In Handy Backup, compression of data copies uses the most popular ZIP format, for achieving greater convenience and availability of compressed data.
The program can either compress all data into a single ZIP archive or create a separate ZIP file for each source file, depending on particular task settings. You can select freely between these variants, according to your needs.
If you will create a ZIP archive and then modify a single file inside a backup dataset, the program then will rewrite all archive file. This feature allows rolling to previous version of a compressed archive (i.e. Handy Backup will keep an old ZIP file intact until you renew all backup completely).
Please learn more about backup data files ZIP compression.