Unreal's Localization pipeline relies on several steps:

• Gather all the strings that need to be localized from assets all across your game project.
• Export them to .po files, which are text files where translations go. They are also exported to .locres files which are binary files containing the same data.
• Import any new data from the .po files which may have been translated and inserted into the files since the last run of the Localization process.
• Finally, Compile all the strings to binary format so that they are ready to be packaged and used by your game at runtime.