GoPro Inc.’s (Nasdaq: GPRO) sales were cut by 39 percent and it swung to a loss in the third quarter.

The action-camera company posted third-quarter 2016 sales of $240.6 million versus sales of $400.3 million during the same period a year ago. Third-quarter net income swung to a non-GAAP loss of $83.4 million, or -60 cents per diluted share, versus a profit of $36.6 million a year ago. Gross margins fell by more than 600 basis points.

GoPro Founder and CEO Nicholas Woodman said the company expects to return to profitability in 2017 as it works to build the digital side of its business.

“These are the best products we’ve ever made and consumer demand is strong,” he said. “GoPro is now a seamless storytelling experience and we’re very happy with customer reception so far. Looking forward to 2017, we expect to return to profitability, driven by the strength of our new products, double digit revenue growth and annual operating expenses of approximately $650 million.”

GoPro provided the following guidance:

  • Fourth Quarter 2016
    • Revenue of $625 million +/- $25 million
    • GAAP and non-GAAP gross margin of 40 percent +/- 1 percent
    • GAAP diluted earnings per share of 15 cents +/- 5 cents
    • Non-GAAP diluted earnings per share of 30 cents +/- 5 cents
    • GAAP and non-GAAP tax rate of 12 percent
    • Fully diluted share count of approximately 146 million
  • Full-year 2016
    • Revenue of between $1.25 billion and $1.3 billion
  • Full-year 2017
    • Double digit year-over-year revenue growth
    • GAAP operating expenses of approximately $735 million
    • Non-GAAP operating expenses of approximately $650 million
    • GAAP net loss
    • Non-GAAP net income profitable
    • GAAP and non-GAAP tax rate of approximately 15 percent
    • Fully diluted share count of approximately 152 million