A PSD is a project, not a picture
PSD is Photoshop’s working format: layers, masks, adjustments, history. Without Photoshop (or a monthly subscription to it), opening one is surprisingly hard, even though what you usually want is just the finished image.
Image Squisher reads the finished picture inside the PSD, the flattened image you’d get if you hit Save As in Photoshop, and exports it as a JPG. Your layers and edits stay safe in the untouched original.