、。
She doesn't seem to understand what he's saying.
Literal
She [topic-は], he [subject-が] what [object-を] is-saying [embedded question-のか] understand-can't [seems-ようだ].
An embedded question marked with ~のか — '(she doesn't understand) what he is saying.' Embedded questions allow a question to function as a constituent of a larger clause. 理解できない is the potential negative of 理解する ('understand'). ~ようだ provides the evidential 'seems,' based on observation.