Prospectus Summary
You should read this summary together with the more detailed information regarding Digital Insight and the common stock being sold in this offering and the financial statements and related notes appearing elsewhere in this prospectus. All names and trademarks of third parties appearing in this prospectus are the property of their respective holders.
We are the leading provider of Internet banking services to banks, credit unions, and savings and loans, based on the number of financial institutions and Internet banking end users we serve. We offer these financial institutions cost-effective outsourced solutions, branded in their name, which include Internet banking for their retail and commercial customers, a target marketing program and data mining service to enable them to effectively sell additional financial services to end users, and customized e-commerce portal web site design and implementation services. We provide our solutions to our customers over the Internet, from facilities hosted by us, which requires minimal software installation at the customer site. This means of providing services is commonly referred to as the application service provider, or ASP, model. As of March 31, 2000, we had contracted with over 880 financial institution customers. These customers had over 18.5 million potential end users. As of June 30, 2000, over 1 million end users were actively using our Internet banking application.
We provide financial institutions with comprehensive Internet solutions that can be installed rapidly with a high degree of customization. Our solutions are designed to be readily expandable, or scalable, as the number of users grows. Our solutions also offer high levels of up-time availability and system redundancy. We work closely with leading data processing vendors so that our financial institution customers can leverage their investments in existing data processing systems by fully integrating them with an Internet solution.
We earn revenues from implementation fees that our financial institution customers pay us for establishing their Internet banking services, and recurring service fees based on end user adoption and usage, as well as web site hosting and maintenance and other monthly services. During the year ended December 31, 1999, and the three months ended March 31, 2000, approximately 64.4% and 70.5% of our revenues came from recurring fees.
We intend to leverage our leading market position to continue to increase the number of financial institutions using our products and services, and to increase the adoption of our solution by end users within those institutions. We are also continuing to develop interfaces with data processing vendors in order to serve as many financial institutions as possible. Finally, by broadening our product and service offerings, we intend to create the potential for new e-commerce revenues for Digital Insight and our customers.
We were incorporated in Delaware on March 18, 1997, and are the successor to Digital Insight LLC, a Minnesota limited liability company established in 1995. In February 2000, we completed our merger with nFront, Inc., which was accounted for as a pooling of interests. Accordingly, our financial statements for all prior periods have been restated to give effect to this merger. Our principal executive offices are located at 26025 Mureau Road, Calabasas, California 91302, and our telephone number is (818) 871-0000.
Recent Developments
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 solutions that allow credit unions, banks and other financial institutions to outsource certain customer communication and other administrative functions associated with consumer loan originations. Upon the closing of the transaction, we will issue approximately 2.1 million shares of our 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 acquisition is to be accounted for using the purchase method of accounting and will be consummated upon receipt of necessary regulatory and shareholder approvals, which are anticipated to be obtained in the third quarter of 2000.
On June 21, 2000, we completed our acquisition of 1View Network Corporation, a company based in San Francisco, California that provides electronic information aggregation and electronic bill presentment and payment solutions for the financial services market. In the acquisition, we paid $5 million in cash and issued 1.1 million shares of our common stock and shares underlying options to purchase common stock in exchange for all of the outstanding shares and options of 1View Network. The acquisition is to be accounted for using the purchase method of accounting. If 1View Network does not meet certain performance objectives by September 30, 2000, the former majority shareholder of 1View Network has agreed to return to us $3 million in cash and 178,112 shares of our common stock.