Strong search advertising sales helped revenues at the internet company grow for the first time in four years - by 2% year-on-year to $1.3bn (£830m).
Shares in the company rose following the results, despite an 8% fall in profit from a year earlier to $272m (£173m).
But chief executive Marissa Mayer, who took the helm in July, said the company still had a long way to go.
Looking ahead, the company expects revenues of between $4.5bn (£2.87bn) and $4.6bn (£2.93bn) this year - which would mean an annual growth rate of 0.7% to 3%.
Ms Mayer unveiled plans to focus on improving Yahoo! search.
"There is a big push we want to make on search - we have lost some share and want to regain that share," she said.
The company also outlined plans to overhaul many of its other online services to boost the amount of time users spend on its websites.
As a result, it warned investors to expect "an investment phase" in the first half of 2013, which would hit profit.
Ms Mayer said she was proud of Yahoo!'s results - the first full-quarter results she has overseen at the company.
"During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo! Mail and Flickr," she said.
"At the same time, we achieved tremendous internal transformation in the culture, energy and execution of the company."
These changes include the introduction of free smartphones and food by Ms Mayer.
She became Yahoo!'s third boss since September 2011 when she took the helm, following a rocky period at the company.
Former chief executive Scott Thompson resigned after less than six months following questions about his academic credentials, while co-founder Jerry Yang cut ties with the company.
Shares in Yahoo! have risen by around 30% since Ms Mayer took over, reaching their highest levels since 2008.
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