First, we add together all the downloads since the last update. That gives us an idea of total installs running the latest version. Then we look up the percentage of installs that are running the current version.
Using these values, we can guess at the total number of active installs for all versions.
If there are new users who download the plugin but never install it, or else delete it after trying it, then that will cause some inaccuracy. For this reason, the most accurate results are when the plugin was updated in the last few days.
It's not perfect, but it's a good guess!