Yahoo's board of directors also approved a 2-for-1 stock split, payable from 11 May. Yahoo hasn't split its stock since January 2000, during the height of the dot-com bubble.
The Internet bellwether said profit for the three months ended 31 March reached $101m (£54.8m), or 14 cents per diluted share, on $550m in revenue, excluding traffic acquisition costs (TAC). That's up from a profit of $46.7m, or 8 cents a share, and sales of $282.9m reported over the same period last year.
Wall Street analysts had expected the company to report a profit of 11 cents a share on $497.9m in revenue excluding TAC, according to consensus estimates from Thomson First Call.
Yahoo focuses on revenue without TAC because it considers that figure a more accurate reflection of its business. TAC is the amount of money Yahoo subsidiary Overture Services pays its distribution partners, such as Microsoft's MSN, to host its commercial search results. Overture charges advertisers a price every time someone clicks on the link, and then gives its distribution partners a cut of the revenue, represented as TAC.
Revenue including TAC reached $758m for the quarter.
Operating income before depreciation and amortisation -- formerly known as earnings before interest, taxes, depreciation and amortisation (EBITDA) -- reached $211m, compared with $85m for the same period last year. Cash flow jumped to $236m from $99m, while free cash flow surged to $197m from last year's $78m.
"Yahoo's performance surpassed even our high expectations, delivering the most successful quarter in the company's history," Yahoo chief executive Terry Semel said in a statement.
Here's how the company's three revenue areas fared. All revenue amounts are part of Yahoo's $758m this quarter, which includes TAC:
"Our general belief is there is increased acceptance of the medium overall by advertisers, and we think our results reflect an ability to gain share even against increased opportunities," Yahoo's chief operating officer Dan Rosensweig said in an interview. "The whole category is growing and we're growing faster than the category."
At the end of the quarter, Yahoo had $2.79bn in cash, cash equivalents and investments.
