Yahoo Q1 misses across the board, stock slips 2 percent

The search company reported a net income of $21 million -- down from $312 million during the same quarter last year.

Yahoo reported its first quarter earnings report for 2015 after the bell on Tuesday.

The Sunnyvale, Calif.-based search company reported a net income of $21 million -- down from $312 million during the same quarter last year -- at 2 cents per share (statement).

Non-GAAP earnings were 15 cents per share on a revenue of $1.04 billion, excluding traffic acquisition costs (ex-TAC).

Wall Street was looking for earnings of 18 cents per share on a revenue of $1.055 billion.

As a result of lackluster report, Yahoo shares fell by around 2 percent in after-hours trading.

Yahoo CEO Marissa Mayer reiterated the company's ongoing transformation efforts in prepared remarks:

"Yahoo is amidst a multi-year transformation to return an iconic company to greatness. For the next phase of the transformation, we will focus on accelerating our GAAP revenue growth while managing our margins and costs."

Mayer also said mobile GAAP revenue reached $234 million in Q1, a rise of 61 percent year-over-year. However, revenue from display ads are down 7 percent for the quarter -- a tough pill to swallow considering this is an area Mayer singled out for projected growth.

Yahoo has been under pressure from investors to find an engine for growth within the aging search portal. The breadcrumb trail clearly suggests that Yahoo trying to rebuild itself into the search giant it once was, and in some areas that goal is taking shape. Yahoo's revenue from search was up 20 percent year-over-year.

The company recently revised a six-year old agreement with Microsoft, enabling Yahoo to monetize a much larger portion of its search traffic on platforms other than Bing. Months prior, Yahoo inked a deal with Mozilla to replace Google as Firefox's default browser.

What is still unclear is exactly how and in what form Yahoo will emerge down the road, after all the Alibaba pieces officially fall away.

Yahoo will provide second quarter guidance during the live webcast of its quarterly conference call with shareholders at 2PM PT/5PM ET.