Yahoo! Inc. (NASDAQ:YHOO) released its first quarter earnings report after closing bell tonight, posting adjusted earnings of 8 cents per share and revenue of $1.09 billion. Analysts had been expecting earnings of 7 cents per share and $1.08 billion in revenue. In last year’s first quarter, The search giant reported earnings of 15 cents per share and revenue of $1.23 billion.

Yahoo! Inc. Shares Edge Higher After Earnings Beat

Yahoo’s revenues decline

Yahoo said traffic acquisition costs rose from $183 million in the year-ago quarter to $228 million. GAAP losses were 10 cents per share, while adjusted EBITDA was $147 million. Mavens revenue rose from $365 million last year to $390 million in this year’s first quarter, while non-Mavens revenue fell from $742 million to $644 million.

Mobile revenue improved from $234 million last year to $260 million this year, while desktop revenue declined from $873 million to $774 million. Mobile made up 21% of traffic-driven revenue in last year’s first quarter and 25% in this year’s first quarter. Gross search revenue declined 15% year over year to $820 million, while display revenue declined 1% to $463 million.

The search giant had $7.1 billion in cash, cash equivalents and marketable securities as of the end of the quarter, compared with $6.8 billion at the end of March 2015.

“We delivered financial results at the high end or above our guidance ranges,” said Yahoo Chief Financial Officer Ken Goldman in a statement. “We also achieved free cash flow of $297 million through improved working capital efficiencies, excellent cost controls, reduced capital expenditures and a large tax refund. While we remain focused on the strategic alternatives process as a top priority, our employees showed their determination and commitment to Yahoo by executing on our operating plan.”

Still considering strategic alternatives

Yahoo also said tonight that it continues to explore strategic reviews. It shelved plans to spin off its Alibaba stake earlier this year. Meanwhile Starboard Value is seeking to replace the company’s full slate of directors.

Shares of Yahoo edged higher by 0.74% to $36.60 in after-hours trades following tonight’s earnings report.