Kenexa (KNXA +14.8%) surges after its Q2 results and guidance indicate strong margin improvement. While Q3 revenue guidance of $90M-$93.7M is largely below a $93.7M consensus, EPS guidance of $0.29-$0.32 is mostly above a $0.29 consensus. A similar story holds for full-year guidance. The Street seems willing to overlook the fact deferred revenue fell slightly Q/Q to $96.4M. Rival Cornerstone OnDemand (CSOD +2.4%) is also higher.