How it works
Many cameras record proprietary RAW files that editing software should not overwrite. Instead, applications such as Lightroom and Camera Raw save the edits and added metadata to a separate XMP file that sits next to the RAW — hence “sidecar”. The original sensor data stays untouched.
The sidecar carries the recipe: exposure, white balance, crops, tone curves and so on, plus image metadata like captions, keywords and credits. Open the RAW again and the software reads the XMP to reconstruct your work, which keeps editing entirely non-destructive.
This matters in a stills workflow because it lets a photographer hand off RAWs with their adjustments and captions intact, while a recipient can still return to the untouched original. It also keeps the marked-up frames destined to become key selects, and their settings, travelling together.
One practical note: the XMP must stay alongside its RAW and share the same base filename, or the link breaks. For the full detail, read everything you need to know about XMP files.