A more thorough explanation:

A preferential vote is a type of vote where the voter ranks the choices in order of preference. This type of vote can be transferable or weighted. In transferable voting, a candidate wins if their first-choice votes reach the number needed to win, or the "threshold." If no candidate reaches the threshold, the least-preferred candidate is dropped and their votes transfer to the next-preferred candidate on each ballot. This process continues until enough candidates reach the threshold or the number of surviving candidates equals the number of representatives still to be elected.

For example, in an election for student council president, a voter may rank the candidates in order of preference: 1) John, 2) Sarah, 3) Michael. If John receives the most first-choice votes but not enough to reach the threshold, then Michael, the least-preferred candidate, is dropped and his votes transfer to the next-preferred candidate on each ballot. If Sarah receives enough transferred votes to reach the threshold, she wins the election.