The firm's total revenue fell 11.3 per cent to $1.09bn (£757m) in the three months ended 31 March, slightly beating analysts' expectations for $1.08bn.
After deducting fees it paid to partner websites, Yahoo's revenue fell to $859.4m from $1.04bn during this period.
The company's shares rose nearly one per cent to $36.66 in extended trading today.
"Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth," Marissa Mayer, chief executive of Yahoo, said.
"In tandem, we made substantial progress towards potential strategic alternatives for Yahoo. Our board, our management team, and I are completely aligned on this top priority for shareholders."
However, Yahoo swung to a net loss of $99.2m, or 10 cents per share, in the first quarter. This compares to a profit of $21.2m, or two cents per share, in the same period last year.
Mayer has been fighting to turnaround the struggling firm's fortunes since taking the reins in 2012. However, she's so far failed to achieve this, and the company is mulling buyout bids following last year's collapse of plans for a tax-free spin-off of its massive Alibaba stake.
The first round of bids for interested parties closed yesterday, reports suggest. Verizon Communications is reportedly the hottest contender, while the Daily Mail is the latest firm to throw its hat in the ring.
Read more: Hedge fund wants to overhaul Yahoo's board
Private equity funds Bain and TPG are also planning bids, Bloomberg has reported, while Google and Time Inc are considering.
Last month, one of Yahoo's investors, Starboard Value LP, nominated nine directors to overhaul its board.
In a letter to shareholders, the hedge fund said the current board had “failed to deliver results” and significant board changes were needed to “hold management accountable”.