The image above illustrates a basic refrigeration cycle that is used in our heat pump water heaters. Based on the unit selected, the system in your heat pump may be more elaborate, but the basic principles apply.
Air is drawn through the evaporator coil where heat energy is captured and transferred to the refrigerant flowing through the evaporator. The refrigerant, now a gas, passes through the compressor and becomes a superheated hot gas. This superheated gas now enters the condenser where it transfers its heat energy, using a double wall heat exchanger, to the domestic hot water. The superheated gas condenses back to a liquid and the process repeats.
During this process, a circulator pump is continuously moving water from the storage tank, through the condenser, raising the temperature of the water. Temperature rise and water flow rates vary per configuration and conditions.