Yes, possible that they can recover files from the phone even if it is totally formatted. There is a tool called JTAG that mostly use for repairing phones and also use to recover files the process is a bit dangerous if you don't have knowledge of using JTAG it's direct to nand/memory IC and then can dump/recover your files instantly.

If you want to delete or erase them totally before you format your phone you need some apps called data eraser or shreddit to permanently delete files and then those files are irrecoverable. Now, you are safe to reformat your phone without worrying about sensitive files that you don't want to expose.