Definition
Pot odds express the ratio of the amount you must call to the size of the total pot after your call. They tell you the minimum equity you need to make a call mathematically correct in the long run.
To calculate pot odds: divide the call amount by (pot + call). If you need to call $50 into a $150 pot (making the total pot $200 after your call), your pot odds are 50/200 = 25%. This means you need at least 25% equity for the call to be immediately profitable.
Pot odds are one of the most fundamental concepts in poker mathematics. When your equity exceeds your pot odds, you have a "direct call" — the play is immediately profitable regardless of future action. When equity is less than pot odds, folding is correct unless implied odds (expected future bets) close the gap.
Example
Your opponent bets $100 into a $200 pot. You need to call $100. Pot odds = 100/400 = 25%. If your hand has more than 25% equity, the call is mathematically correct.