The program uses common formulas to roughly calculate your basic needs. It takes into account things like your body weight, height, age, gender, body fat percentage, your activity level (PAL), and a lot more.
A person's exact energy needs are super individual. That's why the algorithm gets better at calculating your actual energy requirement with every weight update, and adjusts your calories so you're always on track.
For this, you'll get a nutrition check-in if you drift off track, where your calorie needs are reassessed.