An ATS optimized resume is a resume that is designed to be screened by
applicant tracking system (ATS) software. This software is used by
companies to manage the entire hiring process including posting job
openings, receiving resumes, screening resumes to find the most
qualified candidates, and tracking job interviews.
It will give each resume a score based on how well the information on the resume matches the criteria for that job. A human will review the top scoring resumes. Normally, a human will never see the resumes that did not score well.
It is important to include on your resume relevant keywords that the ATS will search for, and to format your resume in a way that is predictable and easy for the ATS to understand.