Operator: Thank you. The next question is from Mike Latimore of Northland Capital.
Mike Latimore – Analyst, Northland Capital
Just on the UBI topic, I guess if you see a rebound a little bit in the second half, is that going to come from the — do you expect it to come from the three main customers you have there? Or is that tied to a new customer or two ramping up?
Michael Burdiek: I think that the rebound would come from the existing programs. Although we see some dribbles of revenue coming into the mix through the balance of the year for some newer opportunities, probably coming through existing channels.
Mike Latimore – Analyst, Northland Capital
And I think you noted some additional apps you might bring to bear on the UBI market. I assume you are not counting on those for being much of a second half contributor though?
Michael Burdiek: No. It would be on the upside.
Mike Latimore – Analyst, Northland Capital
And then the PTC or railroad vertical contributing much in the quarter — what do you see in the second half for that?
Michael Burdiek: It did contribute in the second quarter. When we gave our guidance last quarter, we suggested it was going to be down materially quarter to quarter. It was down quite a bit, but probably a little bit better than we expected. So through the first two quarters of this year, we were almost $4 million total PTC related revenue. So almost to what we reached as revenue level for the full year, last year. We do have some additional backlog and we do have a pipeline of incremental opportunities. So I think we are pretty confident that we are going to do better this year than last.
Mike Latimore – Analyst, Northland Capital
And then on the domestic fleet management segment. Obviously, we had a horrible winter last winter, but do you think we will see seasonality in that segment – is that a normal pattern now, where winters are a little softer than other months?
Michael Burdiek: Hard to say. I mean, the first seasonal effect we saw in the fleet space was this past winter. So one data point does not suggest — obviously it’s hard to extrapolate from a single data point. But just to give you some numbers for reference. So this past quarter, Q2 was the second highest level of fleet product sales we have had in history.
Mike Latimore – Analyst, Northland Capital
And then just housekeeping. How many total employees do you guys have now?
Michael Burdiek: Approximately 500.
Operator: Thank you. The next question is from Rajesh Ghai of Macquarie.
Rajesh Ghai – Analyst, Macquarie
I wanted to ask a variation of the question that I had asked last time around gross margins in the Caterpillar business, given that it seems to be a question top of the mind of investors looking at the stock right now. How confident are you of keeping margins for Caterpillar at or above the current corporate average?
Michael Burdiek: I think our view is that early on as we mature our production processes and prime our supply chain, I think our outlook is that Caterpillar margins will be in line more or less with consolidated gross margin. But as things mature and we find efficiencies, I think it could be accretive to consolidated gross margin.
Rajesh Ghai – Analyst, Macquarie
And how long would that take? Could that happen this year? Or it could take a year or two?
Michael Burdiek: No. I don’t think it will take that long. I think a couple of quarters.
Rajesh Ghai – Analyst, Macquarie
Great, and as far as the international MRM business is concerned, you mentioned some strength in Latin America and South Africa. How sustainable is that strength going into the second half of the year? How good do you think is the visibility? And do you think that at least stays at the current levels through the rest of the year?
Michael Burdiek: Well, we used the word ‘sustainable’ in our prepared remarks and we think that the base of business we are building through the key accounts and customer wins in Brazil and South Africa is sustainable business.
But obviously, with any account, you can see variations quarter to quarter based on their sell-through and their demand. But we think we are building a great account base. We think we have got a great team and great channels in place to really see a sustained level of business and growing in some of these developing regions around the world.
Rajesh Ghai – Analyst, Macquarie
Great, and my last question is around the Caterpillar opportunity. You mentioned that it looks like a larger opportunity than what you had initially expected for fiscal 2016. What is driving that expansion? Is Caterpillar putting your devices in more equipment, or is it the retrofit opportunity of equipment that’s already in the field?
Michael Burdiek: Well, really both. Obviously we are receiving more formal forecast from Caterpillar. Obviously that’s been confidence building. And as it relates to the aftermarket opportunity, that appears to be a little bit larger than we originally expected and potentially happening earlier on in the engagement than we anticipated.
Operator: Thank you. The next question is from Greg Burns of Sidoti & Company.
Greg Burns – Analyst, Sidoti & Company
Just a question on the subscription portion of the business. You continue to add subscribers at a pretty decent clip, but the subscription revenues are roughly flat or maybe down slightly year-over-year. When do you start seeing the subscriber growth translate into more growth of subscription revenue?
Michael Burdiek: That’s a good question. As I mentioned earlier, the vast majority of the incremental subscriber growth that we saw quarter to quarter is in the vehicle finance area. That’s a very low ASP application, and in fact ASPs have declined in that market substantially over the last three or four years. And so that’s a bit of a headwind in terms of driving subscription growth.