(Adds analyst and Snap executive comments and recasts initial paragraphs)

By Paresh Dave and Munsif Vengattil

SAN FRANCISCO, Aug 7 (Reuters) - Snap Inc on Tuesday received a vote of confidence from a billionaire investor and reported record revenue from outside North America, factors that helped soften the blow of its first-ever drop in daily users.

The social media company said its shift towards a self-serve model for advertisers was paying off and blamed a redesign of its app for denting user numbers. Still, analysts expressed concern that advertisers and users prefer Facebook Inc's Instagram app over Snapchat.

Snap picked up a big backer in Saudi Arabia's Prince Alwaleed bin Talal, who announced soon after the second-quarter results he had bought a 2.3 percent stake for $250 million in May. He said in a statement Snap had just begun to "scratch the surface of its true potential."

Shares in Snap were flat in after-hours trading following volatility that saw them fall briefly before surging more than 12 percent.

The company has shifted over the last year to primarily selling ads through self-service, automated auctions rather than direct sales. That has come at the cost of the premium feel Snap had tried to ascribe to its ads, but given overall sales a jolt by attracting more advertisers.

Snap has been able to boost sales volumes by competing with bigger services on price. Prices fell 9 percent in the second quarter compared with the previous quarter and 52 percent from a year ago.

"It gives an incredible opportunity for advertisers to come and win on our platform," Chief Strategy Officer Imran Khan told analysts on a webcast on Tuesday.

With self-service ads, Snap has been able to grow revenue in regions such as Australia and the Middle East, where direct sales efforts are more limited and advertisers have few other options to market to its mainly 18-34-year-old users.

Snap also has been redesigning its app to encourage users to interact with more of its ad-supported videos.

Its global revenue was $262 million in the second quarter, beating the Thomson Reuters I/B/E/S estimate of $250.43 million, as average revenue per user surged to $1.40 from $1.05 a year ago.

Snap forecast third-quarter sales of $265 million to $290 million, up 27 percent to 39 percent from a year earlier, compared with 44 percent revenue growth in the second quarter.

Daily Snapchat users fell to 188 million in the second quarter from 191 million in the prior quarter. Snap had never before logged a quarterly drop in daily users, according to data it has released going back to 2014.