To join three or more callers in the same conversation, a conference bridge is required. A conference bridge is a media resource that mixes multiple audio streams into a single stream, allowing multiple participants to communicate simultaneously.
A hardware-based conference bridge uses DSP (Digital Signal Processor) resources to mix audio streams. It is highly scalable and provides better performance compared to software-based solutions, making it ideal for handling multiple participants or high-quality calls.
Hardware conference bridges are typically required for real-time audio mixing in larger environments, as they offload the processing to dedicated DSPs on the gateway.
Reference: https://community.cisco.com/t5/collaboration-knowledge-base/basic-hardware-base- ios-media-resources-configuration-and/ta-p/3164231

The Advanced Ad Hoc Conference Enabled service parameter allows a Cisco UCM user to add additional participants directly to an existing point-to-point call, escalating it into an ad hoc conference, without needing to first place the original call on hold and start a new one. This capability applies to both audio and video calls when a conference bridge with sufficient capabilities is available.