It's a polite way to ask someone how they are doing, similar to "How are you?" in English. It's used when addressing someone you don't know well or someone older than you.
Here are some other ways to say "How are you?" in Spanish:
* ¿Cómo estás? (informal, singular)
* ¿Cómo estáis? (informal, plural)
* ¿Cómo está? (formal, singular)
* ¿Cómo están? (formal, plural)