An applicant tracking system (ATS) is the software a company uses to receive applications. It does two things with your file: it extracts the text and sorts it into fields (name, contact, jobs, education), and it lets a recruiter search and filter candidates by words.
Extraction fails on layout, not on content. A PDF made of images has no text to extract. Two columns and tables can scramble the line order. Letter-spaced headings can come out as “E X P E R I E N C E” and stop being recognised as headings. The templates in the builder avoid all three.
Search is by word. If the posting asks for “customer success” and your resume says “client support”, a literal search will not find you. That is why it pays to use the posting’s terms when they truly describe what you did.
There is no single score. Each company configures its own system, and in most cases a person reading the filtered list makes the decision. A tool that promises “87% match” is measuring its own criteria, not the employer’s.