Yahoo Inc. met expectations when it reported first-quarter earnings Tuesday, but investors and analysts focused more on discussion of the company's potential sale than its dwindling finances.
One day after bids closed for the struggling Internet company and its assets, Chief Executive Marissa Mayer said in Yahoo's earnings call that the Sunnyvale firm has made "substantial progress towards potential strategic alternatives."
Facing mounting criticism from investors who say she has dragged her feet in selling the company, Mayer directly addressed Yahoo's search for a buyer.
"Given the obvious interest of our shareholder base, I want to be very clear addressing some misconceptions: Let me be unequivocally clear," Mayer said, "our board, management and I have made it our top priority."
She said Yahoo's management has been in "daily calls and meetings, often several a day" with the company's strategic committee — a team assembled to explore sale opportunities.
Mayer said she has met with potential buyers to answer their questions, though she did not identify which companies have expressed interest. Verizon is said to be the front-runner among potential buyers, ahead of companies such as YP Holdings, better known as the Yellow Pages, and private equity firms Bain and TPG.
But on the call, Mayer refused to completely abandon her turnaround plan, which involves cutting costs and improving Yahoo's advertising business.
The company reported $1.08 billion in revenue in the first quarter of 2016, down from $1.22 billion the previous year. It reported a net loss of $99 million.
Revenue from its mobile and native advertising business, which it refers to as "mavens," grew 6.8% to $390 million, but its non-mavens revenue fell 9.1% to $644 million. Its total Web-traffic-driven revenue also fell. Revenue from desktop dropped by nearly $100 million.
A potential sale of the company isn't the only thing that loomed over the company's earnings call.
Activist investor Starboard Value launched a proxy fight in March to remove Yahoo's entire board of directors. The hedge fund nominated a slate of nine new directors, on which shareholders will vote at the company's 2016 annual meeting.
"It's atypical for these kinds of situations — where you get an entirely new slate of directors — to work out," said Scott Kessler, equity analyst at S&P Global Market Intelligence. "But guess what? This has been an unusual situation for a decade or so. There's a lot of pressure right now on Yahoo's management and board."
A sale of the company is still "by far the most likely outcome," said Jan Dawson, chief analyst of Jackdaw Research.
And even though most signs point to a sale, he said it only makes sense for Mayer to keep running the company on a business-as-usual basis, "not least because an acquisition could take months to finalize."
Yahoo's stock barely budged in after-market close, trading at $36.33.