microsoft excel - Saving an .xls file to .xlsx reduces its file size by 500mb, is this caused by compression?

I have a .xls file with PivotTables that is 500mb large, and when I convert it to an .xlsx format, it drops to a mere 5mb. Even after clicking Data>Refresh All which refreshes the PivotCaches, the file size remains small. The same size reduction occurs if I save as .xlsm or .xlsb.

Microsoft's documentation states that XML format and ZIP container is much more memory efficient than binary documents. I have no reason to believe data loss or corruption occurred as functionality remains the same, is compression a plausible explanation for such a drastic (90%) reduction in file size? Is there a way to actually test that the file size reduction was caused by the compression?

Thank you.