Marissa Mayer has put an end to a prolonged slump in Yahoo revenue.
Fourth-quarter revenue rose 2% to $1.35 billion, Yahoo's first full-year revenue increase in three years.
It was the first full quarter under new Chief Executive Mayer, who joined the tech giant from Google in mid-July. Mayer has sparked hopes that she can turn around the beleaguered company.
The company's fourth-quarter net income declined 8% to $272 million, or 23 cents a share. The earnings would have been higher if not for one-time accounting charges.
"I am pleased with our results and our progress," Mayer said during a conference call with analysts.
She said the company is focused on growth but also on profitability.
The fourth-quarter results topped Wall Street expectations. Shares rose 2% to $20.75 in after-hours trading.
Cantor Fitzgerald analyst Youssef Squali said the results were "generally in line with muted expectations."