A free resource you give in exchange for someone's email/contact info.
A lead magnet is how you convert traffic into leads. Someone lands on your page; you offer them something valuable for free (a guide, a template, a checklist, a tool); in exchange they give you their email. Now you can market to them over time via email. Without a lead magnet, most visitors leave and you never hear from them again.
Every visitor you don't capture is gone forever. Lead magnets are how you recover value from the 99% of visitors who aren't ready to buy today. Build a good one and your marketing gets compounding returns.