FTP stands for "Functional Threshold Power", which sounds complicated, but really just means the highest effort you could sustain for a long period of time without burning out. Instead of leading you through an hour or longer workout to find this point, your instructor in an FTP class will instead guide you through a shorter class to perform a timed effort at a high, but sustainable effort. At the completion of this class, your FTP will be calculated by Stages Flight and update in your account (unless you have enabled FTP Lock under Settings > Heart Rate and Watt).
In order to calculate your FTP, Stages Flight will take the average power of your FTP test and subtract a percent. For a 20-minute test, for example, 95% of your average power is used for your new FTP. An accurate FTP will ensure that you are able to get the most out of your workouts with power by setting your zones correctly so that efforts are not too hard or too easy.
For more information about FTP, check with your instructor at your next Stages Flight class or submit a ticket here.