Knockout Text is a feature that is available when you turn on Text Backgrounds. It makes the text transparent while leaving the text background on show. Use it to make your designs pack a punch!
In the example below, the text layer for "SALE" has a pink text background that has Knockout Text turned on. The text is transparent, revealing the layer below, which in this case is a floral pattern.
You can turn Knockout Text on and off in the Text Background settings. For instructions, see Add a text background.