How does freemium make money?

I'm curious, how exactly does the freemium business model generate revenue? It seems counterintuitive to offer a free version of a product or service, so I'm eager to understand the mechanisms at play. Do they rely solely on in-app purchases or subscriptions for the premium features? Are there other strategies employed, such as advertising or data monetization? And how do they ensure that their free offering is attractive enough to draw in users, while still incentivizing them to upgrade to the premium version?