The company reported a net loss of $99 million in the first quarter, compared with a $21 million profit a year earlier.
Revenues slumped to $1.09 billion compared to $1.23 billion in same period a year earlier.
Yahoo chief financial officer Ken Goldman said the results were "at the high end or above our guidance ranges," and that company continued to look at "the strategic alternatives process as a top priority."
The firm offered no specifics, saying its board committee and legal advisors had talks "with interested strategic and financial parties."
Yahoo shares rose 1.4 percent to $36.84 in after-hours trade following the release.
"While slightly better than expectations, Yahoo's results point to a gradual decline in most financial indicators over time and against key competitors," said Warwick Business School's Sotirios Paroutis, who has studied Yahoo.
"What parts of the business will be sold to whom and at what price are the next strategic decisions for Yahoo's management."
Chances for Verizon Communications have climbed as Google parent Alphabet, Time Inc. and US broadcasting and cable television group Comcast all decided against making an offer, the Wall Street Journal said, citing unnamed sources, just before a reported deadline for submissions passed on Monday.
Bloomberg News, also citing unnamed sources, said Verizon is now vying for Yahoo's core business against at least two other bidders: TPG, a private equity firm, and YP Holdings, the online advertising business of what was previously called Yellowpages.com.
Daily Mail and General Trust, the parent group behind British tabloid Daily Mail, revealed last week that it was in talks with "a number of parties" over a potential bid for Yahoo, but it is unclear whether the negotiations resulted in an offer.
Although Mayer declined to reveal who was in the bidding for Yahoo and what offers, if any, had been made, she did say during an earnings call with analysts that management takes part in daily calls or meetings with the review committee or its consultants.
"We are moving expeditiously," she said.
Meanwhile, workers inside Yahoo are pursuing a plan to revive the company despite the "external noise," Mayer said.
Yahoo has been working to separate its core business from its valuable stake in Chinese Internet colossus Alibaba, and any deal is likely to be only for the declining "core" operations.
Although Yahoo is one of the best-known names on the Internet, used by around a billion people, it has fallen behind Google in web searches and been steadily losing ground in online advertising.
In February, Yahoo said it was cutting 15 percent of its workforce and narrowing its focus as it explored "strategic alternatives."
Mayer has simultaneously been working to revive growth and made priorities of what she refers to as "Mavens" mobile, video, native advertising and social media.
Revenue from Mavens was on track to top the company's $1.8 billion forecast for this year, Yahoo said.
Mayer's loyalists maintain that Mavens are a hidden success story at Yahoo, blossoming while the company's legacy business withers.
But some shareholders are impatient, and one activist investment group has launched a bid to gain control of Yahoo's board, calling the transformation efforts a failure.
Industry tracker eMarketer forecast that digital ad revenue this year at Yahoo will fall nearly 14 percent to $2.83 billion while money raked in by Silicon Valley rivals Google and Facebook will rise.