Nadyy App works by analyzing the sound you record. Using signal processing, information can be extracted and matched against previously extracted information stored in a huge database. for more technical information (in Arabic) check this blog post

Nadyy provides as much information as possible about your inquiry, such as the reciter name, sura, and rwaya. The source of recitations that built our database is diverse. We would like to thank and attribute the following main sources: mp3quran.net, islamweb.net, tvquran.com, assabile.com