Answer:
Unlike traditional heating systems like furnaces or boilers that burn fuel, heat pumps don't actually PRODUCE heat - instead, they use a special type of refrigerant to move heat from the outside to the inside. You can think of it like an air conditioner in reverse:
With an air conditioner, the refrigerant moves from the compressor, where it is compressed into a hot liquid. The liquid releases its heat outside, aided by the fans on the compressor. Now cooled, it moves into the evaporator, where is absorbs heat around it and turns back into a gas. The evaporator coil gets extremely cold, and when air blows over it and into your house, the air is cooled.
A heat pump works the exact same way, but opposite - they pull heat from the outside air and blow it into your home. Heat pumps are effective even when it FEELS cold outside - in fact, many can pull heat from the air even when the temperature is lower than 30oF!