Are At Risk of
Additional Similar Litigation

    We are a party to the securities class action litigation described in Part
II, Item 1 - "Legal Proceedings" of this report. The defense of this litigation
may increase our expenses and divert our management's attention and resources,
and an adverse outcome in this litigation could seriously harm our business and
results of operations. In addition, we may in the future be the target of other
securities class action or similar litigation.


                                       15
<PAGE>

We Need to Develop Third-Party Distribution Relationships

    We have a limited number of distribution relationships and we may not be
able to increase our number of distribution relationships or maintain our
existing relationships. Our current agreements with our distribution partners
typically do not prevent these companies from selling products of other
companies, including products that may compete with our products, and do not
generally require these companies to purchase minimum quantities of our
products. These distributors could give higher priority to the products of other
companies or to their own products, than they give to our products. In addition,
sales through these channels generally result in lower fees to Marimba than
direct sales. As a result, while the loss of, or significant reduction in, sales
volume to any of our current or future distribution partners could seriously
harm our revenues and operating results, a significant increase in sales through
these channels could also negatively impact our gross margins.

We Need to Develop and Expand Our Sales and Marketing Capabilities

    We need to expand our direct sales and marketing efforts in order to
increase market awareness of our products, market our products to a greater
number of enterprises and generate increased revenues. Our products and services
require a sophisticated sales effort targeted at senior management of our
prospective customers. New hires require extensive training and typically take
at least six months to achieve full productivity. There is no assurance that new
sales representatives will ultimately become productive. In prior quarters,
Marimba's license revenues have often resulted from contracts closed by just a
few sales representatives. If Marimba were to lose qualified and productive
sales personnel, our revenues could be adversely impacted. Furthermore, the cost
of hiring and training replacement sales personnel could be significant.

We Need to Expand Our Professional Services

    We may not be able to attract, train or retain the number of highly
qualified services personnel that our business needs. We believe that growth in
our product sales depends on our ability to provide our customers with
professional services and to educate third-party resellers and consultants on
how to provide similar services. Over the long term, we plan to increase the
number of our services personnel to meet these needs. However, competition for
qualified services personnel is intense.

    Over the long term, we expect our total service revenues to increase as we
continue to provide support, consulting and training services that complement
our products and as our installed customer base grows. This could negatively
impact our gross margin because margins on revenues derived from services are
generally lower than gross margins on revenues derived from the license of our
products.

Expanding Internationally Is Expensive, We May Receive No Benefit From Our
Expansion and Our International Operations Are Subject To Governmental
Regulation

    We plan to increase our international sales force and operations, and
expanding internationally is expensive. However, we may not be successful in
increasing our international sales force or sales revenue. In addition, our
international business activities are subject to a variety of risks, including
the adoption of or changes in laws, currency fluctuations, actions by third
parties and political and economic conditions that could restrict or eliminate
our ability to do business in foreign jurisdictions. To date, we have not
adopted a hedging program to protect us from risks associated with foreign
currency fluctuations.

    Export clearances, and in some cases, import clearances must be obtained
before our products can be distributed internationally. Current or new
government laws and regulations, or the application of existing laws and
regulations, could expose us to significant liabilities, significantly slow our
growth and seriously harm our business and operating results.

We Must Manage Our Growth and Expansion

    Our historical growth has placed, and any further growth is likely to
continue to place, a significant strain on our resources. Any failure to manage
growth effectively could seriously harm our business and operating results. To
be successful, we will need to implement additional management information
systems, improve our operating, administrative, financial and accounting systems
and controls, train new employees and maintain close coordination

                                       16
<PAGE>

among our executive, engineering, finance, legal, marketing, sales and
operations organizations. In addition, our growth has resulted, and any future
growth will result, in increased responsibilities for management personnel.

We Rely on Third-Party Software and Applications

    We integrate third-party software and digital certificates as a component of
our software. There are inherent limitations in the use and capabilities of much
of the technology that we license from third parties. As a result, we face a
number of challenges in integrating these technologies into our products. We
would be seriously harmed if the providers from whom we license software ceased
to deliver and support reliable products, enhance their current products or
respond to emerging industry standards. In addition, the third-party software
may not continue to be available to us on commercially reasonable terms or at
all. The loss of, or inability to maintain or obtain this software, could result
in shipment delays or reductions. Furthermore, we might be forced to limit the
features available in our current or future product offerings. Either
alternative could seriously harm our business and operating results.

    Almost all of our products are written in Java and require a Java virtual
machine in order to operate. Vendors offering these Java virtual machines may
not continue to make these implementations of the Java virtual machines
available at commercially reasonable terms or at all. Furthermore, if Sun
Microsystems, Inc. were to make significant changes to the Java language, if
significant changes were to be made to Java virtual machine implementations of
Sun Microsystems, Inc. and other vendors or if they fail to correct defects and
limitations in these products, our ability to continue to improve and ship our
products could be impaired. In the future, our customers may also require the
ability to deploy our products on platforms for which technically acceptable
Java implementations either do not exist or are not available on commercially
reasonable terms. Our customers may also use particular implementations of the
Java virtual machines that may not be technically or commercially acceptable for
integration into our products.

Software Defects in Our Products Would Harm Our Business

    Complex software products like ours often contain errors or defects,
including errors relating to security, particularly when first introduced or
when new versions or enhancements are released. Our products extensively utilize
digital certificates and other complex technology. Our use of this technology
has in the past and may in the future result in product behavior problems which
may not be anticipated by us or our customers. Defects or errors in current or
future products could result in lost revenues or a delay in market acceptance,
which would seriously harm our business and operating results.

    Since many of our customers use our products for business-critical
applications, errors, defects or other performance problems could result in
financial or other damage to our customers and could significantly impair their
operations. Our customers could seek damages for losses related to any of these
issues. A product liability claim brought against us, even if not successful,
would likely be time consuming and costly to defend and could adversely affect
our marketing efforts.

Our Stock Price Is Likely To Continue to be Volatile

    The market price of our common stock has been and is likely to continue to
be highly volatile. The market price of our common stock may be significantly
affected by factors such as actual or anticipated fluctuations in our operating
results, announcements of technological innovations, new products or new
contracts by us or our competitors, developments with respect to patents or
proprietary rights and related litigation, other material litigation involving
Marimba, changes in our management or other key employees, adoption of new
accounting standards affecting the software industry, general market conditions
and other factors. In addition, the stock market has from time to time
experienced significant price and volume fluctuations that have particularly
affected the market price for the common stock of technology companies. These
types of broad market fluctuations may adversely affect the market price of our
common stock.

Our Future Capital Needs Are Uncertain

    We expect that our current cash, cash equivalents and investments will be
sufficient to meet our working capital and capital expenditure needs for at
least twelve months. After that, we may need to raise additional funds, and
additional financing may not be available on favorable terms, if at all. This
could seriously harm our business and operating results. Furthermore, if we
issue additional equity securities, stockholders may experience dilution, and
the new equity securities could have rights senior to those of existing holders
of our common stock. If we cannot raise funds, if needed,

                                       17
<PAGE>

on acceptable terms, we may not be able to develop or enhance our products, take
advantage of future opportunities or respond to competitive pressures or
unanticipated requirements.

We Have Experienced Recent Credit-Related Issues with Certain of Our Customers
and We May Not Achieve Anticipated Revenue if We Need to Defer a Significant
Amount of Revenue

         We have experienced recent credit-related issues with certain of our
existing and proposed customers, primarily due to the economic slowdown in the
United States. Certain of these customers are in the process of obtaining
funding, and in certain cases, we have deferred a portion or all of the revenues
from these customers until they have achieved adequate levels of financing and
are able to pay us. Should we have more customers than we anticipate with
liquidity issues, or if payment is not received on a timely basis, our business,
operating results and general financial condition could be seriously harmed.

We Face Challenges Stemming from Our Emerging Markets

    The market for certain of our products has only recently begun to develop,
is rapidly evolving and will likely have an increasing number of competitors. We
cannot be certain that a viable market for these products will emerge or be
sustainable. If this market fails to develop, or develops more slowly than
expected, our business and operating results would be seriously harmed.

    Furthermore, in order to be successful in this emerging market, we must be
able to differentiate Marimba from our competitors through our product and
service offerings and brand name recognition. We may not be successful in
differentiating Marimba or achieving widespread market acceptance of our
products and services. In addition, enterprises that have already invested
substantial resources in other methods of deploying and managing their
applications, content and/or services may be reluctant or slow to adopt a new
approach that may replace, limit or compete with their existing systems.

We Must Respond to Rapid Technological Change and Evolving Industry Standards

    The markets for our software change and configuration management solutions
are characterized by rapid technological change, frequent new product
introductions and enhancements, uncertain product life cycles, changes in
customer demands and evolving industry standards. New solutions based on new
technologies or new industry standards can quickly render existing solutions
obsolete and unmarketable. Any delays in our ability to develop and release
enhanced or new solutions could seriously harm our business and operating
results. Our technology is complex, and new products, enhancements and services
can require long development and testing periods. Our failure to conform to
prevailing standards could have a negative effect on our business and operating
results.

We Face Risks Associated with Potential Acquisitions

      We may make acquisitions in the future. Acquisitions of companies,
products or technologies entail numerous risks, including an inability to
successfully assimilate acquired operations and products, diversion of
management's attention, loss of key employees of acquired companies and
substantial transaction costs. Some of the products acquired may require
significant additional development before they can be marketed and may not
generate revenue at anticipated levels. Moreover, future acquisitions by us may
result in dilutive issuances of equity securities, the incurrence of additional
debt, large one-time write-offs and the creation of goodwill or other intangible
assets that could result in significant impairment charges or amortization
expense. Any of these problems or factors could seriously harm our business,
financial condition and operating results.


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ITEM 3.   QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity

    Our interest income is sensitive to changes in the general level of U.S.
interest rates, particularly since the majority of our investments are in
short-term instruments.

    Our investment policy requires us to invest funds in excess of current
operating requirements in:

     o obligations of the U.S. government and its agencies;

     o investment grade state and local government obligations;

     o securities of U.S. corporations rated A1 or AA by Standard and Poors or
       the Moody's equivalent; and

     o money market funds, deposits or notes issued or guaranteed by U.S. and
       non-U.S. commercial banks meeting particular credit rating and net worth
       requirements with maturities of less than two years.


Exchange Rate Sensitivity

    We develop products in the United States, and sell our products and services
primarily in North America, Europe and Asia. As a result, our financial results
could be affected by various factors, including changes in foreign currency
exchange rates or weak economic conditions in foreign markets. A portion of our
sales are currently transacted in British Pounds and Euros, thereby potentially
affecting our financial position, results of operations and cash flows due to
fluctuation in exchange rates. Near-term changes in exchange rates may have a
material impact on our future revenues, earnings, fair values or cash flows. We
have not engaged in foreign currency hedging transactions during the quarter
ended March 31, 2002. There can be no assurance that a sudden and significant
decline in the value of the British Pound or Euro would not seriously harm our
financial condition and results of operations.



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PART II.      OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS.

Securities Litigation

     Beginning in April 2001, a number of substantially identical class action
complaints alleging violations of the federal securities laws were filed in the
United States District Court for the Southern District of New York naming as
defendants Marimba, Inc., certain of its officers and directors, and certain
underwriters of the company's initial public offering (Morgan Stanley & Co.,
Inc., Credit Suisse First Boston Corp. and Bear Stearns & Co., Inc.). The
complaints have since been consolidated into a single action, and a consolidated
amended complaint was filed on April 24, 2002. The complaints allege, among
other things, that the underwriters of our initial public offering violated the
securities laws by failing to disclose certain alleged compensation arrangements
(such as undisclosed commissions or stock stabilization practices) in the
offering's registration statement and by engaging in manipulative practices to
artificially inflate the price of Marimba's stock in the aftermarket subsequent
to the initial public offering. Marimba and certain of its officers and
directors are named in the complaints pursuant to Section 11 of the Securities
Act of 1933, and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of
1934. The complaint seeks unspecified damages. Similar complaints have been
filed against over 300 other issuers that have had initial public offerings
since 1998 and all such actions have been included in a single coordinated
proceeding. Marimba intends to defend these actions vigorously. However, due to
the inherent uncertainties of litigation, we cannot accurately predict the
ultimate outcome of the litigation. Any unfavorable outcome of this litigation
could have an adverse impact on our business, liquidity, financial condition and
results of operations.

Beck Systems, Inc. vs. Marimba, Inc.

     On July 6, 2001, Beck Systems, Inc. filed a complaint against Marimba, Inc.
and two of its customers in the United States District Court for the Northern
District of Illinois (Beck Systems, Inc. v. Marimba, Inc. et al., Civil Action
No. 01 C 5207), alleging infringement of two patents held by Beck Systems. Beck
Systems alleges that Marimba's infringement relates to the manufacture and
marketing of Marimba's desktop/mobile management and server management products.
On August 29, 2001, Marimba filed its answer to Beck Systems' complaint, denying
any liability to Beck Systems, asserting various affirmative defenses, and
seeking the court's determination that the patents in suit are not infringed,
are invalid, and/or are unenforceable. Marimba further requested the court for
an award of attorneys' fees, costs and expenses. On April 2, 2002, Beck Systems
filed a second amended complaint in the same action alleging infringement of one
additional patent by the same Marimba products. The parties are currently
engaged in discovery for this suit, and a trial date has not been set. Marimba
intends to defend this suit vigorously. However, due to the inherent
uncertainties of litigation, we cannot accurately predict the ultimate outcome
of the litigation, particularly in cases such as this where sophisticated
factual issues must be assessed and complex technical issues must be decided.
Any unfavorable outcome of this litigation could have an adverse impact on our
business, liquidity, financial condition and results of operations.

ITEM 2.       CHANGES IN SECURITIES.

    None.

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES.

    None.

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

    None.


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ITEM 5.       OTHER INFORMATION.

      Effective January 29, 2002, Kenneth W. Owyang resigned as Vice President,
Finance and Chief Financial Officer of Marimba.

      Effective January 29, 2002, Mark S. Garrett was appointed as Vice
President, Finance and Chief Financial Officer of Marimba.

     Effective February 4, 2002, Anthony Zingale was appointed as a director of
Marimba.


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K.

        (a)      Exhibits.

                 None.

        (b)      Reports on Form 8-K.

                 None.



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                                 MARIMBA, INC.

                                   SIGNATURE

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.

                            MARIMBA, INC.


Date:   May 1, 2002    By:  /s/ Mark S. Garrett
                            --------------------
                            Mark S. Garrett
                            Vice President, Finance and Chief Financial Officer
                            (Principal Financial and Accounting Officer)


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