This sensor module uses a reflective infrared sensor. The infrared light is emitted and reflected back to the receiver, it's then inverted by 74LS14 and output to the output pin and the LED. The output signal is a digital signal.
There are 3 active pins: output signal, power supply and ground.
On a white surface, the output signal will be HIGH. On a black/non-reflective surface, the output signal will be low and the LED is off. The working distance from the sensor to the surface is around 1.5cm.