Our customers have told us that what is important for them is a true-to-life, security-first experience that can be easily integrated into established court workflows. The Pexip Virtual Courts application is purpose-built for courts to simplify, modernize, and enhance communications and proceedings in courtrooms, helping judiciaries to virtualize their court flows and improve them through automations. Customers can create tailored experiences including branding and integrations for scheduling, authentication and compliance. We believe that judiciaries around the world will be delighted to see this application come to market
With the video enablement of digital customer journeys, Pexip has entered the burgeoning Sales Enablement market, which has an estimated total addressable market potential of 1.5 billion US dollars, and we are already building a significant pipeline of opportunity in this area. Pexip Engage is one of the applications that we offer to customers within our Video Innovation pillar. We're seeing that organizations that have previously trusted us to provide secure video meetings are also now looking to explore the new revenue streams that digital video engagement can unlock.
Over the last two years, the way we work has been revolutionized. This has accelerated the adoption of video, which has allowed Pexip to grow from USD 47 million in ARR to USD 106 million in the same period. This acceleration has created huge opportunities for future growth. However, lack of visibility into how and when organizations will return to the office and delays in video hardware deliveries have impacted the short-term increase in infrastructure sales, while the use of video for mission critical, high security meetings and customized applications across industries has increased. This is the foundation of the more focused strategy we have been executing on since late 2021, pursuing market leading positions in video infrastructure, critical video meetings and video enablement, as presented on our Capital Markets Day in December 2021.
We see strong customer interest in the business areas we are targeting, and a substantial growth opportunity in a USD 5 billion market in 2024 that will support a significant increase in ARR in the next three years and beyond. However, we are disappointed with our performance in Q1 and we see that our current growth rate is below where it needs to be to reach our existing USD 300 million target by the end of 2024. While we are confident that we will return to ARR growth in Q2 2022 and beyond, we realize we have less visibility on the timing for USD 300 million compared to when the target was set in 2020. This is partly driven by the larger customer size within Critical Video Meetings and Video Enablement which require longer purchasing decisions.
As a consequence, we will adapt our growth plan and targets accordingly and initiate measures to accelerate our return to profitability. We target being EBITDA profitable in Q4 2022 and for the whole year of 2023, and will present an updated growth plan and target later this year. We maintain a very solid balance sheet, and the adapted growth plan with an earlier return to profitability will imply lower investments than previously anticipated
We continue to follow our communicated growth plan, and our profit this quarter is affected by the significant investments in sales resources, which will accelerate our growth in the years to come. Although the repercussions of the COVID 19 pandemic continue to affect the length of the sales cycle and ramp-up of sales staff, we are confident that our unique product offering combined with the build-up of our organization will bring us to our target of USD 300 million of ARR in 2024
Q3 is typically a strong quarter for Pexip in the public and federal sectors and this year was no exception. The Company saw continued interest from key public sector institutions looking for secure solutions for mission-critical communication requiring strict privacy and security. In addition, Pexip’s unique interoperability capabilities remains a key selling point for many large organizations. This, together with Pexip’s unique self-hosted deployment option, is winning the trust of complex organizations such as The Defense Information Systems Agency (DISA) in the United States. This success is something that we are replicating with other similar customers across the world
Odd Sverre Østlie has led the Company through a merger and significant growth, headed the highly successful IPO in 2020, and expanded an already great team with lots of new talent,” said Michel Sagen, Chair of the Board of Pexip, and continued, “The rapid growth of Pexip will fundamentally change the Company over the coming years. The Board and Odd Sverre are aligned with regards to Pexip’s strategy but have different views on the approach going forward. Thus, the Board and Odd Sverre have agreed that the timing is right for a new CEO. The Board would like to thank Odd Sverre for the great results and wish him the best of luck in future endeavors
It has been a privilege to lead Pexip over the past years. We have built an exceptional technology platform, earning us the trust of some of the world’s largest enterprise and government organizations. At the same time, we have built an excellent, global team with a culture that is unique in the industry, and I am confident that the team will continue to drive further success. In short, I remain extremely confident in Pexip's future and wish the team the best of luck
The Board is pleased that Øystein has accepted the interim CEO position. He has already demonstrated outstanding performance as CFO. Øystein and the management team have the drive and skills to propel the company forward – both along the outlined strategic trajectory and towards the ARR target of USD 300 million by the end of 2024
Organizations all over the world are preparing for post-pandemic hybrid working, and our salesforce and partners are working closely with customers to get ready for the new normal. Uncertainty around office openings resulted in somewhat delayed sales opportunities and bookings in Q2 2021 as customers postpone their purchase decisions. The underlying momentum in the market remains firm. We see significant demand and a strong sales pipeline for the second half of 2021. Our continued increase capacity within sales will also be a positive driver for growth in the quarters to come, together with a continuous launch of new product features. In Q2, we saw solid year-on-year growth, with especially strong sales to public sector organizations as well as first phase deals with some of the largest companies in the world within key verticals, including business to consumer (B2C) retail and business consultancy providers. These are examples of customer segments seeking high degree of robustness, service quality, security and ease of use, which are at the core of Pexip’s unique offering. All in all, we are progressing well on our growth strategy as communicated at the time of the IPO, including ramp-up of sales and technology staff and our work with strategic partners, and we are on track to reach our ARR target of USD 300 million by 2024
While organizations all over the world are preparing for hybrid working, delayed office openings have temporarily impacted customer purchasing of digital communication solutions between the office and home workers, resulting in delayed opportunities and thus Q2 sales bookings. However, our salesforce and partners are working intensely with customers to get ready for the new normal, and we see a significant pent-up demand and strong sales pipeline for the second half of 2021. Our increased capacity within sales will also be a positive driver for growth in the months to come
In Q2 I am particularly happy with the sales to new customers as well as work done on prospective new customers in the pipeline. We saw especially strong sales to public sector organizations as well as first phase deals with some of the largest companies in the world within key verticals, such as B2C retail- and business consultancy providers. We are progressing well on our growth strategy, including our work with strategic partners, and we are on track to reach our ARR target of USD 300 million by 2024
I am pleased with the performance of the team in Q1, delivering continued strong growth. As a large portion of renewals were signed in the previous quarter, it is good to note our strong ability to attract new customers this quarter. This clearly demonstrates the attractiveness of our solutions for enterprise and public sector customers with high requirements. While most businesses have still not returned to the office in the wake of the Covid-19 pandemic, the new normal of hybrid working is right around the corner. This will require flexible and secure videoconferencing of high quality, which we are particularly well positioned to deliver
I am happy to report a strong Q4 2020 with record high revenue and solid profitability, providing strong momentum into 2021. We are well on track to reach our target of ARR of USD 300 million by the end of 2024 as companies and public entities are preparing for the complex requirements of a post Covid-19 hybrid working environment, and where secure, efficient, and flawless video conferencing systems will play an essential role. This is at the core of Pexip’s offering, and our investments in increased sales capacity and R&D has resulted in a range of important new contracts during the quarter.
I am very excited about our newest launches such as Pexip Private Cloud and the Pexip Room cooperation with Logitech. We are also launching an important partnership for telehealth in collaboration with Epic, and more will come. 2021 will be an active year in terms of product enhancements.
In Q3, we delivered our best third quarter ever, with impressive net new sales, as more organizations are seeing the benefit of a best-in-class meeting experience and the need for a secure and interoperable video platform.
We added several major Fortune 500 and NATO defense organizations to our customer portfolio, reflecting the strength of our value proposition in the large enterprise and public sector segments.